Goldman Rejects Proposal That Firm Run for Elected Office
Stock Chart for Goldman Sachs Group Inc/The (GS)
Goldman Sachs Group Inc. (GS), the investment bank nicknamed “Government Sachs” because of senior executives who have moved into public posts, won’t be entering politics itself.
A shareholder proposal that the New York-based company run for office instead of funding political campaigns was discarded, according to a letter last month from the Securities and Exchange Commission, which agreed the firm can exclude the measure from its annual meeting.
Harrington Investments Inc. President John Harrington submitted the proposal last year, saying the $6.39 million in 2012 political contributions from the firm’s employees risks doing more harm to its reputation. He said the bank should explore running for office, using a U.S. Supreme Court ruling that corporations have similar political rights to individuals.
“It would be less damaging to the integrity of our political system and our company, for our corporation to directly run for office as a person under federal or state law, than to continue in the current form of political participation,” Harrington wrote in the proposal.
Goldman Sachs said in a letter to the SEC that it “currently has no involvement, never has had any involvement, and has no plans to become involved in the business of running for political office.”
The bank also said that its political action committee is funded by voluntary employee contributions, not shareholder money. The Supreme Court’s 2010 Citizens United ruling gave corporations the same rights as individuals to spend money independently to support candidates.
Harrington Investments provides advisory services for investors “who want their investment portfolios to serve progressive environmental and social objectives while yielding positive long-term returns,” according to its website. The firm expressed its support for Occupy Wall Street protesters.
Two former Goldman Sachs chiefs, Henry Paulson and Robert Rubin, served as U.S. Treasury secretaries after leaving the firm, and another, Jon Corzine, represented New Jersey in the U.S. Senate and as governor. Mark Carney, the incoming Bank of England head, European Central Bank President Mario Draghi and Federal Reserve Bank of New York President William Dudley are among company alumni now setting monetary policy.
Harrington said he will continue to search for ways to bring up the issue of corporate political involvement, as well as the balance of power between shareholders and companies’ management teams and boards of directors.
“It’s too bad we didn’t get it on the ballot, it would have been a good discussion piece,” Harrington said today in a phone interview. “You begin to see a pattern of how much influence corporations have on our political balance, and now it’s so skewed that you figure, ‘Why don’t we have Goldman run for president and JPMorgan Chase run for vice president.’ And that way, they can run the system for real.”
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