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WASHINGTON — While Goldman Sachs' lawyers negotiated with the Securities and
Exchange Commission over potentially explosive civil fraud charges, Goldman's chief
executive visited the White House at least four times.
White House logs show that Chief Executive Lloyd Blankfein traveled to Washington
for at least two events with President Barack Obama, whose 2008 presidential
campaign received $994,795 in donations from Goldman's political action committee,
its employees and their relatives. He also met twice with Obama's top economic
adviser, Larry Summers.
No evidence has surfaced to suggest that Blankfein or any other Goldman executive
raised the SEC case with the president or his aides. SEC Chairwoman Mary Schapiro
said in a statement Wednesday that the SEC doesn't coordinate enforcement actions
with the White House or other political bodies.
Goldman's connections to the White House and the Obama administration are raising
eyebrows at a time when Washington and Wall Street are dueling over how to
overhaul regulation of the financial world.
"There's now kind of a magnifying glass on the administration for any sign of
interference or conversations with the regulators and the judiciary," Jacobs said.
The SEC investigation of Goldman's dealings lasted 18 months and culminated with
the SEC filing civil fraud charges against the investment bank last week.
According to White House visitor logs, Blankfein was among the business leaders who
attended an Obama speech on Feb. 13, 2009, and he also joined more than a dozen
bank CEOs in a meeting with Obama on March 27, 2009.
Blankfein also was supposed be among the CEOs who met with Obama in December,
but he and two others phoned in from New York, blaming inclement weather.
He and his wife, Laura, were listed on the logs among 438 presidential guests at the
Kennedy Center Honors the previous week.
The logs also indicate that Blankfein met twice in 2009, on Feb. 4 and Sept. 30, with
Summers, who was undersecretary of the Treasury Department during the Clinton
administration when it was headed by Robert Rubin, a former Goldman CEO.
Asked whether Goldman executives had talked to administration officials about the
SEC inquiry, Goldman spokesman Michael DuVally said that the firm doesn't discuss
"what conversations we may or may not have had with government officials."
"We do not coordinate our enforcement actions with the White House, Congress or
political committees," Schapiro said. "We do not time our cases around political
events or the legislative calendar . . . We will neither bring cases, nor refrain from
bringing them, because of the political consequences."
While describing Craig, his former counsel, as "one of the top lawyers in the country,"
Obama also said that he'd imposed "the toughest ethics rules that any president's
ever had."
"One thing he (Craig) knows is that he cannot talk to the White House," Obama said.
"He cannot lobby the White House. He cannot in any way use his former position to
have any influence on us."
Goldman's chief spokesman, Lucas van Praag, said the firm "wanted Craig . . . for his
wisdom and insight."
Craig, now an attorney with the Washington law firm of Skadden, Arps, Slate, Meagre
& Flom, said: "I am a lawyer, not a lobbyist. Goldman Sachs has hired me to provide
legal advice and to assist in its legal representation."
"The vast majority of the money I got was from small donors all across the country,"
Obama told CNBC. "Moreover, anybody who gave me money during the course of
my campaign knew that I was on record in 2007 and 2008 pushing very strongly
that we needed to reform how Wall Street did business."
One White House insider who knows something about how Wall Street does business
is chief of staff Emanuel, who earned millions of dollars in investment banking after
he left the Clinton White House. His work for the Chicago-based financial services
firm Wasserstein Perella & Co. intersected with Goldman in at least one deal.
In 1999, Emanuel was a key player representing Unicom Corp., the parent of
Commonwealth Edison, in forging its merger with Peco Energy Co. to create utility
giant Exelon Corp. Goldman was also advising Unicom.
Jacobs of the University of Minnesota said that the administration now risks "kind of
a feeding frenzy."
"The administration has to be very careful," he said, "because . . . they're seen as the
ones who bailed out Wall Street. If there are indications that the administration was
talking to regulators or to Justice Department people about when and how Goldman
or other firms would be investigated, I think that's going to create almost a mob
scene."
(Margaret Talev, Steven Thomma and Tish Wells contributed to this article.)
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