Goldman Employees Donated $1 Million to Obama Campaign

U.S. Senate candidate Alexi Giannoulias pushed his Republican opponent in Illinois to give back donations from Goldman Sachs Group Inc. without saying whether President Barack Obama should return almost $1 million that bank employees contributed to his White House bid.

Obama, a political mentor and basketball buddy to Giannoulias, received the money from employees and their family members, making Goldman Sachs second only to the University of California as his biggest single source for donors in 2007 and 2008, according to the Center for Responsive Politics.

Mark Kirk, the congressman competing against Giannoulias for the seat once held by Obama, ranks sixth for donations from Goldman employees, the center’s data shows. The top five are Democratic Congressman Michael McMahon of New York, Republican Senator Richard Shelby of Alabama, and three other New York Democrats: Senator Kirsten Gillibrand, Representative Scott Murphy and Senator Charles Schumer.

“This would be a lot more interesting if Wall Street banks, joined by Mark Kirk, weren’t fighting tooth and nail against the needed reforms the administration is advocating,” Hari Sevugan, Democratic National Committee spokesman, said in a statement.

Photographer: Andrew Harrer/Bloomberg

U.S. President Barack Obama speaks during a news conference at the Nuclear Security Summit at the Washington Convention Center in Washington, D.C., on April 13, 2010. Close

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Photographer: Andrew Harrer/Bloomberg

U.S. President Barack Obama speaks during a news conference at the Nuclear Security Summit at the Washington Convention Center in Washington, D.C., on April 13, 2010.

The Securities and Exchange Commission’s fraud lawsuit against Goldman Sachs has politicians gauging the fallout from taking donations from the bank.

Sevugan didn’t respond to an e-mail query when asked whether Obama plans to return money from Goldman Sachs employees. Jen Psaki, a White House spokeswoman, deferred questions about contributions to the DNC.

‘Tainted’ Contributions

Giannoulias, 34, the Illinois treasurer, criticized Kirk yesterday for taking what he called “tainted” contributions of $21,600 from Goldman Sachs employees.

Kirk, a five-term congressman from Chicago’s northern suburbs, said he wanted to “err on the side of caution” as the SEC case unfolded.

A Goldman Sachs spokesman, Lucas van Praag, declined to comment today on the question of contributions to Obama and other politicians.

Kirk, 50, said that his campaign is still determining how much Goldman Sachs employees donated to him, and that he hasn’t accepted money from the bank’s political action committee.

Goldman Giving

Goldman Sachs and its employees and family members gave $5.9 million to candidates in the 2007-2008 election cycle, the Washington-based center’s data shows. Three-quarters of that went to Democrats, the non-partisan group said.

Giannoulias’s campaign further criticized Kirk today for agreeing to return contributions to his Senate campaign and not the full $54,010 it says Kirk has taken from Goldman employees during his congressional career.

“His artfully worded pledge to return contributions made only in the current cycle offers a fig leaf of ethical propriety, but in reality is nothing more than a typical Washington politician’s trick,” Giannoulias spokesman Matt McGrath said in a statement.

Obama, 48, and Democrats in Congress are proposing the most sweeping financial regulation since the Great Depression. The personal push by the president, who plans to deliver a speech on the subject on April 22 at the Cooper Union in New York, comes as Goldman reported its net income almost doubled in the first quarter.

SEC Suit

The SEC filed a civil suit on April 16 alleging the firm failed to tell investors in a 2007 collateralized debt obligation that hedge fund Paulson & Co., which planned to bet against the CDO, helped select the underlying assets.

Goldman Sachs has denied the SEC’s accusations and Greg Palm, co-general counsel, told analysts on a conference call today that the firm didn’t intentionally mislead anyone.

Wall Street provided three of Obama’s seven biggest sources of contributors for his presidential bid. In 2007 and 2008, Goldman Sachs employees and family members gave him $994,795, Citigroup Inc. $701,290, and JPMorgan Chase & Co. $695,132.

Kathleen Strand, a Giannoulias spokeswoman, declined to provide a yes or no response when asked whether Obama should give money back to Goldman employees.

“Unlike President Obama, Republican Congressman Mark Kirk takes Wall Street money hand over fist and then votes their way every single time, including voting against Wall Street reform,” she said in a statement.

Kirk raised $2.2 million during the first quarter of 2010 and ended the period with more than $3 million in the bank, his campaign said April 7.

Giannoulias Lagging

Giannoulias raised $1.2 million during the first quarter and ended the period with that amount in the bank, his campaign said last week.

The Senate seat in Illinois is held by Democrat Roland Burris, who isn’t seeking a full term. Republicans are trying to take advantage of ethical problems experienced by Illinois Democrats, including a public corruption trial set to begin June 3 for former Governor Rod Blagojevich, who appointed Burris to complete Obama’s term.

A poll by Public Policy Polling released April 6 showed Kirk leading Giannoulias by 37 percent to 33 percent, with 30 percent undecided. The survey of Illinois voters was conducted April 1 to April 5 and has a margin of error of 4 percentage points.

To contact the reporter on this story: John McCormick in Chicago at jmccormick16@bloomberg.net

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