you're reading...
Economics, Governance, Justice & NESARA legal issues, Media, Relations

Goldman Sachs settles “pay-to-play” probes

By Aruna Viswanatha REUTERS

WASHINGTON | Thu Sep 27, 2012 5:11pm EDT

(Reuters) – Goldman Sachs Group Inc will pay more than $14 million to settle federal and state charges after it violated “pay-to-play” rules, in a case involving campaign contributions to former Massachusetts gubernatorial candidate Timothy Cahill.

Neil Morrison, a former vice president in Goldman’s Boston office, worked extensively on Cahill’s 2010 campaign while also soliciting underwriting business from the Massachusetts treasurer’s office, the Securities and Exchange Commission said.

Cahill at the time was Massachusetts state treasurer.

In what the SEC described as its first “pay-to-play” case involving contributions other than cash, Goldman settled without admitting or denying the charges.

The SEC also charged Morrison, and the case against him continues.

Pay-to-play refers to cash or other contributions made to officials to influence the award of lucrative public contracts.

The SEC announced that Goldman will pay about $12 million to settle the SEC’s case. Later Thursday, the Massachusetts attorney general’s office revealed details on its related case, which brings the total settlement to $14.4 million.

The SEC’s complaint describes how Morrison conducted campaign activities for Cahill, including fundraising, drafting speeches, and speaking to reporters, and how some of this work was done from Goldman’s offices during business hours.

During the 13 months through October 2010, Morrison sent at least 364 campaign-related emails using his Goldman Sachs email account.

The campaign work gave Morrison access to Cahill and his staff, who provided him internal information about the underwriter selection process, the SEC said.

Morrison also directly discussed his campaign work in relation to securing business for Goldman Sachs in emails, according to SEC documents.

“From my standpoint as an advisor/consultant/friend, I am saying, PLEASE don’t give these (underwriter) slots away willy-nilly,” Morrison wrote in one email to an official in Cahill’s office. “You are in the fight of your lives and need to reward loyalty and encourage friendship.”

Morrison’s use of Goldman work time and resources for the campaign activities also disqualified Goldman from bidding for municipal underwriting business with certain issuers in the state. But Goldman went on to participate in 30 prohibited underwritings, earning it more than $7.5 million in fees, the SEC said.

A Goldman spokesman, Michael DuVally, said in a statement that the firm had detected Morrison’s activities, fired him, and cooperated with regulators.

“We accept responsibility for the consequences of his unauthorized actions under the terms of the settlements announced today and are pleased to resolve these investigations,” DuVally said.

A lawyer for Morrison did not respond to a request for comment.

The case has drawn Goldman into the legal morass that has surrounded Cahill since he lost his gubernatorial bid to incumbent Deval Patrick.

In April, Cahill was indicted on criminal public corruption charges for allegedly using the state’s taxpayer-funded lottery advertising budget to boost his sagging campaign.

An attorney for Cahill, Jeffrey Denner, said he had not reviewed the SEC documents, and would have no comment since the order did not directly name Cahill as a defendant.

Robert Khuzami, who heads the SEC’s enforcement division, said in a statement: “The “pay-to-play” rules are clear: Municipal finance professionals that use their firm’s resources to campaign on behalf of political candidates compromise themselves and the firms that employ them.”

The SEC has undertaken a broader crackdown of “pay-to-play” practices in recent years. In 2010, it adopted new measures that target activities of investment advisers who seek out contracts to manage public pension plans and other types of investment accounts.

(Additional reporting by Karey Wutkowski; Editing by Bernadette Baum and Sofina Mirza-Reid)



5 thoughts on “Goldman Sachs settles “pay-to-play” probes

  1. So they just get off by paying a fine (using the funds they received in the bailout)!?!?

    Still don’t understand how this is justice…still just business as usual for the elite, fines as a penalty for those who “print” money is an assault on our intelligence!!!


    Posted by John Carter | September 30, 2012, 4:09 pm


  1. Pingback: Goldman Sachs settles “pay-to-play” probes « NESARA AUSTRALIA « firstcontactargentina - October 1, 2012

  2. Pingback: Goldman Sachs settles “pay-to-play” probes « NESARA AUSTRALIA « Wake Up Argentina Earth Allies and Galactic News - October 1, 2012

  3. Pingback: Goldman Sachs settles “pay-to-play” probes « NESARA AUSTRALIA « My Blog - October 1, 2012

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

NAMASTE for your support.

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 92 other followers


%d bloggers like this: