On April 11, California Watch and the San Francisco Chronicle combined to report on GOP gubernatorial candidate Meg Whitman’s multiple connections to the Goldman Sachs investment bank – as investor, former corporate director and recipient of insider stock deals and campaign donations.
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Five days later, the Securities and Exchange Commission accused Goldman of fraud for allegedly peddling doomed investments to unsuspecting European banks. Goldman has denied wrongdoing in the case, which centers on investments based on mortgage-backed securities.
As the stories gained traction in California, Whitman’s political opponents – both Republican and Democrat – have begun taking shots at the former eBay CEO for her ties to the embattled investment bank.
In a report Thursday, to which California Watch contributed, the Chronicle suggested that the Goldman issue might be slowing what up to now had seemed an unstoppable campaign.
A Rasmussen poll released Wednesday showed that Whitman had fallen six points behind Democrat Jerry Brown in the expected November match-up. Recent polls had shown Whitman ahead of Brown.
Meanwhile, a national poll by Rasmussen showed that 73 percent of Americans believe it is “somewhat likely” that Goldman was guilty of fraud.
At the same time, internal polls showed that Whitman’s opponent in the Republican primary, Insurance Commissioner Steve Poizner, had cut into her lead by 10 to 20 percentage points, the Chronicle reported. Whitman’s lead had been as much as 50 points in some polls.
For her part, Whitman has declined to comment on her association with Goldman. She left the board in 2002, but has kept part of her $1.2 billion fortune with the New York investment bank, records show. With the candidate silent, her opponents had the debate to themselves.
“Meg Whitman made a fortune with Goldman Sachs at the expense of millions of financially suffering Californians and she’s using Goldman Sachs contributions to lie about Steve Poizner in negative ads," Poizner spokesman Jarrod Agen said. “Californians can’t trust Meg Whitman to rebuild our state when she is entrenched with a company financially invested in California ’s failure.”
Sean Clegg, spokesman for Level the Playing Field, a Democratic independent expenditure group, agreed with the GOP spokesman on the issue.
"Meg Whitman and her cronies at Goldman Sachs let loose the four horsemen of California ’s economic apocalypse — derivatives trading, mortgage-backed securities, greedy executive pay and insider stock deals,” he said. “Whitman should be running for cover, not for public office.”
Responded Whitman spokesman Tucker Bounds: “Attacking a candidate for flimsy ties to a private company is exactly what you would expect from a desperate liberal — and I guess that includes Steve Poizner too.”
The Chronicle report noted another financial connection between Whitman and Goldman – this one involving her family foundation.
The Griffin R. Harsh and Margaret C. Whitman Charitable Foundation is administered by a Goldman Sachs subsidiary, the Ayco Co., records show. Ayco is a New York firm that manages money for wealthy families, according to its website.
The foundation, established by Whitman and her husband, had $48 million in assets at the time of its 2008 tax filing, records show. The foundation’s tax return was signed by an Ayco consultant, John Justice. Last year Justice donated $2,500 to Whitman’s campaign, records show.