Goldman Sachs will pay $12 million in SEC pay-to-play case

‘Government Sachs’

So many Goldman Sachs executives are former public employees or have taken high-level government jobs that it earned the nickname “Government Sachs.” In December 2010, the firm said Kathleen Brown, its managing director in charge of winning municipal-finance business on the West Coast, would move to a new job in Chicago after her brother, Jerry Brown, won election as California’s next governor.

Morrison engaged in a range of activities for Cahill, including fundraising, drafting speeches, communicating with reporters, approving personnel decisions, and interviewing at least one possible running mate, the SEC said. At the time, Morrison referenced his campaign work while soliciting business in an apparent attempt to curry favor during the selection process, according to the SEC’s order.

In one e-mail disclosed by the SEC, Morrison urged a deputy treasurer in Cahill’s office not to give away underwriting business “willy-nilly.”

“If people aren’t willing to be creative with their support then they shouldn’t expect business,” Morrison said in the e-mail. “This has to be a political decision.”

In addition to his work for Cahill, Morrison also made an indirect cash contribution by giving money to a friend who then wrote a check to the campaign, the SEC said. His contributions created a conflict of interest that Goldman Sachs didn’t disclose in relevant municipal securities offerings.

In another e-mail disclosed by the SEC, Morrison said “I am staying in banking and don’t want a story that says that I am helping Cahill, who is giving me banking business. If that came out, I’m sure I wouldn’t get any more business.”

Bloomberg News

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