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Goldman Sachs lobbyist is Geithner's chief of staff

Discussion in 'BBS Hangout: Debate & Discussion' started by ymc, Apr 5, 2009.

  1. ymc

    ymc Member

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    How come GS grunts are everywhere? :confused:

    http://www.motherjones.com/politics/2009/03/geithner-aide-fought-ceo-pay-reform

    Top Geithner Aide Fought CEO Pay Reform
    As a Goldman Sachs lobbyist, Mark Patterson once worked against a bill to curb executive compensation. The legislation's sponsor: Barack Obama.
    —By David Corn and Jonathan Stein

    —Photo courtesy of flickr user M.V. Jantzen.
    Mar 20, 2009

    On Wednesday afternoon, as President Barack Obama was leaving the White House for a town hall meeting in California, he spoke for 15 minutes to reporters about the AIG controversy. Responding to the rising rage over the $165 million or so in bonuses paid to executives at the bailed-out insurance firm, Obama noted that he was quickly developing policies to prevent future AIG-like catastrophes. And he slammed Wall Street's culture of "excess greed, excess compensation, excess risk taking." To demonstrate that he's committed to battling such greed, the president cited his work in the Senate to rein in executive compensation. Noting that he and Rep. Barney Frank (D-Mass.) had each introduced legislation on this front in 2007, Obama declared that "there were some people who attacked us, saying government has no business doing that."

    One of Obama's opponents at that time was Mark Patterson, a lobbyist then for Goldman Sachs, the investment banking firm, which opposed the Frank-Obama initiative. Yet Patterson is now chief of staff to Treasury Secretary Timothy Geithner, the embattled point man in the Obama administration's endeavor to undo the notorious AIG bonuses. That is, a Washington influence-peddler who worked against Obama's effort to limit excessive corporate pay is now a key member of the Obama administration team that is supposed to contain excessive compensation in the AIG case and in general.


    In 2007, Frank, the chairman of the House financial services committee, introduced H.R. 1257, the Shareholder Vote on Executive Compensation Act. The bill required public companies to allow shareholders to hold nonbinding votes on executive compensation plans. The measure—dubbed "say on pay"—was a modest step, though only one of the few attempts then to address exorbitant salaries. It did not limit pay for corporate managers; the legislation would merely permit shareholders to express their displeasure with compensation packages. Corporations would be free to ignore the outcomes of these symbolic votes. Still, the banking industry opposed the bill. And Goldman Sachs, for which Patterson was a registered lobbyist from September 2005 to April 2008, was no fan of "say on pay." Sachs' chief executive, Lloyd Blankfein, who took home at least $70 million in 2007, has argued that shareholders are "less sophisticated and have less understanding" of compensation issues than corporate board members.

    According to lobbying disclosure forms (PDF), Patterson was one of four Goldman Sachs lobbyists registered to work on HR 1257. How the group tried to influence congressional action on the bill is not revealed in the documents, but given Goldman Sachs' opposition to this reform, Patterson and the others were surely not trying to help the measure pass. (In January, a Treasury official confirmed to the Associated Press that Patterson's lobbying portfolio included this compensation measure.)

    Despite industry opposition, the House approved Frank's bill on a 269-to-134 vote on April 20, 2007. That same day, Obama introduced a version of the legislation in the Senate. The bill, which initially attracted only five cosponsors, was referred to the Senate banking committee. Weeks later, Obama sent a letter to Sen. Chris Dodd (D-Conn.), the chair of that committee, asking him to hold a hearing on the proposed law. Obama wrote:

    I believe public discussion and debate over executive compensation packages would force corporate boards to think twice before signing over millions of dollars to CEOs. Certainly, many CEOs are ably steering their firms and deserve their paychecks. But the rate at which executive pay has grown, as compared to stagnating wages among American workers, is rightfully frustrating shareholders and employees alike, especially given the lackluster performance of many of the companies paying these high salaries.

    Dodd, then running against Obama in the Democratic presidential primaries, apparently was not convinced. He held no hearings on the bill, and the measure met a quiet death in his committee. (Whatever Patterson had done, he could claim a success.) But on the campaign trail last year, Obama repeatedly touted the legislation to show he was serious about corporate reform. At an Indiana press conference in April 2008, he said of the measure, "This isn't just about expressing outrage. It's about changing a system where bad behavior is rewarded—so that we can hold CEOs accountable, and make sure they're acting in a way that's good for their company, good for our economy, and good for America, not just good for themselves."

    As vice president for government relations at Goldman Sachs, Patterson, who had previously been policy director for Sen. Tom Daschle, handled a wide assortment of financial, banking, patent, energy, and insurance issues. He worked on tribal gaming matters. And he was registered to lobby on credit default swaps and carbon trading. Because of his lobbying activities, Patterson did not meet the tight ethics rules Obama adopted to slow down Washington's ever-spinning revolving door. His appointment—which was not subject to Senate confirmation—was questioned by White House reporters and criticized by government reform outfits. But the Obama administration granted Patterson a waiver, and the ex-Goldman Sachs lobbyist was able to join Treasury. (Goldman Sachs has been one of the biggest beneficiaries of the federal rescue of AIG; the fallen insurance firm, which has received $170 billion in funds from the Federal Reserve, has used that money to pay Goldman Sachs $6.8 billion.)

    A spokesperson for Goldman Sachs would not provide any details regarding Patterson's lobbying. And the Treasury Department and the White House each declined to comment on Patterson's past lobbying for Goldman Sachs or his present work for Geithner.

    On Wednesday, while recounting his and Frank's attempts to enact "say on pay" legislation, Obama pointed to their measures as examples of "smart regulations" that enhance "oversight, transparency, accountability." And he remarked, "All we're trying to say is you've got to be accountable to somebody. And it's that measure of accountability that I think is part of what has made America strong, and we have to get back to those kinds of values." But Geithner's right-hand man was not long ago paid well to undermine those values. How Patterson has gone from serving Goldman Sachs to serving the Obama administration is a tale that could use some more transparency.

    UPDATE: After this story was posted, a Treasury Department spokesman issued a comment: "Mark Patterson is in full compliance with the administration’s strict ethics policy, and has recused himself from discussions on this and all other issues he worked on during his time in the private sector." Does this mean that Geithner's chief of staff cannot be involved in conversations and decisions regarding corporate compensation issues, including the AIG bonuses? If so, wouldn't that place Geithner at a disadvantage as he tries to handle such matters? We've asked Treasury for a response to these questions.

    You can follow David Corn's articles and media appearances via Twitter by clicking here.
     
  2. glynch

    glynch Contributing Member

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    Obama should not have put this guy in his administration. Time to seek independence from these types of guys on Wall Street. Wall Street and other industries should be barred from spending money to buy our elections.
     
  3. Refman

    Refman Contributing Member

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    Again, Obama shows that he is a politician not unlike any of the rest. Maybe...just maybe we will all come to this realization at some point.
     
  4. Space Ghost

    Space Ghost Contributing Member

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    But Refman, he's promised change!

    He just never promised it would be for the better or worse
     
  5. glynch

    glynch Contributing Member

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    He is a politician; so is your guy Dubya. That doesn't mean there is no difference. That being said we need to make it so all our politicians are more responsible to the economic interests of the majority and not just the moneyed interests. Economic democracy to the rescue of what is becoming a somewhat endangered political democracy.
     
  6. wakkoman

    wakkoman Contributing Member

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    Question: Why do people constantly bring up Bush when anyone is critical of Obama? Is just being better than Bush enough to validate and justify electing Obama? That isn't exactly the standard I hope people would have for our President.
     
  7. Major

    Major Member

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    So you want people without a financial background in charge of finance? :confused:
     
  8. tulexan

    tulexan Member

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    Who cares? GS for years has been one of the best, if not the best, investment bank in the world. You'll find that many very successful people in the financial services industry spent some time at GS.

    I'm sick of people trying to make GS out to be some nefarious company that is pure evil.
     
  9. BetterThanEver

    BetterThanEver Contributing Member

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    They only do it, because it's the most recent president. It's like how Clinton was always brought up, during Bush's term. It's a comparison on different presidential styles about "current events". They could bring up Nixon, but the world is a far different place compared to then.
     
  10. Refman

    Refman Contributing Member

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    The last few years, I have been pretty critical of Bush. Create all the strawmen you'd like, it still will not change the substance of what I said.

    Yes, it does. Obama will cater to those that will line his pockets. For some odd reason, they will end up being the same people that were lining Bush's pockets. The only thing that will be different is the rhetoric.
     
  11. thumbs

    thumbs Contributing Member

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    This certainly doesn't apply to Congress. Chris Dodd graduated with a bachelor's degree in English literature from Providence College in 1966 and Barney Frank with a degree in political science.from Harvard.

    I don't know to whom glynch was referring -- Geithner or Patterson -- but neither inspires confidence in a great many people, Congress folk included. I know you will disagree because of your man-crush on Geithner. That's why you were so snippy in the other thread. ;)
     
  12. giddyup

    giddyup Contributing Member

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  13. Major

    Major Member

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    Not sure what your point is. Neither of those guys should be running the Treasury Dept either. They are qualified to work the financial laws in Congress - but only with hundreds of hours of testimony and outside input from the people who actually DO know something about finance.
     
  14. basso

    basso Contributing Member
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    Maxine does NOT approve of teh jewboy knights templar...

    <object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/OFvnL3npQgY&hl=en&fs=1"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/OFvnL3npQgY&hl=en&fs=1" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>
     
  15. michecon

    michecon Contributing Member

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  16. pippendagimp

    pippendagimp Member

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    :eek: maybe there's some truth to this book after all:

    http://www.amazon.com/Barack-H-Obama-Unauthorized-Biography/dp/0930852818/ref=cm_cr_pr_product_top

    Product Description
    Written by the author of the legendary 1992 expose of Bush the elder, this book works from a New Deal point of view. Obama is exposed as a foundation operative and agent of Wall Street finance capital, controlled by Zbigniew Brzezinski, George Soros, and Goldman Sachs. Obama's mother was an official of the Ford Foundation, the World Bank, and US AID. By all indications, Obama was identified for future political use by Brzezinski at Columbia in 1981-1983, during Obama's secret lost years.
     
  17. glynch

    glynch Contributing Member

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    Come on. You are not that dumb. There are guys who are not unfamiliar with finance that don't have such a conflict of interest with AIG and Goldman Sachs. How about some finance professors etc. Krugman. Nouriel Roubini. Stiglietz.

    Look their are trillions of tax payer dollars involved. If nothing else it is bad politics to not avoid "the appearance of impropriety" .
     
    #17 glynch, Apr 5, 2009
    Last edited: Apr 5, 2009
  18. ymc

    ymc Member

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    Wow, everyone should read this book! :eek: :cool: :p ;) ;) :D
     
  19. Major

    Major Member

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    Finance professors? Really? No thanks. Finance professors have never dealt in the real world of credit default swaps and all that. I want people who actually have real-world knowledge of what's going on - not just theory.

    Goldman Sachs has some of the brightest financial minds in the world. It was one of the least involved companies in doing really stupid stuff over the last decade and is a very healthy company. Besides that, a substantial majority of people at these companies had nothing to do with the problematic part of the financial system. I have no idea why we wouldn't want those people helping to get us back on track.
     
  20. Major

    Major Member

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    It's even worse politics to tar and feather a bunch of people because you don't like the company they worked for. And even worse is eliminating those highly qualified people and picking much less qualified people in leadership roles during the midst of an extremely difficult and complex crisis.

    Krugman? Roubini? Not just no, but absolutely hell no. Neither of those guys should be anywhere remotely close to any position of power when it comes to the US economy.
     

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