Gary Cohn's NEC Has Been Lobbied By Goldman Sachs-Backed Groups
Corporate lobbying groups linked to Goldman Sachs have directly lobbied the White House’s National Economic Council headed by Goldman’s immediate past president Gary Cohn, according to federal records reviewed by International Business Times. Cohn previously pledged to recuse himself from any Goldman-related matter, but there is no indication he recused himself from the matters that the Goldman-linked groups were lobbying his council on.
Along with directly lobbying lawmakers, major corporations often lobby the government through industry trade associations. Those groups marshal the collective political power of whole industries — and can also allow individual companies to shroud their influence-peddling activities under the veneer of a larger organization. In the case of Goldman Sachs, the company itself has not directly lobbied the NEC this year. However, IBT identified at least three groups linked to the bank that lobbied the council in the first half of 2017. Those groups have spent more than $3.6 million on lobbying the government this year.
Cohn, a registered Democrat, had worked at Goldman Sachs since 1990, serving as president from 2009 until he left the investment bank to join the Donald Trump administration. As NEC director, Cohn is Trump’s top economic adviser and coordinates economic policy across the executive branch. Upon Cohn’s appointment to the government job, Goldman Sachs gave him a $285 million payout — a move that prompted former George W. Bush ethics official Richard Painter to declare the investment bank was “playing a game to make this person feel beholden to Goldman Sachs.” The bank has myriad financial interests in the tax, trade, regulatory and infrastructure policies overseen by Cohn’s NEC.
Goldman Sachs CEO Lloyd Blankfein (R) and his colleague Gary Cohn (L), president and COO, attend a speech by U.S. President Barack Obama about new financial regulation at Cooper Union in New York, April 22, 2010. Photo: Reuters
Trump administration officials stated in February that Cohn pledged to recuse himself from all matters “directly involving” Goldman Sachs. The White House confirmed to IBT that Cohn signed the Trump administration's ethics pledge, which bars any Presidential appointee from participating “in any particular matter that is directly and substantially related to my former employer or former clients” for two years. The White House has issued ethics waivers to exempt certain staff from those rules. It has not publicly disclosed any waivers for Cohn.
“The White House takes seriously the need for appointees to resign, recuse and divest where required,” a White House spokesperson told IBT in response to questions about whether Cohn has recused himself from any Goldman-related matters before the NEC. “The White House Counsel's Office works closely with all White House officials to avoid conflicts arising from their former places of employment or investment holdings.”
Ethics experts have said the links between Goldman Sachs, Cohn and groups lobbying Cohn’s council are worrisome.
“Because of the White House’s refusal to provide basic information relating to its ethics program that every other White House of both parties have been willing to put forward, it’s very difficult to fully assess the ethics posture of its members, including Mr. Cohn,” Norm Eisen, a fellow at the Brookings Institute and the Obama administration's first ethics czar, told IBT in May. “I do think it is appropriate to view with extreme skepticism decision making that Mr. Cohn does that may benefit Goldman Sachs.”
The Goldman-linked lobbying groups that have been pressing Cohn’s NEC represent different parts of the financial sector.
For instance, Goldman is a member of the Investment Company Institute, which represents the mutual fund industry. Federal lobbying records show the group spent $20,000 lobbying the Senate, the House, the Treasury Department and the NEC in the second quarter of this year. The group lobbied Cohn’s NEC on tax issues. Goldman has a financial interest in tax policy — and the bank has been directly lobbying other parts of the government on the same set of issues.
Similarly, Goldman is a “premier” member of the Managed Funds Association (MFA), which represents hedge funds and other alternative investment companies. The group spent $40,000 lobbying Congress, the NEC and the White House in the first quarter of 2017. Federal records show MFA lobbied the NEC on policies affecting how the government taxes “carried interest” income raked in by financial executives. Goldman Sachs operates private equity funds whose managers stand to benefit from the lower tax rates assessed on such income, and the Institute for Policy Studies estimates Cohn has benefited from those lower tax rates.
Federal records show the Investment Company Institute and MFA had not lobbied the NEC in recent years — but began lobbying the council when Cohn was appointed to run it.
The Securities Industry and Financial Markets Association (SIFMA) also counts Goldman as a member, and has also been lobbying Cohn’s NEC. The group, which represents a broad swath of the financial industry, lists infrastructure policy as among the issues it lobbied the NEC and other government agencies on. Cohn and the NEC are leading the Trump administration’s infrastructure privatization plan. As IBT previously reported, Goldman Sachs stated in its most recent annual report that it is seeking to take ownership of precisely the kind of public assets that Trump’s infrastructure initiative proposes to privatize.
Two other organizations lobbying Cohn’s NEC have links to Goldman as well:
- Arch Capital Group, which spent $100,000 in the first half of 2017 lobbying the NEC, Congress and the Federal Housing Finance Agency. As an institutional investor, Goldman owns $155 million worth of Arch Capital.
- The U.S. Chamber of Commerce has lobbied the NEC this year. The group doesn’t disclose its membership. However, the New York Times in 2010 reported that Goldman helped fund a Chamber campaign to fight the Obama administration’s efforts to strengthen U.S. financial regulations.
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