Government Sachs: Impudent NY Fed chairman resigns
Earlier this week, the Wall Street Journal blew the whistle on NY Fed chairman Stephen Friedman’s massive Goldman Sachs conflict of interest.
Friedman — former chair of Goldman Sachs — resigned from the NY Fed yesterday, but obstinately insists he did nothing wrong. Friedman is inextricably linked to Obama Treasury Secretary Tim Geithner, who served as NY Fed president and made a waiver request on behalf of Friedman.
Here’s the Friedman resignation letter.
“Government Sachs” dominated the Bush Treasury and continues to dominate the Obama Treasury.
Left-leaning columnist Robert Scheer sums up the outrage — and the lack of more widespread outrage — well:
We are so inured to tales of business corruption that even a devastating exposé in The Wall Street Journal no longer shocks us. The fact that the chairman of the New York Federal Reserve Bank made millions off his secret purchase of Goldman Sachs stock, “in violation of Federal Reserve policy,” as the WSJ put it, at a time when the N.Y. Fed was ostensibly overseeing the antics of the Wall Street firm, has barely registered a blip of outrage.
When N.Y. Fed Chairman Stephen Friedman bought stock in the company that he once headed, and where he still serves as a director, he was already in violation of Federal Reserve policy and was hoping for a waiver to permit him to hold his existing multi-million-dollar stock stash and to remain on the Goldman board. The waiver was requested last October by Timothy Geithner, then the president of the N.Y. Fed and now Treasury secretary. Yet, without having received that waiver, Friedman went ahead in December and purchased 37,300 additional shares. With shares he added in January, after the waiver was granted, he ended up with 98,600 shares in Goldman Sachs, worth a total of $13,330,720 at the close of trading on Monday.
Friedman was in violation of the Fed’s policy because, thanks in part to the urging of Geithner and the N.Y. Fed, Goldman Sachs was allowed to become a bank holding company, making it eligible for government bailout funds (an option that Geithner had denied to Goldman rival Lehman Brothers). But that shift also put Goldman under more rigorous banking regulations that required Friedman as Class C director of the N.Y. Fed, a position in which he ostensibly represents the public instead of the banks who dominate the board, to step down as a Goldman director and divest his holdings. Instead, he stayed on the Goldman board and added additional shares while waiting for the Fed waiver. Nor did he inform the Federal Reserve of his additional purchases last December, and the lawyers for the N.Y. Fed didn’t know about that purchase until the WSJ raised questions in April. Friedman has made a profit of about $3 million on the additional shares.
Where is President Obama to assail greedy, selfish “speculators” now?
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- Stephen Friedman New York FED chairman resigns | Fire Andrea Mitchell!
- Friday, May 8, 2009: Daily Handpicked Headlines :: Daily Uprising :: Join the Conservative Counter-Revolution!
- Rep. Alan Grayson: Who Is Responsible for Monitoring the Losses Incurred by the Federal Reserve? | Hearing Conducted May 12, 2009 (video) « Frugal Café Blog Zone
- Michelle Malkin » Government Sach’s golden profits
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At some point the antics of these clowns stops being funny and turns into scary.
Which brings up an interesting question – is there ANY honor left in our ruling class? Oh, I know there are one or two who profess honor, but by and large, they are like the scribes and Pharisees who disappeared when Jesus said, “Let he who is without sin among you cast the first stone.”
Or, to put it into words that they can understand, they are like cockroaches that scatter as soon as you turn on the light.
Begs the question: “Why would an honest person insist on such a flagrant conflict of interest?” Make a choice. You can’t pitch for the Yankees and bat for the Red Sox in the same game even if you own both teams.
I’m sure he was just waiting for his corner office at Sachs to be renovated for his new job there. This revolving door could be a great ‘green’ energy source…Put an electric generator on it and, voila !
NOTHING they do surprises me any longer. Waiting for Lil Swiss Miss, Leftist Gullible Moron or Chappy to defend them yet again in 3.2.1…
You ever see the T-Shirt with an American flag on it that says:
A people of sheep
Owned by pigs
Led by wolves
??
It’s very popular in nations that hate us. You’ll see kids and adults wearing it. This is their view of us and for the most part they are correct.
This is not what Jefferson, Adams, and Franklin had in mind when they holed up in that hot Philadelphia office, writing the declaration. This is not what Madison had in mind when he architected the constitution.
But it is what it is, and here we are…
Speaking of curious conflicts of interest, does anyone else find it curious that the biggest institutional holder of Citibank stock is Legg Mason funds (Bill Miller)? Legg Mason is owned by Smith Barney who is still owned by Citibank. How much of this recent bank-stock-led market rally can be traced to mutual funds and other entities owned by the TARP banks themselves? I’m not sayin’, I’m just sayin’.
“left-leaning” ????????????????????????????
Robert Scheer became infamous as the nation’s #1 cheerleader for Kim Il-Sung.
If that’s “leaning”, I’d hate to see what “fallen” is.
Am I the only one who notices that no major newspaper or televison network has yet acknowledged that we are not in “the longest recession since World War II”, but in a deepening depression?
I’m pretty certain that any sense of honor, dignity, and honesty in senior government officials exists only among a sub-set of military leaders, very few appointed officials, and is practically non-existent among elected officials.
I’m sure Barney Frank and Chris Dodd will be demanding investigations any time now.
cue crickets…
Leave chappy out of this. His common sense gland has sprouted and we’re encouraging it to grow.
The others: ILMC, edelweiss, and idiot. They will never admit anything is ever wrong with their side. When we see something wrong with our side (amnesty, Larry Craig, bailouts, etc.) we address it immediately. The above mentioned trolls will never find fault in anything anyone in the Obama administration does, no matter how egregious. And if they do, their pride will never allow them to admit it here.
Strange that I have not seen any of the other MSM outlets reporting about it.
No trial; no jail. Lock him in a room for one hour with Martha Stewart. The family can have what’s left.
“My uncle made a fortune in corn… at $10 a gallon.”
- Shemp (CORN ON THE COP, 1934)
Following the lead of the Washington elite, I think that I will start performing the annual vehicle safety check myself. I’m sure it isn’t a conflict of interest to save a little money and inspect my own vehicles.
Oh, and my property assessment…….
WE NEED MORE REGULATION….!!!
Oh, wait…
Everything these guys do is already illegal….
CRIMINAL, in fact….
Which points out the fallacy of regulation. I only provides the illusion of controlling behavior by people who are willing to violate the rules. Often, the guys breaking the rules are the regulators, or the regulators worked with the industry they are now regulating, or they HOPE to work for them in the future.
So, your ordinary American, under the illusion that he/she’s being protected by govt., cedes that activity to them, and goes to complacent sleep.
Nobody protects our interests move avidly than do we. Nobody has anything like our incentives.
I love the way the word “distraction”seems to pop up when the heat is on.
Truth and facts can be so distracting…
EXACTLY RAGS; all this crap is already illegal, but someone has to enforce the laws, and it seems if you contribute huge sums to either party, you become more and more immune to prosecution. perhaps martha stewart was a rich cheapskate who failed to adequately bribe the powers that be in new york and washington d.c.
“Ye shall know the truth….. and the truth will make you sick.”
Cheap:
I, for one, never thought imprisoning Martha was a good use of my tax money, especially as compared to others far more deserving who are walking around with my tax money (and yours and a whole lot of others) in their figurative pockets.
I think Martha was a Spitzer prosecution, and he did several people that way. Some of them were plain old prosecutorial misconduct, IMNHO
Funny how we sent Martha Stewart up the river but Obama wants to set a bunch of Uighur TERRORISTS free to roam the streets of Northern Virginia. Am I missing something here?
Martha was an imminent danger to society, doncha know…
What a piker! Feinstein funeled billions into her hubbies company, yet again, and this poor fool leaves over a few million.
He should have resigned as he simply has no gall!
…and instead of going after thieving b@st@rds like this, lets go after those who kept us safe for the last 8 years, and those who wrote a legal opinion.
I agree. Spitz did a lot of these types of high profile prosecutions like this to make a name for himself. He had ambitions…beyond the occasional hooker.
This whole bailout madness is about bailing out the criminals in and out of government who have lost huge amounts of money on psuedo-legal schemes. It is the largest heist in history.