Since winning the Republican primary, Meg Whitman has banked $105,700 more in donations from her old contacts at Goldman Sachs, the powerful and controversial investment bank.
Whitman, the billionaire former CEO of the online auction house eBay, has spent more of her own money on her gubernatorial campaign than any political candidate in U.S. history – $119 million, state records show. That includes $48 million more in checks since the primary.
But she’s also collecting political donations.
Goldman, where Whitman has variously been an investor, a corporate director and a recipient of insider stock deals, has emerged as the GOP candidate’s biggest single outside source of campaign cash, records show.
Through last week, donors with Goldman connections have given Whitman $216,200. Donors associated with the Food 4 Less supermarket chain rank second, at $207,200, according to a California Watch review of state records.
Whitman has strong ties to Goldman. Much of her $1.2 billion fortune is invested in Goldman funds, according to her economic disclosure report. A Goldman subsidiary manages the money in her family foundation.
In 2001 and 2002, she served on Goldman’s board, where she was paid an estimated $475,000. She left the board after she was singled out in a congressional investigation of “spinning,” a now-banned practice in which investment banks allegedly traded access to insider stock deals in exchange for corporate underwriting business.
Goldman is perennially the most profitable of Wall Street investment banks, and over the years many U.S. politicians have regarded an association with the firm as a badge of honor.
But the investment bank faced harsh criticism for its wheeling and dealing in the ramp-up to the 2008 market crash and ensuing world recession. In July, Goldman paid a record $550 million – $350 million to the federal government, $200 million to investors – to settle a Securities and Exchange Commission lawsuit charging that the investment bank had fleeced German banks by selling them doomed investments based on underwater U.S. home loans. Goldman denied wrongdoing.
In April, a report by the San Francisco Chronicle and California Watch on Whitman’s ties to Goldman roiled the GOP primary. Rival Republican Steve Poizner went after Whitman on the issue, charging that she would have a “massive conflict of interest” as governor because Goldman underwrites so much of the state’s debt.
Whitman responded that she was “a Main Street executive, not a Wall Street executive,” and denied impropriety in her association with the investment bank. The race narrowed for a time, but in the end Whitman won easily.
Since the primary, Whitman donors with ties to Goldman have included Gene Sykes of Los Angeles, a Goldman mergers expert, with $25,900; George Lee of Tiburon, a Goldman managing director, with $25,900; and Brad Koenig, now at Meadowbrook Capital, $10,000. While at Goldman, Koenig handled the initial public offering of eBay stock.
Democrat Jerry Brown hasn’t made much of Whitman’s ties to Goldman. His sister, former state treasurer Kathleen Brown, works in the firm's Los Angeles office.
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