Quote
Campaign contributions from Goldman Sachs employees to President Obama are nearly seven times as much as President Bush received from Enron workers, according to numbers on OpenSecrets.org.
President Bush's connections to Enron were well-hyped during the company's accounting debacle that rippled through the economy. Time magazine even had an article called, "Bush's Enron Problem." The Associated Press ran with the headline, "Bush-backing Enron makes big money off crisis." David Callaway wrote that Enron for Bush was worse than Whitewater for Clinton.
...
Quote
Goldman Sachs, one of Wall Street’s most prestigious investment banks, was also among the many banks in 2008 and 2009 to receive billions of dollars in taxpayer money to help it stay afloat. Like others in the securities industry, Goldman Sachs advises and invests in nearly every industry affected by federal legislation. The firm closely monitors issues including economic policy, trade and nearly all legislation that governs the financial sector. It has been a major proponent of privatizing Social Security as well as legislation that would essentially deregulate the investment banking/securities industry. The firm tends to give most of its money to Democrats. A number of high-ranking government officials in recent years have spent part of their careers at Goldman Sachs.
Quote
Goldman Sachs has reached into the ranks of the Obama White House alumni for some political protection. Former White House counsel Greg Craig has been hired to advise the Wall Street giant after it was charged by the government last Friday with fraud and misleading its own investors. Politico first broke the story Monday night.
Officials at the White House say Craig did not alert them about his decision to take on Goldman Sachs as a client at the law firm Skadden Arps, where Craig now works.
Federal ethics rules prohibit lobbying, but Craig may have avoided complications. An administration official explains, "a former White House employee cannot appear before any unit of the Executive Office of the President on behalf of any client for 2 years -- one year under federal law and another year under the pledge pursuant to the January 2009 ethics executive order” signed by President Obama. But the Securities and Exchange Commission, which filed the civil lawsuit against Goldman Sachs, is an independent agency and West Wing advisors believe Craig’s work would not run afoul of the rules IF Craig does not contact the White House.
...
Quote
...
Another Goldman veteran, Edward C. Forst, served briefly as an adviser to Mr. Paulson on setting up the bailout fund but has since left to return to his post as executive vice president of Harvard.
...
Quote
...
Mr. Geithner, 47, played a pivotal role in the decision to let Lehman die and to bail out A.I.G. A 20-year public servant, he has never worked in the financial sector. Some analysts say that has left him reliant on Wall Street chiefs to guide his thinking and that Goldman alumni have figured prominently in his ascent.
After working at the New York consulting firm Kissinger Associates, Mr. Geithner landed at the Treasury Department in 1988, eventually catching the eye of Robert E. Rubin, Goldman’s former co-chairman. Mr. Rubin, who became Treasury secretary in 1995, kept Mr. Geithner at his side through several international meltdowns, including the Russian credit crisis in the late 1990s.
Mr. Rubin, now senior counselor at Citigroup, declined to comment. (another large Obama contributor)
...
Quote
WASHINGTON— The Obama administration’s new plan to bail out the nation’s banks was fashioned after a spirited internal debate that pitted the Treasury secretary, Timothy F. Geithner, against some of the president’s top political hands.
In the end, Mr. Geithner largely prevailed in opposing tougher conditions on financial institutions that were sought by presidential aides, including David Axelrod, a senior adviser to the president, according to administration and Congressional officials.
Mr. Geithner, who will announce the broad outlines of the plan on Tuesday, successfully fought against more severe limits on executive pay for companies receiving government aid.
He resisted those who wanted to dictate how banks would spend their rescue money. And he prevailed over top administration aides who wanted to replace bank executives and wipe out shareholders at institutions receiving aid.
Because of the internal debate, some of the most contentious issues remain unresolved.
...
Quote
...
Enron's stock price, which hit a high of US$90 per share in mid-2000, caused shareholders to lose nearly $11 billion when it plummeted to less than $1 by the end of November 2001. The U.S. Securities and Exchange Commission (SEC) began an investigation, and Dynegy offered to purchase the company at a fire sale price. When the deal fell through, Enron filed for bankruptcy on December 2, 2001 under Chapter 11 of the United States Bankruptcy Code, and with assets of $63.4 billion, it was the largest corporate bankruptcy in U.S. history until WorldCom's 2002 bankruptcy
...
Quote
...
Investors in the CDO lost over $1 billion. Paulson bet against the CDO and made a profit of $1 billion, the SEC says.
...
Quote
...
Involvement with the bailout of AIG
American International Group was bailed out by the US government in September 2008 after suffering a liquidity crisis, whereby the Federal Reserve initially lent $85 billion USD to AIG to allow the firm to meet its collateral and cash obligations.
In March 2009, it was reported that, in 2008, Goldman Sachs, alongside other major US and international financial institutions, had received billions of dollars during the unwind of credit default swap (CDS) contracts purchased from AIG, including $12.9bn from funds provided by the US Federal Reserve to bail out AIG.[80][81][82] (As of April, 2009, US Government loans to AIG totaled over $180 billion.) The money was used to repay customers of its securiy-lending program and was paid as collateral to counterparties under credit insurance contracts purchased from AIG. However, due to the size and nature of the payouts there was considerable controversy in the media and amongst some politicians as to whether banks, including Goldman Sachs, may have benefited materially from the bailout and if they had been overpaid.[83],[84] The New York State Attorney General Andrew Cuomo announced in March 2009 that he was investigating whether AIG's trading counterparties improperly received government money.[85]
...