TRANSPARENCY GOLDMAN SACHS STYLE

 

There's no intrigue like old intrigue. And the same goes for cronyism and long established firms.

It turns out Wall Street investment bank Goldman Sachs apparently meets both criteria.

As we've noted before you don't have to look very hard to find Goldman Sachs' tentacles spread around from central bankers to political appointees in high places. The list of current central bankers with former Goldman ties is lush and long

It's a sticky, incestuous financial web they weave. The Goldman alumni club would rival that of most Ivy League knowledge boxes. Here's a quote from today's Financial Times.

Goldman Sachs has admitted in court documents that it used an internship, training, small gifts, occasional travel and entertainment to cement a “strategic partnership” with the Libyan Investment Authority under the former Gaddafi regime.

The bank’s defence to a $1bn lawsuit filed by the LIA in London in January lifts a veil on techniques deployed by the company and other western financial institutions to win and deepen client relationships with the $66bn sovereign wealth fund – techniques that law enforcement agencies in the US are probing as to whether they tipped over into potential bribery.

We love the emphasis on "small gifts."

Goldman argues that none of its actions amounted to improper or unusual influence and that it maintained at all times “an arm’s-length banker and client relationship”, according to its defence filed at London’s High Court last week.

The LIA accused Goldman in January of entertaining former high-level LIA officials in Morocco, the “extensive expenses” of which were paid for using a Goldman credit card.

This is the way the Wall Street Journal characterized Goldman's actions in the case.

The filing marks Goldman's most-extensive public defense yet of its dealings with Libya in the late 2000s, during the brief period between the North African country's opening to western investment and the fall of Col. Moammar Gadhafi. The push by Goldman and other financial firms to pursue deals with Libya's fledgling wealth fund has drawn scrutiny by U.S. securities regulators and federal prosecutors.

The Wall Street Journal reported Thursday that the Securities and Exchange Commission is investigating an internship and other perks it allegedly offered to win LIA business. Some of those allegations, including the internship, had appeared in the LIA's lawsuit.

With all those Goldman ties to the Federal Reserve perhaps we need a new definition for the term transparency.

t. man hatter