By Peter Roff, Thomas Jefferson Street blog
As the Democrats attempt to push a new financial regulation bill through Congress the emerging Goldman Sachs scandal threatens to engulf the Obama administration.
As most everyone now knows, the U.S. Securities and Exchange Commission has brought suit against the giant Wall Street firm, charging it deliberately misled investors who participated in a mortgage securities trade that was designed to fail. The firm, which posted a profit of more than $3 billion for the first quarter of 2010, denies the allegation, has come to symbolize in the minds of many the kind of bloated, malefactor of great wealth the Democrats used to suggest pulled the strings in the Republican Party.
The problem now is that the shoe is on the other foot.
As J.P. Freire writes in Tuesday’s Washington Examiner, Goldman Sachs employees gave Obama “nearly seven times as much as President Bush received from Enron workers.” He adds:
... the mere $151,722.42 (inflation adjusted) in contributions from Enron-affiliated executives, employees, and PACs to Bush hardly add up to Obama's $1,007,370.85 (inflation adjusted) from Goldman-affiliated executives and employees. That's also not taking into account how much Goldman contributed to Obama cabinet member Hillary Clinton ($415,595.63 inflation adjusted), which was itself almost three times as much as Bush received as well.
Enron’s connections to the Bush White House, as Freire points out, was hyped by an hysterical Washington press corps once the company turned turtle, helped leverage the passage of the economically-damaging Sarbanes-Oxley bill. On the other hand the Goldman connection seems to be slowing the progress through Congress of the Obama-backed Wall Street bill.
House Minority Leader John Boehner and others have derided the proposed financial regulation bill as being nothing more than another bailout of the big banks. Up to now the American people have not really been provided with a thorough analysis of the legislation and its impact on Wall Street. Expect the Goldman Sachs connection to the Obama White House to be the sparks that provide it.