Most Senators Who Questioned Goldman Sachs Also Took Money From Its PAC and Employees

May 5, 2010 - 9:17 AM
Most of the 10 members of the Senate committee who grilled top-ranking employees of Goldman Sachs last month have taken campaign contributions from either the bank's political action committee (PAC) or its employees.

Sen. Carl Levin (D-Mich.)

(CNSNews.com) – Most of the 10 members of the Senate committee who grilled top-ranking employees of Goldman Sachs last month have accepted campaign contributions from either the bank’s political action committee (PAC) or its employees.
 
Goldman executives – including CEO Lloyd Blankfein – were called before the Senate Homeland Security and Government Affairs Committee’s Permanent Investigations Subcommittee on April 27 to answer questions about the bank’s conduct during the run-up to the 2008 housing crisis.
 
However, according to Federal Elections Committee information collected by OpenSecrets.org, all but one of the subcommittee’s 10 members have taken thousands of dollars in campaign contributions from Goldman’s official political arm or from individual employees.
 
One senator, Ted Kaufman (D-Del.) was appointed to replace now-Vice President Joe Biden and is not running for reelection – and thus is not in need of campaign funds. The remaining nine members of the subcommittee have accepted contributions from Goldman Sachs's PAC or its employees.
 
While the contributions received by members of the subcommittee pale in comparison to the more than $1 million the company and its employees gave to President Obama’s 2008 campaign, they are not insignificant amounts.
 
Senator John McCain, a presidential candidate in 2000 and 2008, has received $337,065.00 from Goldman's PAC and Goldman employees since 1998. Most of that money ($329,610) came from individual Goldman employees during McCain’s two presidential runs. The other $7, 455 came from Goldman Sachs PAC.
 
In 2008, Goldman's PAC and its employees gave $230,095 to McCain’s presidential campaign.
 
The next highest recipient of campaign donations from Goldman Sachs is Sen. Susan Collins (R-Maine) who has accepted $33,650 -- $18,500 from Goldman Sachs PAC and $15,150 from Goldman employees.
 
During the hearing, Collins said that Goldman’s trading and investment activity was “unseemly,” and she said the time had come for Congress to pass tougher regulations.
 
“There is something unseemly about Goldman betting against the housing market at the same time it was selling mortgage-backed securities,” Collins said at the April 27 hearing. “Clearly, this system must be reformed so that Wall Street banks are not seen and do not act as unscrupulous operators who seek to profit from the public's misfortune even as they're pitching toxic investments and even as hard-working struggling taxpayers are left to pick up the tab.”
 
Collins was referring to two different activities Goldman engaged in. The first, known as market-making, involves investment deals structured by Goldman Sachs at the request of a client – usually a professional or institutional investor. In such a transaction, Goldman structures the deal and then offers it to the client, who may either invest in it directly – called a long position – or buy an insurance policy against it – known as going short. Goldman often takes the opposite position of its client.
 
The other activity, known as proprietary trading, is when Goldman uses its own money to invest directly in financial markets – making money directly from these investments instead of from the fees collected through market making. The ethics of doing both market-making and proprietary trading at the same time – and on the same investment products – was a recurring theme of the April hearing.
 
The Democrat who has collected the most money from Goldman's PAC and its employees is Sen. Tom Carper (D-Del.) who has taken $23,500 since being elected in 2001 -- $13,500 from Goldman Sachs PAC and $10,000 from Goldman employees.
 
Another major recipient of contributionsis Sen. Mark Pryor (D-Ark.) who has accepted $21,100 since being first elected in 2003 -- $10,000 from Goldman Sachs PAC and $11,000 from Goldman employees.
 
The remaining sub-committee members have all taken less than $20,000 from Goldman's PAC or its employees over their careers, according to OpenSecrets.org. Sen. Claire McCaskill (D-Mo.) has received the most out of this group -- $15,750, all from Goldman employees.
 
McCaskill compared Goldman’s business to “raw gambling” and compared Goldman’s complex financial deals to sports book-making.
 
“It's gambling: pure and simple, raw gambling,” she said. “You are the bookie, you are the house. You have less oversight and less regulation as you all began this wild, wild west of tranches, waterfalls, equity tranches, residentials, warehousing, as you began all that, you have less oversight than a pit boss in Las Vegas.”
 
Democratic Sen. John Tester (D-Mont.) also cracked the $10,000 ceiling, raking in $10,800 from Goldman employees since being elected in 2006.
 
Republican Sen. John Ensign (R-Nev.), who disputed McCaskill’s Las Vegas analogy, has received $8,250 from Goldman and its employees since 2000. Ensign said that in Las Vegas, every gambler knows that the odds are stacked against them. Ensign said that on Wall Street, investors don’t always know what is going to happen.
 
The subcommittee’s two most senior members, Sens. Carl Levin (D-Mich.) and Tom Coburn (R-Okla.) are the recipients of the least amount of money from Goldman Sachs. Coburn has received only $5,500 from Goldman employees and none from Goldman Sachs PAC.
 
Levin, perhaps the bank’s harshest critic, received only $7,500 – all from Goldman employees. Levin accused Goldman of manipulating its clients for its own profit, actions which contributed to the collapse of the overall financial system.
 
“Goldman's actions demonstrate that it often saw its clients not as valuable customers, but as objects for its own profit. This matters because instead of doing well when its clients did well, Goldman Sachs did well when its clients lost money. Its conduct brings into question the whole function of Wall Street, which traditionally has been seen as an engine of growth, betting on America's successes and not its failures.”