Exclusive: Is Goldman Sachs Playing Fair?

Ask the average American worker about Wall Street, and they will shout about the bailouts, the bonuses and the excessive risk-taking that nearly took down the U.S. economy.

"There's enormous tension, enormous envy," said Jon Corzine, who has served as governor of and as a senator from New Jersey. "There's an enormous gap between Wall Street and Main Street."

CBS News chief investigative correspondent Armen Keteyian reports no one right now represents that gap more than the most profitable investment banking firm on Wall Street -- where Corzine was once CEO -- Goldman Sachs.

"They have succeeded for a very long period of time, and so they have become very much a symbol of what is very frustrating to the general public," Corzine said.

To understand Goldman's out-sized influence take a look at the powerful jobs held by current and former employees: three former treasury secretaries, three presidents of the Federal Reserve Bank of New York, a White House chief of staff, president of the World Bank, former chairman of the Securities and Exchange Commission (Wall Street's law enforcement arm), head of the New York Stock Exchange, heads of the Banks of Canada and Italy and even a prime minister of Italy.

Blog: Goldman Sachs' Revolving Door
The Influence and Power of Goldman Sachs

"They've been very successful at being able to get that close to people they'd like to get close to," said Anthony Scaramucci, a former Goldman vice president. Scaramucci now runs his own money management company.

"As a shareholder," Scaramucci said, "don't you want senior management creating influence like that around the world?"

But increasingly that international influence has come at a cost to Goldman's once gold-plated image - including the charge of putting its own interest above all else.

For example: allegedly helping the Greek government hide its ballooning debt - and then betting it would eventually default - contributing to a financial crisis so deep it has led to riots in the streets.

Goldman defended itself against similar accusations about its role in the housing crisis in a letter issued Wednesday, saying it didn't "bet against our clients," but rather was simply "managing our risk."

Goldman Sachs declined our request for an interview. To the company's credit, it has repaid the $10 billion in bailout money plus interest - and shifted another $500 million in bonus funds to charity. It recently said in its annual report that "adverse publicity," bad PR, could pose a risk to its bottom line.

To protect that bottom line, Goldman employs an army of lobbyists in Washington, 46 in all, from 13 different firms. That's more than Bank of America and Morgan Stanley combined.

Goldman employees also made campaign contributions to more than half of the members of the last Congress.

Last December, when the banking reform bill was before a key Congressional committee, Goldman employees showered its top Republican, Alabama Sen. Richard Shelby, with more than $34,000 in donations.

Meaning when it comes beating back regulation, Goldman isn't shy in leveraging all its connections.

"Goldman has come across in this crisis as telling people, 'we're way smarter than you, we had our cake, and we ate it too,'" Scaramucci said.

Given its nearly 150-year history, don't bet on Goldman allowing a change in that menu anytime soon.

[tsigili]

Personally, I would like to see Wall Street blockaded, and shut down. All of it.

They have succeeded in making greed the watch word for every investor, every CEO, and every bank, in the world. Why? Because they promote the concept, that only stocks, can bring you wealth.

They are the worst example of what's wrong with humanity.

[hateisafourletterword]

Just out of curiosity, what would have said above if Goldman Sachs gave almost 70% of all its money to republicans?

Would have been as calm and collected and preaching humanity?

[To_Tell_The_Truth]

Let all the democrats and republicans wage their own discussion on who took money, who didn't, who took more, who took less. At the end of the day, let everything play out on the media (thank you CBS), follow with a congressional non-partisan inquiry (if you took campaign money from devil, you don't get to play in the sandbox), and lets start prosecuting those involved as criminals (and not white collar) just like we did Bernie, and see that money doesn't buy freedom (check out Bernie's black eyes, broken bones), and that you cannot hide on the inside. If you played with the devil, and took from those you shouldn't have, then devil who is not on the inside himself, does have his own devil's on the inside that will take care of business for him (sorry Bernie). And that Karma has a nasty but just way of just always being right around the corner to nip you right where you deserve it. Or in your face, or in your ribs, or in your legs, or close to near your death bed; and then you will be revived, and let the whole process start all over again. And over, and over and over. Hope the money was worth it.

[hateisafourletterword]

Great way to divert when the facts are not in your favor. I guess you liberals cannot stand that Goldman is a terrible company that gives the bulk of its fortune to democrats.

And you try to find a back door way to lay the blame off of democrats. I would love every republican to return every dollar in the future from these a$$holes at Goldman and I bet you idiots would still try to blame them.

[hateisafourletterword]

chevyhotrod - the idiots on this site do not want the facts. They just want to make inflammatory remarks and blame the "republiCONS" as one regular moron on this site calls them.

[To_Tell_The_Truth]

It is interesting that 'hateisafourletterword' and 'chevyhotrod' have dismissed the idea of keeping anyone involved with the crisis (democrat or republican) from participating in the investigation. Instead, they prefer to make it a 'democrat' or 'republican' issue, when what it really boils down to is 'was there a crime committed, or wasn't there", and if there was 'that an inquiry, followed by a grand jury or similar indictment, followed by legal due process, and then appropriate penalties awarded, if so deserved'. But, lets keep deciding and debating who took more, who took less, and avoid the issue of was a crime committed 'yes' or 'no'. Let us continue to criticize CBS for having the integrity of running a story that they must have facts on, otherwise, they would not have run it to begin with. Let us just keep up the finger pointing, and blame blame blame, and avoid the issue at hand 'was a crime committed, yes or no?'. I am certain of one thing, in regards to my two 'blamers'; they one are either 1) so partisan they are totally blind to the issue, 2) not educated enough on the issues of MBS, the underlying securities, and the purported fraud committed, 3) they do drive a chevyhotrod, and well, that speaks to where they get their news, 4) use obscenity to make their point, which also leads me to believe, they also get their news from the same place, 5) they are not in touch with middle america, the working man, and think they are part of the 2% club, and feel a sense of entitlement (btw - you're not in the club, trust me - ie bill gates, status), or finally 6) they are in the 2% club, and are villainous, criminal, and unethical, and choose to keep pushing the 'blame' agenda to divert those less educated on the matter away from the 'true' facts at hand. Those facts being, whether a crime was committed or not. But please, you keep getting your information from a reliable source, you pass on CBS, the Financial Times, Charlie Rose, and other 'non-independent, and partial' media outlets. Keep on listening and believing in the 'truth' as it is reported in your media. And at the end of the day, you look at your 401K, your unfunded pension liability, and where your next meal is going to come from; and then decide 'am i really in the 2% club?' because odds are; you're not if you have to ask yourself that question. All the best to you in the years to come.

[zorbaka]

They will and do give money to both dems and reps. thats the problem, the two parties take the money and talk to their lobbyists, not listening to the public and are effectively compromised and paid for. both parties have many who are holding up a for sale sign. Obama too is spending his time having 38000 dollar dinners to raise money.

[To_Tell_The_Truth]

Friends,

First, let us resolve that this is not a 'democratic' or 'republican' issue. What this story tells us is that there is an overall lack of transparency when it comes to the dealings of Goldman Sachs (GS). It also raises questions as to what role GS played in what is probably the world's greatest financial crisis (National and Global).

Let us ask these questions...

1) Were they a conspirator in this collapse?,

2) Were they given preferential treatment by our government in the bailout crisis?,

3) Did they take the 'bailout' money, promptly pay it back, and,

4) (Then) pay out record bonuses to their employees even in the midst of the world's greatest financial crisis of all time?;

5)Did they fuel the sub-prime loan market crisis by telling banks and their brokers, give me "everything and anything you've got, we can quickly package them into 'investments' and relieve you of the credit risk? (Then put the risk on AIG and individual investors)" ;

6) Did they then turnaround and bet against the demise of these investments, knowing that what was being bought and repackaged, was ultimately garbage?'

7) Did they know that their (or conspire with their) 'banking' partners in allowing/facilitating their 'brokers'/'partners' to override key underwriting components of a basic residential mortgage loan, in the sole interest of boosting 'client' and personal profit?; (see WAMU desktop underwriter override capabilities);

7) As to Greece, did they knowingly conspire to facilitate, organize and collapse debt?, and;

8) Then bet against them longer term; and realize that doing so would pay huge dividends for their 'clients' and increase their own personal bank accounts?; and finally;

9) Did they knowingly use proprietary inside information (a crime) for the gain of their client's and own personal interests?

I think the best and quickest way to answer these important questions is to

1) Look towards a congressional inquiry,
2) Look towards a federal indictment,
3) Look towards a class action state indictment, and
4) If found guilty of a crime or crimes;
5) Indict similarly and swiftly as to that given to Mr. Madoff, with no cushy club-fed apartment, but, a true criminal sentence in a medium to maximum security prison.

And friends, let's also agree that there should be 'no presidential pardon' for those involved.

If you were a participant/conspirator, then became a public official because after your greed, you needed to either:

a) end up with your name on a dollar bill, or

b) at the advice of your attorney, join public service so you can receive a 'pardon' (if needed); then let us just cut that cord from day one.

If you are truly not-guilty, and no you will be exonerated of all questions relative to your own personal integrity and ethics; then why would you need a 'pardon' anyway. Let your actions speak for themselves.

I don't know, friends, it is a lot to digest. What I do know is that I was in the industry as a prior regulator, and an employee of one of the big 4 for eight years specifically involved in banking issues; and finally what i witnessed at WAMU and GS (yes, I worked there for years); what I saw was not what I would call ethical and in compliance with law and regulation.

As mentioned above, I think we should play this out in the media, get the questions raised, see who answers what and how, follow with a congressional non-partisan inquiry (ie: anyone who took lobbyist money excluded); and then see what the courts have to say about it.

Friends, sound fair? I think it does. I of course, would be interested in your non-partisan comments.


Best,

A small business owner, a prior regulator (OCC), and prior manager with a big 4 accounting firm (4 letters, guess...)

[ellensmithee]

We should have known it from their name. They want gold sacks, man!

Goldman Sachs is evil and greedy and they will bring what was once a great nation all the way down. When it happens, this is who to blame. And many more corporations like them, feeding off people who have less than they do. And Republicans have the nerve to withold healthcare for the nation? We are the workforce they suppress with low pay, no benefits, high prices, and crappy products. You will find out one day all this was orchestrated by them. All these corporations are making money off this financial crisis. They are truly evil.

[hateisafourletterword]

Are you that damn dumb? Seriously, the democratic party is owned by these large banks and you blame the republicans?

[afmcalax]

I find it funny that the story is about how Goldman Sachs continues to destroy both our domestic and international economies for their bonuses and the Republican hate machime gets on and tries to divert the discussion to George Soros. Let's stay on message here ... Wall Street is corrupt; Wall Street feels they are untouchable and accountable to no one. America has a chance to re-regulate these corrupt, self-serving entities and the Democrats produce a water downed bill and the Republicans are even trying to destroy that. Wall Street pushes money around; they do not produce anything of substance or of lasting value. Until we realize they are just money changers enthralled with themselves and need to be regulated; they will continue to manipulate us like puppets.

[hateisafourletterword]

So you want to blame the republicans for this? Do you have a GD brain? Can you read numbers?

Goldman Sachs gave nearly $1 million to Obama in 2008. McCain got $230,000. They have given $32,000,000 to politicians since 1990 - over $20,000,000 of it went to democrats. You do understand these numbers, correct?

They own the democratic party as does Soros.

But continue to rail at republicans all you want and you will get what you deserve - Wall Street is in the democrats pockets!

[rightbehind]

Can't wait for Christ to come back. He knows what to do with money changers.

[hateisafourletterword]

leftbehind - Goldman Sachs are Jewish. They do not believe in Christ.

[book_of_wally]

This is why Bushs hands off approach to wall street was really bad. There were so many scams going on during those 8 years.

[hateisafourletterword]

And there were no scams in the 1990's right? Exxon and Mobil merged when? Worldcom was scamming when? Enron was scamming when? All the bank mergers occurred in which decade? Even Madoff started his little Ponzi scheme when?

[ahrats]

They have the U.S. government/Treasury in their pocket. They are the cause of the downturn. B&S played it both ways so they could make money on shorting the market while telling investor it's growing, and getting AIG to insure that should the market have been on the BULL side and lost they could collect twice. None of this is technically illeagal. They have collected americans money from the government, at no interest (AIG BAILOUT MONEY) which B&S does not have to pay back and collected on shorting the housing market. B&S is big enough to make the market move in the direction they want it to move and have enough inside information and contacts in the GOVERNMENT to keep all profits without any penalties. Have you ever noticed B&S and AIG occupy buildings right next to each other on WALL ST. B&S may own wall street and the government and be rich but we the people can topple them easy with mindless violence. B&S can install bullet proff glass on their building but their excutives can not live 24/7 there.

[spaceatoms]

Now you know why they shut down the economy for 10 years in the 1930's, it was long enough to revamp the general system and build integrity again, plus it weeded out all some of the back door stuff going on. There is no main street right now!

[perk235]

They are also laughing at us as we dissemble into arguing from a republican or democrat point of view. The more we do this, the more they can get away with.

[hateisafourletterword]

As Johnny Cochran would say,

WHEN THE FACTS ARE AGAINST YOU, BLAME THE SYSTEM NOT BLUE!

[rightbehind]

economic cannibalism