The Goldman Sachs Group, Inc. is an American multinational investment banking firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients.
Lloyd Craig Blankfein (born September 15, 1954) is an American business executive. He is the CEO and Chairman of Goldman Sachs. He assumed this position upon the May 2006 nomination of former CEO Henry Paulson to United States Secretary of the Treasury.
The top five donors to George W. Bush in the election cycle of 2004:
1. Morgan Stanley – $604,280 / 2. Merrill Lynch – $558,804 / 3. PricewaterhouseCoopers – $508,500 / 4. UBS AG – $442,325 / 5. Goldman Sachs – $396,350
The top five donors to Barack Obama in the election cycle of 2008:
1. University of California – $1,799,460 / 2. Goldman Sachs – $1,034,615 / 3. Harvard University – $696,456 / 4. Microsoft Corp – $854,717 / 5. JPMorgan Chase & Co – $847,895
The top five donors to Barack Obama in the election cycle of 2012:
1. University of California – $1,350,139 / 2. Microsoft Corp – $815,645 / 3. Google Inc – $804,249 / 4. US Government – $736,722 / 5. Harvard University – $680,918
The top five donors to Mitt Romney in the election cycle of 2012:
1. Goldman Sachs – $1,045,454 / 2. Bank of America – $1,017,652 / 3. Morgan Stanley – $920,805 / 4. JPMorgan Chase & Co – $835,596 / 5. Wells Fargo – $693,576
Four out of the top five donors to Hilliary Clinton from 1999-2016: 1. Citigroup Inc – $824,402 / 2. Goldman Sachs – $760,740 / 4. JPMorgan Chase & Co – $696,456 / 5. Morgan Stanley – $636,564
Goldman Sachs partner Gary Gensler is Obama’s Commodity Futures Trading Commission head.
Goldman Sachs kept White House Chief of Staff Rahm Emanuel on a $3,000 monthly retainer while he worked as Clinton’s chief fundraiser
Former Goldman Sachs lobbyist Mark Patterson serves under Geithner as his top deputy and overseer of TARP bailout — $10 billion of which went to Goldman Sachs.
Obama’s close hometown crony, campaign-finance chief and senior adviser Penny Pritzker, was head of Superior Bank of Chicago, a subprime specialist that went bust in 2001, leaving more than 1,400 people stripped of their savings after bank officials falsified profit reports. Pritzker’s lawyer at O’Melveny and Myers, Tom Donilon, is now Obama’s deputy national-security adviser. He earned just shy of $4 million representing her and other high-profile meltdown clients including Goldman Sachs.
White House National Economic Council head Larry Summers reaped nearly $2.8 million in speaking fees from many of the major financial institutions and government-bailout recipients he now polices, including JP Morgan Chase, Citigroup, Lehman Brothers, and Goldman Sachs. A single speech to Goldman Sachs in April 2008 brought in $135,000. Summers had prior experience negotiating government-sponsored bailouts that benefit private concerns. In 1995, he spearheaded a $40 billion bailout of the Mexican peso that bypassed Congress. Summers personally leaned on the International Monetary Fund to provide nearly $18 billion for the package. Summers’s boss, then–secretary of the Treasury Robert Rubin, was former co-chairman of Wall Street giant Goldman Sachs — the Mexican government’s investment banking firm of choice.
Obama administration hired about 70 previously registered corporate, trade association and for-hire lobbyists.
In total, Bill and Hilliary Clinton gave 729 speeches from February 2001 until May, receiving an average payday of $210,795 for each address. The two also reported at least $7.7 million for at least 39 speeches to big banks, including Goldman Sachs and UBS, with Hillary Clinton, the Democratic 2016 front-runner, collecting at least $1.8 million for at least eight speeches to big banks.
And she’s been complaining about corrupting “big money” in politics, while firms representing very special interests made her a multimillionaire. “I’m out here every day saying I’m going to shut them down, I’m going after them,” she said to the CNN audience. “I’m going to jail them if they should be jailed. I’m going to break them up.”
Clinton’s relationship with Goldman Sachs is not unique. Bill and Hillary Clinton have always nurtured cozy ties with Wall Street—in terms of policies and funds-chasing (for their campaigns and the foundation). The chief economic guru of the Clinton administration was Robert Rubin, a former Goldman Sachs chairman, and the financial deregulation and free-trade pacts of the Clinton years have long ticked off their party’s populists. In his new book, former Treasury Secretary Timothy Geithner recalls visiting Bill Clinton at his Harlem office and asking his advice, as Geithner puts it, on “how to navigate the populist waters” and respond to the American public’s anger about bailouts and Wall Street. The former president didn’t seem to have much sympathy for these popular sentiments and replied by referring to the CEO of Goldman: “You could take Lloyd Blankfein into a dark alley and slit his throat, and it would satisfy them for about two days. Then the bloodlust would rise again.”
Former Goldman executives who moved on to government positions include:
Robert Rubin and Henry Paulson who served as United States Secretary of the Treasury under Presidents Bill Clinton and George W. Bush, respectively; Mario Draghi, President of the European Central Bank; Mark Carney, Governor of the Bank of Canada 2008–13 and Governor of the Bank of England from July 2013 and Malcolm Turnbull, Prime Minister of Australia.
- Former Treasury Secretary Paulson was the former CEO of Goldman Sachs.
- Former Goldman Sachs lobbyist Mark Patterson was chief of staff to Treasury Secretary Timothy Geithner
- Goldman Sachs was the company from which Barack Obama raised the most money in 2008
- Goldman Sachs was the company from which Hilliary Clinton raised the most money in 2008
- Goldman Sachs CEO Lloyd Blankfein has visited the Obama White House 10 times
- Stephen Friedman, a former director of Goldman Sachs, was named Chairman of the Federal Reserve Bank of New York in January 2008
- Timothy Geithner, then president of the New York Fed, would leave his role there to become Treasury Secretary
Goldman Sachs received preferential treatment from the government by being the only Wall Street firm to have participated in the crucial September meetings at the New York Fed, which decided AIG’s fate. CEO of Goldman Sachs, was “one of the Wall Street chief executives at the meeting.” According to the New York Times, Paulson spoke with the CEO of Goldman Sachs two dozen times during the week of the bailout,
According to a report by the United States Office of the Inspector General of TARP, if AIG had collapsed, it would have made it difficult for Goldman to liquidate its trading positions with AIG, even at discounts, and it also would have put pressure on other counterparties that “might have made it difficult for Goldman Sachs to collect on the credit protection it had purchased against an AIG default.” Finally, the report said, an AIG default would have forced Goldman Sachs to bear the risk of declines in the value of billions of dollars in collateral debt obligations.
During the 2007 subprime mortgage crisis, Goldman was able to profit from the collapse in subprime mortgage bonds in the summer of 2007 by short-selling subprime mortgage-backed securities. Members of Goldman’s structured products group in New York, made a profit of $4 billion by “betting” on a collapse in the sub-prime market, and shorting mortgage-related securities.
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 $12.9 billion from funds provided by the US Federal Reserve to bail out AIG. As of April, 2009, US Government loans to AIG totaled over $180 billion). The money was used to repay customers of its security-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.
It has also been harshly criticized, particularly in the aftermath of the 2007–2012 global financial crisis where some alleged that it misled its investors and profited from the collapse of the mortgage market.
Goldman was investigated by the Congress, the Justice Department, and a lawsuit from the SEC—to whom it agreed to pay $550 million to settle.
Visibility and antagonism came from the $12.9 billion Goldman received—more than any other firm—from AIG counterparty payments provided by the New York Federal Reserve bailout; the $10 billion in TARP money it received from the government (though the firm paid this back to the government); and a record $11.4 billion set aside for employee bonuses in the first half of 2009.
While all the investment banks were scolded by congressional investigations, the company was subject to “a solo hearing in front of the Senate Permanent Subcommitee on Investigations” and a quite critical report.
By summer 2007, they persuaded colleagues to see their point of view and convinced skeptical risk management executives. The firm initially avoided large subprime writedowns, and achieved a net profit due to significant losses on non-prime securitized loans being offset by gains on short mortgage positions. The firm’s viability was later called into question as the crisis intensified in September 2008.
On October 15, 2007, as the crisis had begun to unravel, Allan Sloan, a senior editor for Fortune magazine, said:
So let’s reduce this macro story to human scale. Meet GSAMP Trust 2006-S3, a $494 million drop in the junk-mortgage bucket, part of the more than half-a-trillion dollars of mortgage-backed securities issued last year. We found this issue by asking mortgage mavens to pick the worst deal they knew of that had been floated by a top-tier firm – and this one’s pretty bad.
It was sold by Goldman Sachs – GSAMP originally stood for Goldman Sachs Alternative Mortgage Products but now has become a name itself, like AT&T and 3M.
This issue, which is backed by ultra-risky second-mortgage loans, contains all the elements that facilitated the housing bubble and bust. It’s got speculators searching for quick gains in hot housing markets; it’s got loans that seem to have been made with little or no serious analysis by lenders; and finally, it’s got Wall Street, which churned out mortgage “product” because buyers wanted it. As they say on the Street, “When the ducks quack, feed them.”
On September 23, 2008, Berkshire Hathaway agreed to purchase $5 billion in Goldman’s preferred stock, and also received warrants to buy another $5 billion in Goldman’s common stock, exercisable for a five-year term. Goldman also received a $10 billion preferred stock investment from the U.S. Treasury in October 2008, as part of the Troubled Asset Relief Program (TARP).
Goldman paid 953 employees bonuses of at least $1 million each after it received TARP funds in 2008.
In June 2009, Goldman Sachs repaid the U.S. Treasury’s TARP investment, with 23% interest (in the form of $318 million in preferred dividend payments and $1.418 billion in warrant redemptions). On March 18, 2011, Goldman Sachs acquired Federal Reserve approval to buy back Berkshire’s preferred stock in Goldman. In December 2009, Goldman announced their top 30 executives will be paid year-end bonuses in restricted stock, with clawback provisions, that must go unsold for five years.
During the 2008 Financial Crisis, the Federal Reserve introduced a number of short-term credit and liquidity facilities to help stabilize markets. Some of the transactions under these facilities provided liquidity to institutions whose disorderly failure could have severely stressed an already fragile financial system.
Goldman Sachs was one of the heaviest users of these loan facilities, taking out numerous loans from March 18, 2008 – April 22, 2009. The Primary Dealer Credit Facility (PDCF), the first Fed facility ever to provide overnight loans to investment banks, loaned Goldman Sachs a total of $589 billion against collateral such as corporate market instruments and mortgage-backed securities. The Term Securities Lending Facility (TSLF), which allows primary dealers to borrow liquid Treasury securities for one month in exchange for less liquid collateral, loaned Goldman Sachs a total of $193 billion.
Goldman Sachs’s borrowings totaled $782 billion in hundreds of transactions over these months. This number is a total of all transactions over time and not the outstanding loan balance. The loans have been fully repaid in accordance with the terms of the facilities.
Goldman Sachs, the New York investment banking firm were among the top donors to Clinton’s 2008 presidential campaign.
Marc Mezvinsky (born December 15, 1977) is an investment banker, co-founder of hedgefund Eaglevale Partners, and the husband of Chelsea Clinton.
Mezvinsky was formerly an investment banker at Goldman Sachs. Mezvinsky is the son of former members of Congress Marjorie Margolies-Mezvinsky (D-PA) and Edward Mezvinsky (D-IA), and was raised in the Conservative Jewish tradition.
Ed Mezvinsky, is a disgraced former politician convicted of 31 counts of fraud.