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According to the Collins English Dictionary 10th Edition fraud can be defined as: "deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage".[1] In the broadest sense, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud, but there have also been fraudulent "discoveries", e.g. in science, to gain prestige rather than immediate monetary gain
*As defined in Wikipedia

Wednesday, November 3, 2010

Goldman Sachs and Robert Hormats

Occasionally, we list the Goldman Sachs alumni that grace government offices. We have had three posts on just those topics here, here, and here. It might be worthwhile zeroing in on one of the Goldman Sachs guys who is undersecretary of state in the Obama White house--Robert Hormats.

Public Accountability Initiative
July 21, 2009 . . . .
By Kevin Connor - Scribd.

As Goldman exec, Obama nominee played key role in Sudan-linked IPO
Despite human rights concerns, State Department nominee pushed through illegal PetroChina Offering

President Obama's recent nominee for undersecretary of state, Robert Hormats, is another in a long line of Goldman Sachs executives to secure influential posts in government. But his nomination deserves special scrutiny, above and beyond growing concern surrounding the bank's influence in government.

Hormats played a crucial role in a 2000 Goldman Sachs deal that was fervently opposed by religious groups and human rights advocates and later cited by the SEC as an example of illegal market manipulation: the $3 billion initial public offering of PetroChina, a company with ties to Sudan's genocidal regime.

Key facts concerning Hormats's role in the PetroChina IPO:
**With the PetroChina IPO facing significant opposition from human rights advocates, Hormats assured members of the press that no funds from the offering would be used for work in Sudan.
**These statements later proved to be inaccurate and misleading. Several large institutional investors, including Harvard, have since divested from PetroChina, citing human rights concerns.
**The SEC later cited Hormats's remarks as evidence of illegal market tampering, or "market conditioning," in a larger case against Goldman Sachs, which the bank settled for $2 million.

Hormats's role in the PetroChina deal raises serious questions about his fitness to serve in a post that will give him substantial influence over international economic policy and US-China relations.

**Illegal and deceptive financial practices. As a Wall Street executive, Hormats deceived investors and violated SEC rules in order to promote Goldman Sachs' interests in the PetroChina deal. With this record, can he be a credible advocate for sound international economic policy?

**China, Sudan, and human rights. By offering support for the PetroChina deal, Hormats flouted human rights and national security concerns as they pertained to China and Sudan. With this record, can he effectively represent US interests in managing US-China policy?

**Goldman Sachs and conflicts of interest. How will Hormats negotiate the conflicts of interest accrued during his time at Goldman Sachs?

>Read the full article here


Anonymous said...

Advancing Oligarcy: a conversation with James Kwak

According to Kwak and Johnson, when it came to decisions the financial crisis forced upon policymakers, “[Hank] Paulson, [Ben] Bernanke, [Timothy] Geithner, and [Larry] Summers chose the blank check option over and over again. They did the opposite of what the United States had pressed upon emerging market governments in the 1990s.”

But when it comes to issues of economics and finance there is something else at play: once the Democratic and Republican parties started agreeing with each other on all the issues, then, without the traditional left-right, Democratic-Republican axis to use, the media basically decided, well, if they agree then they must be right. Because the typical thing to do is to bring in a Democrat and a Republican to talk about how they disagree on an issue. When it came to Wall Street, when they started to agree on all these issues, I think two things happened. One is that the media, and frankly, Washington, didn’t know how to think about what an opposing view could be in the absence of a Democratic-Republican dichotomy.

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