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Goldman Sachs Shouldn’t Work for Russia, Human Rights Group Says

Feb. 6 (Bloomberg) -- Human Rights Foundation, headed by Chairman Garry Kasparov, demanded that Goldman Sachs Group Inc. end a consulting agreement with the Russian government led by President Vladimir Putin.

“Goldman Sachs’s deal with Putin ranks among the worst examples ever of a company seeking to bolster its profits by laundering the financial reputation of a country led by a corruptly elected despot,” Kasparov, the former chess champion and leader of Russia’s Solidarity opposition group, said in a statement. “By doing business with Putin, Goldman Sachs is acting as an enemy of free enterprise and economic freedom.”

”Goldman Sachs, led by Chief Executive Officer Lloyd C. Blankfein, signed a three-year agreement with Russia’s Economy Ministry and the Russian Direct Investment Fund to help set up meetings with investors and better communicate government decisions, according to Sergei Arsenyev, the company’s managing director of investment banking in Moscow. Blankfein, 58, is also a member of Prime Minister Dmitry Medvedev’s advisory committee on turning Moscow into a financial center.

“It is in the long-term interest of Russia and its people to attract foreign investment,” Michael DuVally, a spokesman for New York-based Goldman Sachs, said in an e-mail. “That is why we are pleased to play a role helping to make Russia more open to foreign investors.”

Asset Sales

The world’s largest energy exporter plans to raise a record $10 billion from asset sales this year, First Deputy Prime Minister Igor Shuvalov said in an interview with Bloomberg Television last month. While corruption remains a concern, it’s less so for foreign investors who have already committed to Russia, Shuvalov said.

Led by Putin, 60, Russia ranked 133 out of 176 countries and territories in Transparency International’s 2012 corruption perceptions index, tied with Iran, Kazakhstan and Honduras. The U.S. Congress imposed a visa ban and asset freeze in December on Russian officials allegedly linked to the death of lawyer Sergei Magnitsky and other human-rights abuses. Russia responded with a law that bans U.S. adoptions of Russian children.

Goldman Sachs, the fifth-biggest U.S. bank by assets, conducted a review of its business standards and practices and released a set of recommendations in January 2011 to ensure the standards treat clients fairly and “contribute to overall financial stability and economic opportunity.”

Human Rights Foundation, based in New York, was founded in 2005 to raise awareness about “the vulnerability of freedom around the world,” according to its website.

“It’s appalling that Goldman Sachs sees nothing wrong with defending a regime that has made a farce of the legal system, ignored property rights and murdered and imprisoned brave men and women who have sought to promote economic freedom,” Kasparov said in the statement.

To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net

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