Goldman Sachs has enlisted former White House counsel Gregory Craig to help the embattled Wall Street giant navigate through a grilling on Capitol Hill and an investigation for alleged fraud by the Securities and Exchange Commission, according to Politico.com.
The mammoth bank was slapped with the surprise fraud charges by the SEC on Friday, related to a complex subprime mortgage deal that was coordinated prior to the collapse of the housing market.
Craig, a source familiar with the bank's dealings tells Politico, was hired for his "deep understanding of the legal process and the world of Washington."
The source told Politico that comfort operating in both of those arenas is important, "for everybody in finance right now."
As Politico's Eamon Javers and Mike Allen point out in the article, they're of particular importance for Goldman.
The news website's source said Craig, who has deep connections with the Democratic party, wasn't brought onboard strictly for his rolodex. "It's about advice and process," said the unnamed individual.
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Politico says Craig, who served as White House counsel during President Obama's first year in office, began working with Goldman about three weeks ago. He went into private practice with Skadden, Arps, Slate, Meagher & Flom after departing the executive branch of government.
"A former White House employee cannot appear before any unit of the Executive Office of the President on behalf of any client for 2 years -- one year under federal law and another year under the pledge pursuant to the January 2009 ethics E0," a White House official told Politico.
The White House told the website it had no contact with the SEC on the Goldman Sachs case. "The SEC by law is an independent agency that does not coordinate with the White House any part of their enforcement actions."
Politico says Goldman executives are expected to give some details of their plan to counter the SEC investigation and Washington inquiry during an earnings report conference call on Tuesday morning. The firm has invited clients and public officials to join the call, rather than rely on news organizations for an interpretation of their battle plan.