Financial Regulation

Republicans Democrats Politicians Are Involved With Wall Street


As the fight over financial reform heats up, both parties have attempted to warn the American people about the other side's long-standing affair with Wall Street: Senate Majority Leader Harry Reid called on his GOP counterpart, Minority Leader Mitch McConnell, to disclose the content of a recent meeting with Wall Street executives; Republicans have seized on Goldman Sachs' recent hiring of White House attorney Gregory Craig. Which side has been seduced the most fully, the most often? Who cares? It's a threesome:

All your politicians are belong to us.

In the often-confusing debate on financial regulatory reform, there are many assertions and accusations but few facts. Yet here are two: Washington is awash in Wall Street money, and both Republicans and Democrats are recipients.

Democrats have an edge when it comes to raising funds in lower Manhattan, and particularly from Goldman Sachs, the investment bank being sued by the Securities and Exchange Commission.

The financial sector has given $11.1 million to the Democratic National Committee and its two congressional campaign committees so far this election cycle, compared to $7.3 million for Republicans, according to Goldman has given about 70 percent of its donations to Democrats this cycle and gave 75 percent of its $6 million in donations to Democrats in the 2008 election.

Republicans get their share, too, especially in the Senate where financial reform will be decided. Out of the $7.3 million given to the Republican campaign arms, the National Republican Senatorial Committee got $4.3 million.

NEXT: Obama: Washington Needs to Be More Like California

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  1. Looks like Goldman Sachs got screwed then. But aren’t all these totals the aggregate of contributions received from employees of these companies, not the company itself?

  2. Has Blankfein called the Ascended One and asked for his money back, yet?

    1. Obama took nearly $1M from the evil Goldman Sachs. I would think the One would jump at a chance to give it back.

      1. So what are you trying to tell me – that he can dodge campaign contributions?

        1. I am saying that it is not unheard of for a politician to return a campaign contribution to a person or entity after it is determined that the person or entity has tainted the commensurate value of the contribution.

  3. “Which side has been seduced the most fully, the most often? Who cares?”

    Actually, I think the smarter question is asked from the other side of the fence…

    If Goldman Sachs is up in everybody’s politics, what did they get for their money?

    They were thrown to the wolves after September of ’08. They’re being thrown to the wolves now. They’ve been the main object of the Obama Administration’s witch hunt since he’s been in office…

    If Goldman Sachs has been buying political influence, why doesn’t there seem to be any difference between their friends and their enemies?

    I guess a witch hunt lifts all boats. Even here at Hit & Run, I can’t seem to find anybody that isn’t under the impression that Goldman is somehow responsible for TARP, the mortgage crisis and everything else…

    Really, is association with Goldman Sachs supposed to be socially unacceptable?

    Investment banking isn’t the cause of everything that’s gone wrong in the world, and Goldman Sachs isn’t responsible for any of it. …but that seems to be the underlying assumption. Really, this is starting to smack of something historically persistent and ugly.

    1. Kind of like the Toyota business. The latest issue of Popular Mechanics trashes the witch hunt, noting that Congress’ “investigation” couldn’t be less scientific.

      1. “Kind of like the Toyota business. The latest issue of Popular Mechanics trashes the witch hunt, noting that Congress’ “investigation” couldn’t be less scientific.”

        I haven’t seen that–I’ll look for it! And it’s really a stupid time to be having a witch hunt…

        Whether you’re talking about the recovery that happened in the early ’80s, the early ’90s or right after the telco and internet bubbles, investment bank activity, from IPOs, secondary offerings, LBOs, and especially M&A, that’s the machinery that makes turn around possible!

        The dumbest thing in the world the President could do right now is go after what makes the economy transition go!

        P.S. The Toyota thingy? When I was watching the hearings on CNBC, one of the representatives had the dumbest line of questioning I’ve ever seen in my life! This with hunter, I forget her name or where she was from, but she kept going after Mr. Toyoda, yelling about how he should have to admit that Japanese workers weren’t better at quality than American workers…

        He answered back that the cars were all manufactured in the United States–and she didn’t know that! She couldn’t comprehend the fact that Toyotas were manufactured here in the US! And even after he explained it to her, she still kept going with it, like a wind up toy!

        Witch hunts! This Goldman witch hunt is different though… This witch hunt after the investment banks is the Obama Administration’s reaction to the centrists in the Tea Party.

        Know that. This is the Obama Administraion’s attempt to address the centrists who are sympathetic to the Tea Party’s concerns. It really is just politics. And he doesn’t give a damn if the investment banks can’t get any work done because of the witch hunt and it hurts the economy. …as long as it helps him politically.

    2. GS isn’t responsible for any of it? Your so full of shit your eyes are leaking shit. I read the complaint. GS flat out lied to their clients, if it’s true. There’s no gray area, there’s no wiggle room.

      According to the SEC’s complaint, filed in U.S. District Court for the Southern District of New York, the marketing materials for the CDO known as ABACUS 2007-AC1 (ABACUS) all represented that the RMBS portfolio underlying the CDO was selected by ACA Management LLC (ACA), a third party with expertise in analyzing credit risk in RMBS. The SEC alleges that undisclosed in the marketing materials and unbeknownst to investors, the Paulson & Co. hedge fund, which was poised to benefit if the RMBS defaulted, played a significant role in selecting which RMBS should make up the portfolio.

      The SEC’s complaint alleges that after participating in the portfolio selection, Paulson & Co. effectively shorted the RMBS portfolio it helped select by entering into credit default swaps (CDS) with Goldman Sachs to buy protection on specific layers of the ABACUS capital structure. Given that financial short interest, Paulson & Co. had an economic incentive to select RMBS that it expected to experience credit events in the near future. Goldman Sachs did not disclose Paulson & Co.’s short position or its role in the collateral selection process in the term sheet, flip book, offering memorandum, or other marketing materials provided to investors.

      The SEC alleges that Goldman Sachs Vice President Fabrice Tourre was principally responsible for ABACUS 2007-AC1. Tourre structured the transaction, prepared the marketing materials, and communicated directly with investors. Tourre allegedly knew of Paulson & Co.’s undisclosed short interest and role in the collateral selection process. In addition, he misled ACA into believing that Paulson & Co. invested approximately $200 million in the equity of ABACUS, indicating that Paulson & Co.’s interests in the collateral selection process were closely aligned with ACA’s interests. In reality, however, their interests were sharply conflicting.

      And in the complaint, they have the emails and internal memos to back it up.…..-mortgages

      1. Did it say anything in the documents about the US Taxpayer bailing them out if they failed? ’cause, really, Goldman doesn’t have the power to do that.

        Again, don’t blame TARP on the people who lost money, blame TARP on the people who created TARP, funded TARP, administered TARP, and voted for TARP.

        Blame the Bush Administration. Blame the Obama Administration. Blame the Democrats and Republicans in Congress.

        Why you’d blame Goldman for what our representative politicians did is beyond me.

      2. “And in the complaint, they have the emails and internal memos to back it up.”

        And by the way, are we still talking about the same CC rated portfolio you were talking about yesterday?

        You didn’t answer that yesterday, how can it be unreasonable to short a CC rated portfolio sold to qualified investors?

        According to Wiki, a CC rating on a tranche means “In default with little
        prospect for recovery”.

        I’ll say it again, if the government used taxpayer money to bail out qualified investors who were speculating on a CC rated tranche, then the officials who did that deserve to be in prison.

        They tricked people who knew they were buying investments that were “in default with little prospect for recovery” because they were shorting such instruments. If that’s the same portfolio–I’m not sure that passes the smell test.

      3. “GS isn’t responsible for any of it? Your so full of shit your eyes are leaking shit. I read the complaint. GS flat out lied to their clients, if it’s true. There’s no gray area, there’s no wiggle room.”

        I still contend that Goldman benefited little from any of this–but even if they did…

        It’s the difference between blaming someone for buying your stolen car and blaming the person who actually stole your car.

        Your representatives stole your future earnings and forcibly shoved it down Goldman’s throat…

        So why blame Goldman?

        It’s because a) the politicians can’t blame themselves and b) because people hate Wall Street bankers going back to before 1929!

        If you’re a politician, why not blame the bankers? “Look what they made me do!”

        I call shenanigans.

    3. If Goldman Sachs is up in everybody’s politics, what did they get for their money?

      You’re kidding, right? They’re still in business. They should have gone out of business, but instead, they got this:…..anza-lloyd

      1. It’s even more than that. I was just watching Dick Fuld from Lehman testify. He said if they would have been granted access to the Fed’s discount, the way GS was, they would still be in business.

        I guess Lehman didn’t grease the same palms as GS.

      2. “Goldman’s latest bailout coup was a $12.5 billion paid out of AIG’s $180 billion government cash infusion.

        Until it was fully extricated, Goldman always characterized its exposure to AIG as “immaterial,” and that its $20 billion notional exposure to AIG was hedged. Turns out that it was — through government bailouts that didn’t exist when Goldman entered the contracts.”

        That’s only half the facts.

        Like I said elsewhere, AIG owed Goldman a bundle, and the government canceled Goldman’s contracts–unilaterally–when it took over AIG.

        Like I said elsewhere too, there’s no question that Goldman wouldn’t have gotten what the regulators gave them for those contracts in the market or in bankruptcy court–but let’s not miss the bigger picture.

        At that point in time, the government was forcing many investment banks to take TARP against their will! The government was trying to shore up public perception of the state of the banking business–and they didn’t care whether Goldman wanted the money or not!

        Goldman fought taking TARP. Goldman led the charge to make the regulators let them pay it back as soon as possible–and they had to fight Congress to let them do it! The government, at first, refused to let Goldman pay the TARP back!

        It was in that spirit that the AIG contracts were paid out. I’m not saying Goldman was about to turn down free money at that point, at the time of AIG’s takeover, but a reasonable person should see that what the government was doing at that point was shoving money down the throats of every bank they could just to assuage market panic…

        Goldman was forced to take TARP too–and didn’t want it. They made them reorganize, and then told them they couldn’t change back!

        And what I’m trying to get across to you is this–if Goldman was treated like a TARP rape victim just after AIG happened, I think instead of blaming the victim, we might take a look at what the rapist was doing.

        We know they force-fed them TARP right after that–so why do we assume the AIG money wasn’t thrust on them as well? Sure, they probably thought it was a god send at the time–not knowing that the guy that just bought ’em dinner was about to get real demanding and forceful.

        Nobody turns down free money. And TARP wasn’t free–not to Goldman. They didn’t want it, they fought taking it in the first place, and they fought to give it back as quickly as possible.

        So why are we blaming Goldman for TARP? Why aren’t we blaming the rapist instead of the victim?

    4. Thrown to the wolves, or thrown in the briar patch?

  4. They were thrown to the wolves after September of ’08.

    I’m sure they were somewhat comforted by the fact that AIG paid them off at 100 cents on the dollar. For a million dollars, I’ll let you call me names.

    1. It’s actually more complicated than that.

      Goldman held insurance contract from AIG. The first thing the government did when they took over AIG was cancel those insurance contracts unilaterally.

      It was part of the force feeding of TARP, actually, which Goldman never appeared to want or need…

      But given that the government had taken over the entity that owed them a ton of money, and then canceled the contracts, it seems to me that Goldman had a clear claim on something!

      I’ll admit they shouldn’t have gotten a 100 cents on the dollar–they wouldn’t have gotten that in bankruptcy court–but we might need to agree to disagree on the motivation there. Somehow gross incompetence on the regulators’ part seems like a perfectly reasonable explanation to me. It’s certainly been my contention all along that bankruptcy would have been better for the taxpayers than what happened…

      Apart from that, in big picture, hasn’t it been clear that the Obama Administration has been gunning for Goldman from day one? And I don’t see anybody workin’ to cover them on the other side of the aisle either.

  5. Imagine your a taxpayer.
    Imagine your tied to a tree, the theme from Deliverance is playing, and a clan of Republicrats and Democans is saying to you, “Taxes are the price we pay for civilization!” while each one is pumping your backhole, piehole, (babyhole – if your a female), noseholes, and earholes. Don’t quite matter if its 3 Democans and 4 Republicrats or vice versa – all that matters is that there is plenty of K-Y around.

  6. Really, this is starting to smack of something historically persistent and ugly.



    teh JOOS!

    1. Merovingian space lizards?

  7. I am trying to read HR 4173 at this moment and well, not having much luck shall we say? I am new at this, can anyone recommend a resource that explains what is in it/what it proposes? Layman’s terms, please. 1700 pages is rather intimidating…

    Thanks in advance,


  8. The white devils stole all the wealth from Democrat and Republican politicians. The government must reverse this injustice.

  9. Give us $787 billion or the kid gets it!

    1. OK, the kid gets it.

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