So far, Goldman Sachs has managed to ride out the crisis while a number of its competitors have vanished into failure. Perhaps GS has more luck, or better management, but they have another asset going for them — lots of allies in Congress. ABC News reports that GS spent more than $43 million in lobbying and contributions to political races over the last twenty years, and have been especially active in this cycle:
The embattled Goldman Sachs investment banking firm and its employees have spent more than $43 million dollars on lobbying and campaign contributions to cultivate friends and buy influence in Washington, D.C. since 1989, according to an ABC News analysis of campaign finance records compiled by the Center for Responsive Politics.
As a group, Goldman Sachs bankers have been the country’s top political campaign contributors this year and have given $29.5 million in contributions since 1989, according to the Center.
“They are almost in a class by themselves,” said Sheila Krumholz, the executive director for the Center for Responsive Politics.
How much has GS “invested” in the race this year? John McCain took $208,000 from GS employees, making GS his fourth-largest source of income, and his top 5 contributors all come from Wall Street. However, Barack Obama has more than tripled McCain’s take, hauling in over $690,000, making GS the largest single source of contributions for Obama. Citigroup and JP Morgan Chase come in #3 and #4 for Obama as well. Interestingly, over the last 20 years, Goldman Sachs has favored Democrats over Republicans by almost 2-1. They’ve produced over $4 million in this cycle alone, 73% of which went to Democrats. Over $1.1 million of that went to Obama and Hillary Clinton alone.
Why is this the case for both candidates and the rest of Congress? Until recently, Wall Street was rolling in money — and wanted to protect the golden goose. That didn’t save Merrill Lynch, but ML only spent $14 million in that time, too. Merrill Lynch favored Republicans 2-1. I guess that was a bad bet.
How well connected is Goldman Sachs? Current Treasury Secretary Henry Paulson ran it as CEO from 1998 until he took his current position. Clinton’s Treasury Secretary, Robert Rubin, was co-chair at GS. The White House chief of staff, Josh Bolten, was an executive in their international offices in London.
What does this mean? Perhaps nothing, but with Congress deliberating about putting $700 billion in taxpayer money at risk, the contribution patterns of the beneficiaries of those contributions certainly seems interesting.