The top donor to former Massachusetts Gov. Mitt Romney’s presidential campaign, investment banking and securities firm Goldman Sachs, received over $10 billion in emergency lending and bailouts from the Federal Reserve after the 2008 financial meltdown, according to public sources and published reports.
Goldman backed Obama for election in 2008, and the firm, like many Wall Street institutions, is now backing Mitt Romney for president.
Romney has long had a close relationship with Goldman Sachs. In 1999 Romney purchased initial IPO shares in Goldman that netted him $1.1 million in profits when he sold them in 2010. And The New York Times recently reported that “many of the assets in Romney’s blind trust” are managed by Goldman.
Today, Goldman is Romney’s largest donor. And nine of Romney’s top 20 campaign contributors are big Wall Street Banks like Goldman. But Goldman leads all Romney contributors, having donated $357,200 to his campaign, according to the Center for Responsive Politics. And six of those nine top contributors received over $161 billion in taxpayer bailouts, reports ProPublica, the independent, Pulitzer Prize-winning investigative organization.
Goldman doesn’t contribute directly to candidates like Romney, but does so through its employees.
Romney’s ties to Goldman have already become a campaign issue. During Thursday’s CNN debate, former House Speaker Newt Gingrich stated that Romney profited from millions he invested in a Goldman Sachs fund that relied heavily on investments in the mortgage-backed securities linked to the 2008 implosion on Wall Street. Romney said he personally didn’t direct the investment, which he said was made through his trust.
Still, Romney’s close ties with Goldman will continue to nag his campaign.
ProPublica says that the The Goldman Sachs Group, Inc., received over $782 million in emergency lending from the Federal Reserve. On Jan. 17, the investigative site reported that the total of taxpayer bailouts received by Goldman tallied a whopping $10 billion.
The relationship between Goldman and Romney goes far beyond its patronage of his campaign. The firm has reportedly managed significant assets of Romney’s in his blind trust.
Romney’s relationship with Goldman dates back at least to 1999, when he purchased 7,000 shares of Goldman’s initial public offering. The release of those shares was tightly held, and were largely unavailable to ordinary investors.
According to a May 1999 BusinessWeek story, “few of the public shareholders were folks who happened to be lucky enough to snare a few shares.”
One potential political landmine for Romney: Personal financial disclosures from May 2011 indicating he and his family invested millions in a Goldman Sachs fund that invested heavily in mortgage-backed debt obligations.
There have been growing indications that Romney’s ties to Wall Street would be subjected to intense scrutiny in a general election campaign especially the Goldman Sachs fund he invested in that benefited from the housing collapse.
Romney’s disclosure forms show that he invested between $1 and $5 million in the fund, and his wife Ann invested another $1 million plus.
The report is based on Romney’s May 2011 personal financial disclosures, which indicates significant investments in the “Goldman Sachs Strategic Income Fund (institutional class).” Approximately 24.5 percent of that fund is reportedly invested in mortgage-backed obligations.
Romney’s profit taking through his Goldman fund investment remains a sensitive subject in Florida, one of the states hardest hit by the housing meltdown. Romney’s Goldman fund invested in some of the biggest culprits in the housing meltdown, including Bear Stearns, Countrywide, IndyMac and Washington Mutual.
In October, Romney ran into trouble on the foreclosure issue, when suggested the remedy to the turmoil in the real estate market is “don’t try and stop the foreclosure process. Let it run its course and hit the bottom.
On Tuesday, Romney stood before a foreclosed home and promised a small crowd of Floridians that he would encourage financial institutions to help homeowners. But he also partially defended banking institutions’ role in the mortgage crisis.
“In this case, it’s because of the banks,” he said, according to a FoxNews.com report. “Well, the banks aren’t bad people. They’re just overwhelmed.”
By comparison, only one of the top 20 contributors to GOP rival Newt Gingrich’s campaign is a bank: Wells Fargo donated $5,900 to the Gingrich campaign through Sept. 30.
Then-candidate Barack Obama received strong support from Wall Street in the 2008 cycle. But so far this cycle, the only financial institution listed among his top 20 donors is Goldman Sachs. It contributed $50,124 to his re-election campaign.
Analysts say Wall Street’s lackluster financial support for the president’s reelection campaign reflects the pinch they’re feeling on profits due to the Dodd-Frank financial regulations reforms he has championed.
Source: Vision to America