Kevin Price
Ugly rumors surround Goldman Sachs investigation
By Kevin Price
May 11, 2010

I am no fan of Goldman Sachs. They have eaten at the government trough and entangled itself with the political establishment in such a way that anyone should be embarrassed about doing business with them. The company took billions in bailouts on the one hand and gave even more in bonuses to its employees. The corruption demonstrated by the firm in the way it conducts itself is breath taking. On the other hand, it is also reflective of a new business and political culture that makes such activities very "legal" (at least until they are challenged in the courts).

This is not a unique sentiment. The vast majority of Americans that have an opinion on the financial firm probably share a similar view. So when it was announced that the Securities and Exchange Commission was going to press charges on the financial firm, most Americans were pleased and thought "they deserved it." Now there are questions about what the charges are based on, since their behavior does not appear any different than the many other financial companies that took advantage of the bailouts of 2008 and 2009.

Charles Gasparino of Fox Business is keeping a close eye on the story and is raising some important questions that we should all be asking. He wrote in his column that the charges against the firm "are widely regarded as the most aggressive enforcement action against a major Wall Street firm in years. They also come as Wall Street has begun one of the most aggressive lobbying efforts in recent memory to kill aspects of Sen. Chris Dodd's financial reform legislation, which has many on Wall Street believing the charges were motivated at least in part to give momentum to the bill, FOX Business has learned."

"Momentum" may be an understatement. It is true, the lawsuit against Goldman Sachs will have dollars spent by the firm on defending itself, rather than lobbying members of Congress. Especially since the actions of the US has had a domino effect and countries around the world are lining up to go after the financial giant. Furthermore, since the company is being treated like a criminal, it is likely that its criticism of the financial legislation being promoted by the administration would fall upon deaf ears.

Gasparino observes that "In Washington, the aggressiveness of the lobbying efforts has been a controversial issue. One senior executive at a major Wall Street firm said people inside the administration are annoyed by the push and that it only strengthened the White House's resolve to keep the Volcker Rule in place. But people at JP Morgan and Goldman say they believe in the end the administration will back off so it can get a financial-reform bill passed. Republicans oppose the bill on the grounds that it allows the government to continue to bail out large banks that bet wrong in the markets." If this lawsuit turns into little more than harassment it could prove to be a major embarrassment for the Obama administration. Unfortunately, these type of embarrassments have become quite common for this president.

© Kevin Price


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Kevin Price

Kevin Price is Publisher and Editor in Chief of

His background is eclectic and includes years of experience in both business and public policy, as well as two decades of experience in broadcast journalism. He was an aide to U.S. Senator Gordon Humphrey (R-NH) and later went on to work in policy areas with some of the nation's leading think tanks including the National Center for Public Policy Research and was part of the Heritage Foundation's Annual Guide to Public Policy Experts... (more)


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