Liz Warren Wants To Know If Goldman Sachs Is Running The Country Instead Of Trump

In an ironic twist, on the day that President Trump announces that former Goldman COO Gary Cohn will be in charge of the "phenomenal" plan that will "massively cut taxes," Senator Elizabeth Warren has written to Goldman's Lloyd Blankfein seeking details on the extent to which the bank's employees were involved in drafting of the recent executive orders on banking and fiduciary regulations. Furthermore directly questions Cohn's willingness to "help middle-class families, and will instead favor Wall Street over Main Street."

In what is clearly a cheap shot aimed at Gary Cohn, Reuters reports Democratic Senators Elizabeth Warren and Tammy Baldwin asked Goldman Sachs Group CEO Lloyd Blankfein for details on "lobbying" activities in the bank related to review of the Dodd-Frank Act and the Obama-era fiduciary rule on financial advice. Blankfein was also asked to detail the profits Goldman would make if these reforms came into effect.  The senators have asked for any communication between the bank's employees and Cohn, Mnuchin, nominee for the SEC chair Jay Clayton and chief strategist Steve Bannon.

"We've had no involvement in the drafting of any executive orders," a Goldman spokesman said on Friday.

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Full Letter to Lloyd Blankfein

Dear Mr. Blankfein,

February 9, 2017
We are writing today regarding the relationship between Goldman, Sachs & Co. ("Goldman Sachs") and Mr. Gary Cohn, became the Director of President Trump's National Economic Council ("NEC") in January 2017. We are concerned that Mr. Cohn- who received an the extraordinary $284 million handout from Goldman Sachs as he left his 25-year career with the firm-will be unable to develop economic policies that will help middle-class families, and will instead favor Wall Street over Main Street. We hope you can provide us with information that will assuage our concerns.

The NEC is responsible for "coordinat[ing] the economic policy-making process with respect to domestic and international economic issues" and "coordinat[ing] economic policy advice to the President." The leader of the NEC must approach economic policy making in an objective manner, paying as much attention to the needs of the middle-class workers that drive our economy as the billionaires that sit at the top. In December 2016, President Trump appointed Mr. Cohn as his NEC Director, promising that he would "craft economic policies that ... create many great new opportunities for Americans who have been struggling. "

Mr. Cohn's close financial ties to Goldman Sachs, however, suggest that he may not be able to fulfill the President's promise. As you know, Mr. Cohn worked at Goldman Sachs for 25 years prior to joining the NEC in January.4 And just four days after President Trump's inauguration, we learned that Mr. Cohn's move to the White House helped him "unlock more than $284 million in pent up bonuses, stock holdings and other investments" in Goldman Sachs, including "$65 million in cash to cover his potential future bonuses at the bank" and "$220 billion of Goldman equity he already held or was awaiting, as well as stakes in company-run investment funds. "

The executive orders released by President Trump on Friday last week raise our concerns about the degree to which Mr. Cohn's advice to President Trump is good for Wall Street, but bad for Americans. Mr. Trump released two executive orders with Mr. Cohn at his side, both from the Wall Street wish list: one promised to roll back Dodd-Frank rules put in place after the 2008 Financial Crisis, and another put in place a process that could eliminate new requirements that investment advisers act in their clients best interests. 6 Mr. Cohn then appeared as "the face" of these efforts, stating that he planned to "attack all aspects of Dodd Frank." Goldman Sachs would be a major beneficiary of these efforts to deregulate the financial industry; the company's stock rose by almost 5%, increasing your company's market capitalization by $4.1 billion - the day of President Trump's announcement.

Last week, we sent a letter to Mr. Cohn requesting that he recuse himself from decisions related to Goldman Sachs during his term as NEC Director.9 As we await his response, we would like to request additional information from you to better understand the relationship between Goldman Sachs and Mr. Cohn. Please provide responses to our requests no later than February 22, 2017:

1. Have individuals employed by Goldman Sachs had any communications with Mr. Cohen related to the Trump Administration executive orders or economic policies since he began his service as Director of the National Economic Council? If so, please provide us with information on who these individuals were, the date, times, and nature of these communications, and any documents related to these communications.

2. Mr. Trump named Mr. Cohn as his chief economic adviser on December 12, 2016. Did individuals employed by Goldman Sachs have any communications with Mr. Cohn related to the Trump Administration executive orders or economic policies during the presidential transition? If so, please provide us with information on who these individuals were, the date, times, and nature of these communications, and any documents related to these communications.

3. Mr. Cohn is not the only Goldman Sachs alumnus in the Trump Administration. Steven Mnuchin, a former Goldman partner, has been nominated to be Treasury Secretary. Dina Powell, who ran Goldman's philanthropic activities, has been named as an Adviser to the President. 11 Goldman has been a client of Jay Clayton, the nominee for SEC Chair, in his practice at Sullivan and Cromwell. And chief strategist Steve Bannon is a former Goldman Sachs investment banker.

Have individuals employed by Goldman Sachs had any communications with these Goldman alumni related to the Trump Admirtistration executive orders or economic policies since they began their service in the Trump Administration? If so, please provide us with information on who these individuals were, the date, times, and nature of these communications, and any documents related to these communications.

4. On February 3, 2017, President Trump signed an executive order directing the Secretary of the Treasury to "report to the President. .. on the extent to which existing laws, ... regulations, guidance, reporting and record-keeping requirements, and other Government policies" inhibit the Administration's "Core" financial principles. The President characterized this order as an attempt to "cut[] a lot out of Dodd-Frank." Dismantling Dodd-Frank would be a financial boon for large banks, including Goldman Sachs.

a. Does Goldman Sachs support the policies in this executive order?
b. What financial benefits does Goldman Sachs expect to gain as the result of the changes in the executive order?
c. Has Goldman Sachs lobbied the Trump administration, or will they do so moving forward, on the policies related to this executive order?

5. Mr. Trump signed a second executive order on February 3, 2017, delaying implementation of the Department of Labor's fiduciary rule, which prohibits financial firms from compensating financial advisers in ways that reward them for making recommendations that are not in their clients' best interest. President Trump's executive order directs the Department of Labor to conduct a redundant "economic and legal analysis" of the rule's impact-potentially halting the consumer-friendly policy that was set to go into effect in April 2017.

a. Does Goldman Sachs support the policies in this executive order?
b. What financial benefits does Goldman Sachs expect to gain as the result of the changes in the executive order?
c. Has Goldman Sachs lobbied the Trump administration, or will they do so moving forward, on the policies related to this executive order?

Thank you for your prompt response to our inquiries. If you have any questions or concerns, please do not hesitate to reach out to Brian Cohen of Senator Warren's staff at 202-224-4543 or Brian Conlan of Senator Baldwin's staff at 202-224-5653.

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We are sure the leftists will be pleased to see this mostly political posturing letter - after Warren's indignance during the week - means she is not giving up playing hardball.

Presumably, we will have to see just how "massive" the middle-class tax cuts are in the coming weeks to judge whether Liz Warren and her posse are missing the point entirely.