Goldman Sachs has made a lot of bets that paid off handsomely over the years -- for example, its bet against the subprime housing market that gained the Wall Street giant $4 billion as the housing bubble imploded in 2007. One of the firm's biggest bets has been on Barack Obama, and that bet seems to be paying off too.
The "vampire squid" raised more money for Obama's 2008 presidential campaign than any other bank or Wall Street firm, over $1 million from Goldman employees, officers, etc. If the goal was to gain access to the White House, the plan seems to have been wildly successful. As McClatchy Newspapers noted in 2010:
Several former Goldman executives hold senior positions in the Obama administration, including Gary Gensler, the chairman of the Commodity Futures Trading Commission; Mark Patterson, a former Goldman lobbyist who is chief of staff to Treasury Secretary Timothy Geithner; and Robert Hormats, the undersecretary of state for economic, energy and agricultural affairs.
Lawrence Summers, an Obama economic advisor during the early days of his administration, was reportedly paid $135,000 by Goldman Sachs for a one-day visit in 2008. And in the spirit of the revolving door I've complained about before, the same McClatchy article noted that "Goldman is retaining former Obama White House counsel Gregory Craig as a member of its legal team."
Of course, Goldman had powerful connections before, including Bush administration Secretary of the Treasury Henry Paulson, a former Goldman CEO. Maybe it's just coincidence that the firm got a great deal during the TARP bailout, receiving some $23 billion in direct or indirect federal aid, according to McClatchy, along with actions that helped Goldman (like the bailout of AIG) and hurt rivals (such as Paulson's refusal to rescue Lehman Brothers). But it sure looks like it helps to know the right people, and to have helped them get into office.
And now, in a story that got pretty much lost amid all the other breaking news in late August, Goldman honcho Lloyd Blankfein just hired a new lawyer to help him through the ongoing Department of Justice investigations of possible wrongdoing. According to the New York Times , that lawyer, Reid Weingarten, was once a Justice Department employee, where he worked "with another young prosecutor, Eric H. Holder. Mr. Holder, now the attorney general of the United States, remains one of Mr. Weingarten's closest friends."
Oh, and it was recently revealed that the Securities and Exchange Commission has been shredding documents related to past investigations, making it vastly harder for present or future investigators to connect the dots between past and present misconduct.
Maybe this is all just coincidence, but it sure looks like Goldman's bet on Obama is paying off.