Goldman Sachs’ White House ties run deep
By Aaron  •  Jul 20, 2009 at 10:22 EST

While Goldman Sachs‘ managing partners prepare their lists for Fifth Avenue shopping sprees on bonus day, the firm’s public relations department is grappling with an image problem that has some staying power. Goldman’s record profiteering at a time of chronic unemployment and systemic crisis along with Matt Taibbi’s superb article on Goldman’s role in market manipulation and the high-profile arrest of former Goldman programmer Sergey Aleynikov, who allegedly downloaded Goldman code that can be used to manipulate markets (who knew?), have conspired to create a perfect storm of populist backlash directed at the firm.

Kevin’s excellent posts on Goldmanite-turned-Obama designee Bob Hormats, who helped to enrich the genocidal regime in Sudan, caused me to wonder how many Goldman alumni occupy positions of power in the administration. In recent months, we’ve highlighted the astonishing White House influence exercised by his eminence Robert Rubin, former Goldman chairman and key architect of our ill-fated financialized economy. Rubin’s protege include Treasury Secretary Tim Geithner, NEC Director Larry Summers, Michael Froman, Jason Furman and Assistant Treasury Secretary Michael Brill. Furman, OMB Director Peter Orszag and Undersecretary of the Treasury for International Affairs-designate Lael Brainard were all closely associated with Rubin’s think tank, the Hamilton Project, housed at the Brookings Institute.

But Goldman’s influence in the White House is not limited to the Rubin network. In addition to Hormats, at least five Goldman alumni hold high-level positions in the administration. Mark Patterson, whose appointment as Chief of Staff at Treasury highlighted Obama’s willingness to make arbitrary exceptions to his new ethics policies, was Goldman’s chief D.C. lobbyist. Diana Farrell, Deputy Director of the National Economic Council, worked at Goldman for several years in the late 1980s. Philip Murphy, recently nominated to be ambassador to Germany, spent 23 years at Goldman, rising to the position of senior director.

More than six months into the new administration, two Bush holdovers with Goldman ties have managed to hold on to influential positions at Treasury. Former Goldman VP Neel Kashkari, Henry Paulson‘s ballyhooed choice to hand out TARP funds, continues to administer the program as Assistant Secretary of the Treasury for Financial Stability.

One of the more alarming of the Goldman-turned-regulators is Karthik Ramanathan, who traded derivatives in Goldman’s London and New York offices prior to this appointment as Assistant Secretary for Financial Markets by Bush. He now serves in the same role as an interim capacity. However cliched it may be to say that Ramanathan, a derivatives trader on hiatus charged with reforming the obscure and dysfunctional derivatives market, is a fox guarding the hen house, it is also an apt metaphor for his presence at Treasury, and one that helps to explain the broader phenomenon of how Wall Street has so far managed to avoid the reckoning coming to it.

One Response to “Goldman Sachs’ White House ties run deep”

  1. The White (Goldman Sachs) House Says:

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