Thursday, May 7, 2009

Goldman Sachs: Governing US Economy from Within or Without?


Goldman Sachs has so many former employees in high places within the Obama Administration that several articles have asked whether the company now runs our government. Are there too many people within the government looking out for the interests of Goldman Sachs? (See, for instance, here and here .) In contrast, few are asking an equally important question: Is Goldman Sachs looking out for economic the interests of the US, since it has received a $10 billion taxpayer bailout?

A bylaw amendment pending at the company’s annual shareholder meeting, on Friday, May 8, would help ensure that people in high places within Goldman Sachs give priority to thinking about the company’s impact on the US . The amendment, placed on the proxy by Harrington Investments Inc. (HII), would establish a Board level committee on US economic security.

“This resolution will be the first in the country to call upon the owners of a major financial institution that has received taxpayer bailout funds to create a board committee to pledge support for U.S. economic security,” said John Harrington, President and CEO of HII, “Goldman Sachs has received a $10 billion bailout, $22 billion in bond guarantees, FDIC insurance, and is eligible for cheap money from the Federal Reserve, and all the while denying any responsibility to safeguard our country’s economic future.”

Among other concerns, John Harrington, a life-long human rights advocate, is concerned that Goldman’s $2.6b investment in the Chinese government’s Industrial and Commercial Bank of China (ICBC) will be used to undermine U.S. national security interests. The Chinese communist government’s banks fund weapons and telecommunications research, and China has a history of utilizing its technology to “hack” into U.S. defense and Pentagon computers as well as breach U.S. Department of Defense weapons contractor’s computer systems to collect data and information that may compromise national security.

The same amendment was also filed at Bank of America and Citigroup, but those companies applied for and received permission from the Securities and Exchange Commission to exclude the proposal from the proxy.

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Disclosure note: The author represented HII in the development and defense of the bylaw amendment.


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