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OpEdNews Op Eds    H2'ed 7/21/09

To what extent do Goldman Sachs and other big banks control Congress, the White House and the stock market?

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"The embattled Goldman Sachs investment banking firm and its employees have spent more than $43 million dollars on lobbying and campaign contributions to cultivate friends and buy influence in Washington, D.C. since 1989, according to an ABC News analysis of campaign finance records compiled by the Center for Responsive Politics."

-- ABC News, September 26, 2008

The Bush administration and now the Obama administration kept secret from us what was being done with AIG. It turns out that the world's biggest insurance company was being used secretly to bail out favored banks like Goldman Sachs, which was Treasury Secretary Paulson's old firm, where he had been CEO. Goldman got the largest amount of money from AIG, nearly $13 billion, and neither the government nor AIG, nor Goldman wanted us to know that. It was only Congressional pressure on AIG that forced that information to surface.

Congress had said to AIG, "We will not give you a single penny more unless we know who received the money." And here's one reason they didn't want us to know: When he was treasury secretary, Hank Paulson went to the banking community to recruit and assemble a "recommendation group" whose purpose was to advise Treasury what they ought to do with AIG -- and he assigned a representative from Goldman Sachs to be a member of that group, even though Goldman Sachs had a big vested stake in the outcome, and even though he, Paulson, had just been CEO of Goldman Sachs before becoming Treasury Secretary. Now throughout most of US history, that would have been the basis for a major scandal. At the very least, someone would have lost their job. But now that big banks so thoroughly control Congress and the White House, it is largely ignored.

And what about the stolen software that Goldman fears could be used to rig the stock market? Bloomberg reported on July 9 of this year that a former computer programmer at Goldman Sachs was arrested on theft charges, for stealing Goldman's secret, rapid-fire, stock-and-commodities-trading software in early June, during his last week at the company. Prosecutors say that the man, Sergey Aleynikov uploaded the program code to an unidentified Web site server in Germany.

It wasn't just Goldman that faced imminent harm if Aleynikov were to be released, Assistant U.S. Attorney Joseph Facciponti told a federal magistrate judge at his July 4 bail hearing in New York. The prosecutor also dropped this bombshell: "The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways."

So what is to prevent Goldman from using this software in the same unfair ways? The government doesn't seem to be worried about that. And why not?

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Several years after receiving my M.A. in social science (interdisciplinary studies) I was an instructor at S.F. State University for a year, but then went back to designing automated machinery, and then tech writing, in Silicon Valley. I've (more...)

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