New PAI report on Obama nominee’s role in PetroChina/Sudan financing
By Kevin Connor  •  Jul 21, 2009 at 14:05 EST

On Sunday I blogged about the key role of Bob Hormats, Obama’s recent nominee for undersecretary of state, in the stock offering of PetroChina, a company linked to Sudan’s genocidal regime.

Hormats’s Goldman Sachs connection has been criticized elsewhere, but his Sudan ties deserve more scrutiny.

This is no insignificant matter: as a Goldman Sachs executive, Hormats threw his weight behind a stock offering that helped to finance Sudan’s genocidal regime. He did so in a deceptive and, as it turned out, illegal manner. And he did so despite the fervent opposition of a broad coalition concerned about the link between oil revenues and the Sudan genocide. This coalition included government officials (including members of the Reagan administration), labor unions, human rights organizations, and religious groups.

The Public Accountability Initiative (PAI, the 501c3 behind LittleSis) will be releasing the Hormats research in the form of a report and circulating it to various stakeholders and Senate offices. The introduction is below, the full report is here.

As Goldman exec, Obama nominee played key role in Sudan-linked IPO

Despite human rights concerns, State Dept nominee pushed through illegal PetroChina offering

President Obama’s recent nominee for undersecretary of state, Robert Hormats, is another in a long line of Goldman Sachs executives to secure influential posts in government. But his nomination deserves special scrutiny, above and beyond growing concern surrounding the bank’s influence in government.

Hormats played a crucial role in a 2000 Goldman Sachs deal that was fervently opposed by religious groups and human rights advocates and later cited by the SEC as an example of illegal market manipulation: the $3 billion initial public offering of PetroChina, a company with ties to Sudan’s genocidal regime.

Key facts concerning Hormats’s role in the PetroChina IPO:

  • With the PetroChina IPO facing significant opposition from human rights advocates, Hormats assured members of the press that no funds from the offering would be used for work in Sudan.

  • These statements later proved to be inaccurate and misleading. Several large institutional investors, including Harvard, have since divested from PetroChina, citing human rights concerns.

  • The SEC later cited Hormats’s remarks as evidence of illegal market tampering, or “market conditioning,” in a larger case against Goldman Sachs, which the bank settled for $2 million.

Hormats’s role in the PetroChina deal raises serious questions about his fitness to serve in a post that will give him substantial influence over international economic policy and US-China relations.

  • Illegal and deceptive financial practices. As a Wall Street executive, Hormats deceived investors and violated SEC rules in order to promote Goldman Sachs’ interests in the PetroChina deal. With this record, can he be a credible advocate for sound international economic policy?

  • China, Sudan, and human rights. By offering support for the PetroChina deal, Hormats flouted human rights and national security concerns as they pertained to China and Sudan. With this record, can he effectively represent US interests in managing US-China policy?

  • Goldman Sachs and conflicts of interest. How will Hormats negotiate the conflicts of interest accrued during his time at Goldman Sachs?

These questions deserve critical examination from the Senate as it considers the Hormats nomination.

This Public Accountability Initiative brief outlines key findings and supporting documentation and raises important questions for Robert Hormats.

The Public Accountability Initiative is a 501(c)3 research and educational organization focused on corporate and government accountability. To learn more, see p. 6 of this brief, visit our website at http://public-accountability.org, or see our work at LittleSis (http://littlesis.org).

10 Responses to “New PAI report on Obama nominee’s role in PetroChina/Sudan financing”

  1. David Says:

    I e-mailed the dept of State about this, but I don’t think it will do anything or matter. Obama doesn’t care about doing the right thing. He wants us to serve our nation, but he’s not willing to serve the American people…instead of the corporations

    I feel so guilty that I voted for Obama…next time, I’m voting Green.

  2. Lynn Says:

    “Hormats assured members of the press that no funds from the offering would be used for work in Sudan. ”
    How will Hormats know if it is our money or someone else’s doing the funding???

    As much as I am pro-Obama… This is Obama looking after our interests? He seriously needs to consider asking Hormats to resign.

  3. Kathryn Says:

    It just gets worse. The LAST thing the Obama needs is another appointee from Goldman Sachs. Honestly, I don’t know what he’s thinking. This latest news seals it–he should withdraw the nomination.

  4. D. Weiss Says:

    More unchecked Goldmanites in positions of power. Funding genocide, funding poverty in America, funding immorality. It’s really all about the bottom line at GS, and it feels like it’s all about the bottom line in DC too, unless this nomination is pulled. Obama FAIL.

  5. Maddie Says:

    Reading this post makes my heart hurt for so many different reasons. How disappointing. The Obama Administration is so fervently opposed to lobbyists working for them that they rebuffed qualified individuals, yet G.S. influence continues to be permissible… It should have been Hillary.

  6. Ron Erickson Says:

    I first met Bob Hormats 35 years ago when we were both young policy analysts. He is a thoughtful man and will be an extremely able representative of our interests in the global economic community that he knows so well. This is a good and thoughtful choice by the Obama administration. Candidly, however, the choice of Hormats more accurately reflects the power of Clinton to control her own appointments at State. That may be the larger “back story” behind an otherwise first class appointment.

  7. Mister Says:

    “Paying customers go to the front of the line.” – Matt Taibbi

  8. Strange Obama appointment « Later On Says:

    [...] via Eyes on the Ties » a blog by LittleSis » Blog Archive » New PAI report on Obama nominee’s role …. [...]

  9. Khalid Hammour Says:

    For people who thinks that Darfur crisis is between arab and african , and those who estimated the deat cases in hundred thousnads , please come from the comfortable offices and shit firms and see how it looks like .. Come to see how the rebelians destroy the infrastructue which costs us alot under the sanctions which you made it while drinking and laughing there trying to send us to the stone age , nothing but just for getting oil and running after squeezing us to the last drop of blood. We are different , we dont want you , we dont like burger , we dont love coke , we love small cars not SUV’s . WE HATE YOU SO MUCH out of your borders. You come to our country and try to teach us how to live when you are stealing our lives , you come to bring freedom with killing my people in Iraq and rape their women !!!! Who teaches us , you with millions of people killed and handicapped all through the world !!!!! And still seeking for an answer why we hate you !!!!
    What a silly nation and a silly demogracy which you wanto deliver us , teach yourself first how you obtained this land from Red Indians , how you slaughtered and enforced them to live like servants .. DAMN YOU < I REALLY HATE YOU AMERICAN AND 6 BILLIONS WITH ME !!

  10. Eyes on the Ties » a blog by LittleSis » Blog Archive » Hormats faces questions about PetroChina in Senate hearing Says:

    [...] Robert Hormats was forced to discuss his role in the IPO of PetroChina. The IPO was the focus of a LittleSis / PAI report in late July and led anti-genocide groups to raise questions about the nomination. The nominee [...]

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