Congress Has 43,457,362 Reasons to Help Goldman Sachs

Embattled firm and employees spent millions in donations and lobbying expenses.

September 26, 2008, 8:26 AM

September 26, 2008— -- Not all their money has gone for mansions and Ferraris.

The embattled Goldman Sachs investment banking firm and its employees have spent more than $43 million dollars on lobbying and campaign contributions to cultivate friends and buy influence in Washington, D.C. since 1989, according to an ABC News analysis of campaign finance records compiled by the Center for Responsive Politics.

As a group, Goldman Sachs bankers have been the country's top political campaign contributors this year and have given $29.5 million in contributions since 1989, according to the Center.

"They are almost in a class by themselves," said Sheila Krumholz, the executive director for the Center for Responsive Politics.

"Their top executives are in a class that is way above the clout and name-dropping that most other American businesses can achieve," says Krumholz.

The firm has been badly shaken by the financial crisis, with management seeking emergency infusions of cash. The bailout legislation, proposed by Treasury Secretary Henry Paulson, reportedly led financier Warren Buffett to put $5 billion into Goldman Sachs because he felt the government would act to solve the financial crisis.

In a statement, Buffet expressed confidence in Goldman Sachs. "It has an unrivaled global franchise," he said, "a proven and deep management team and the intellectual and financial capital to continue its track record of outperformance."

Though he did tell the Wall Street Journal that if the government fails to act that his investment in Goldman would "get killed, and so will all our other investments."

Before becoming Treasury Secretary, Paulson was chairman of Goldman Sachs, earning over $140 million in compensation during his seven years as the firm's top officer, according to company filings. Upon taking office, Paulson divested himself of his 3.23 million Goldman shares, reportedly worth $485 million at the time, to comply with government ethics rules.

A spokesperson for the Treasury Department told ABC News that the department has a long history of bringing the expertise of Wall Street to the office of Secretary.

"The issues Treasury is working on right now involve financial institutions and the economy broadly. It's entirely appropriate for Secretary Paulson to engage in matters that impact the financial markets broadly," said the spokesperson.

Goldman Sachs bankers are also the number one contributors to the Barack Obama presidential campaign, giving $691,930 to his campaign in this cycle, according to the records.

John McCain's campaign has received substantially less from Goldman Sachs employees, $208,395, although they are, as a group, his fourth largest contributor.

In the 2008 election cycle, Goldman Sachs bankers have come up with $4.8 million in contributions to federal candidates, according to the records. 72 per cent of Goldman's money this year has gone to Democratic candidates and the national party, the majority party in Congress.

Employees of Goldman Sachs are listed as a top contributor to 55 separate members of Congress.

In addition to campaign contributions, Goldman Sachs has spent $13.8 million on lobbying expenses since 1998, when Paulson became co-CEO.

"I think they've found it's a small price to pay relative to the profits they could reap if they controlled how Washington affects their industry, and their company specifically," said Krumholz.

In addition to its connection to Paulson, Goldman Sachs has plenty of other former partners who have significant positions of power.

President Clinton's Treasury Secretary, Bob Rubin worked there for 26 years, rising to co-chairman.

New Jersey Governor John Corzine was at Goldman for 24 years, serving as CEO and chairman for five years before running for the US Senate.

The current White House chief of staff, Josh Bolton, is the former executive director of Legal and Government Affairs for Goldman Sachs International in London.

A spokesperson for Goldman Sachs said the firm doesn't have ready access about their employees' donations going back 20 years, but stated that "all Americans have the First Amendment right to participate in the public process, which includes campaign contributions."

The spokesperson said that Goldman's survival was no way tied to the proposed bailout, "Secretary Paulson's plan is pivotal to the nation and its economy."

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