On the other hand, we know that Goldman Sachs contributed mightily to the financial crisis; the following is from a press release regarding the Levin/Coburn Report:
Investment Banks and Structured Finance. Investment banks reviewed by the Subcommittee assembled and sold billions of dollars in mortgage-related investments that flooded financial markets with high-risk assets. They charged $1 to $8 million in fees to construct, underwrite, and market a mortgage-backed security, and $5 to $10 million per CDO. New documents detail how Deutsche Bank helped assembled a $1.1 billion CDO known as Gemstone 7, stood by as it was filled it with low-quality assets that its top CDO trader referred to as "crap" and "pigs," and rushed to sell it "before the market falls off a cliff." Deutsche Bank lost $4.5 billion when the mortgage market collapsed, but would have lost even more if it had not cut its losses by selling CDOs like Gemstone. When Goldman Sachs realized the mortgage market was in decline, it took actions to profit from that decline at the expense of its clients. New documents detail how, in 2007, Goldman's Structured Products Group twice amassed and profited from large net short positions in mortgage related securities. At the same time the firm was betting against the mortgage market as a whole, Goldman assembled and aggressively marketed to its clients poor quality CDOs that it actively bet against by taking large short positions in those transactions. New documents and information detail how Goldman recommended four CDOs, Hudson, Anderson, Timberwolf, and Abacus, to its clients without fully disclosing key information about those products, Goldman's own market views, or its adverse economic interests. For example, in Hudson, Goldman told investors that its interests were "aligned" with theirs when, in fact, Goldman held 100% of the short side of the CDO and had adverse interests to the investors, and described Hudson's assets were "sourced from the Street," when in fact, Goldman had selected and priced the assets without any third party involvement. New documents also reveal that, at one point in May 2007, Goldman Sachs unsuccessfully tried to execute a "short squeeze" in the mortgage market so that Goldman could scoop up short positions at artificially depressed prices and profit as the mortgage market declined. (Read the summary here.)Goldman Sachs has been sending out information supporting its position that it did nothing illegal leading up to the crisis. But don't be fooled. Goldman Sachs tries to get its own way in order to make mountains of money by betting on and playing the market, preferably according to its own rules.
When they are challenged by new laws such as the Dodd-Frank law or new rules like the Volcker Rule both of which are meant to protect the public against predatory practices of banks like Goldman Sachs, Goldman Sachs goes into full lobbying mode. So far this year (2011) they have spent $1.3 million on lobbying expenses. Goldman Sachs doesn't lobby just anyone; they lobby those with the knowledge of how government works. They meet privately with regulators and lawmakers; they employ former Senators and House minority leaders; they use Committee members to learn important information; they rain money on those whom they wish to influence, including President Obama.
In 2010, Michael Paese's lobbying team spent $4.6 million on lobbying the federal government. We must not be confused by Goldman Sachs's grand gestures. GS wants to influence government financial policies and it knows how to do that.
Goldman Sachs flexes its lobbying muscleRead the entire article here
The investment bank has bolstered its Washington presence significantly, turning a low-key lobbying operation into a sophisticated, high-powered enterprise led by a well-connected former congressional staffer, Michael Paese.
By Jim Puzzanghera - Los Angeles Times
. . . .
Now, under Paese, Goldman has developed what a former Senate staffer described as a "very sophisticated" lobbying operation.
Goldman rarely has gone public with its positions — even as federal agencies draft hundreds of rules this year — preferring to let trade groups such as the Securities Industry and Financial Markets Assn. highlight key issues.
The company almost never circulates documents outlining its views, except on the rare occasions its executives testify before Congress.
But by many accounts, Goldman has become an influential, behind-the-scenes player in Washington. Its quiet lobbying, for instance, is widely believed to have helped water down some key provisions of the financial reform law that would directly affect its business.
Those provisions include a broader exemption for the continued use of some unregulated financial derivatives and a weaker ban on so-called proprietary trading — known as the Volcker Rule — to allow Goldman and other banks to invest up to 3% of their capital in hedge funds and private equity funds that have been huge money-makers for the industry.
Several current and former congressional staffers described the company's way of spreading influence but did not want to be quoted for fear of crossing it.
Goldman often sends top officials to Washington to meet privately with lawmakers and regulators. For example, its executives have held 55 separate meetings with staff at the Commodity Futures Trading Commission alone since last summer as the agency works to craft new regulations covering the complex financial derivatives that are Goldman's lifeblood.
The securities industry overall has boosted its spending over the last five years as well. But Goldman's increase far outpaces the industry's. The company had eight in-house lobbyists and 41 outside lobbyists in 2010, compared with five in-house lobbyists and 31 outside lobbyists in 2005, according to the Center for Responsive Politics.