The Wall Street Conspiracy
So how did the payoff happen? Forget traditional bribery. These guys didn’t need cash-stuffed envelopes handed over in grimy hotel rooms. That’s as old fashioned as vinyl records and corded phones. Plus, a mere envelope doesn’t hold nearly enough cash to get the attention of the new breed on Wall Street. This payola numbered in the billions of dollars, and was just as sophisticated as the Gucci-clad geniuses who cooked it up. And that’s where the conspiracy comes in.
In a memorable quote, a writer for Rolling Stone magazine named Matt Taibbi called Goldman Sachs “a great vampire squid wrapped around the face of humanity.” He went on to say, “The history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled dry American empire, reads like a Who's Who of Goldman Sachs graduates.” So what’s going on here?
It turns out that Goldman Sachs and the U.S. government are serious lovebirds. The romance is sustained by a revolving door of incredibly highly paid jobs, and incredibly powerful government appointments. Like baseball managers (and sadly, today’s baseball players), they simply cycle from one team to the other.
Meet the gallery of rich, or soon to be rich, rogues:
Robert Rubin, Bill Clinton's former Treasury secretary, spent 26 years at Goldman Sachs, and later became chairman of Citigroup. Which, incidentally, got a $300 billion bailout during the crisis.
Joshua Bolten, Bush’s chief of staff during the bailout. His former employer was Goldman Sachs.
Mark Patterson, current U.S. Treasury chief of staff… and ex-Goldman lobbyist.
And if that wasn’t enough, the heads of the Canadian and Italian national banks are Goldman alums, as is the head of the World Bank, the head of the New York Stock Exchange and the last two heads of the Federal Reserve Bank of New York—which, incidentally, was in charge of overseeing Goldman during the bailout. [Watch Conspiracy Theory with Jesse Ventura on truTV]
But the rogue-in-chief might just be Hank Paulson. He was the Secretary of the Treasury, the guy barking at us incessantly during the crisis. The country was in grave danger, howled Paulson. In order to survive, we had to give huge taxpayer bailouts to the investment banks on Wall Street. Those who gambled and lost were now being rescued by American taxpayers. One of the biggest beneficiaries of this money was Goldman. Paulson’s previous job was—you guessed it—CEO of Goldman Sachs. Just for fun, here’s a brief snapshot (from Truthout.org) of Paulson’s compensation during his time at Goldman:
Paulson was already a billionaire when he left Goldman on June 28, 2006. On his way out the door, the firm awarded him an $18.7 million bonus and $110 million for the nearly 1.2 million restricted company shares and stock-option grants he'd accrued. Government ethics rules forced Paulson and his wife, Wendy, to divest $490.9 million in Goldman common stock and their interests in 43 investment funds. Paulson put at least $375 million in additional assets into a blind trust.
However, the Paulsons didn't sever all their financial ties to Goldman. Wendy Paulson and their son, Henry III, remained trustees of something called the Bobolink Foundation, which the bird-loving couple had launched years earlier to support environmental causes and backed with more than $100 million of Paulson's Goldman stock. The foundation still had $33.5 million invested in Goldman funds 18 months into Paulson's term as Treasury secretary.
Nice work if you can get it. But the conspiracy just gets deeper from here.