Exposing the Lib-Con hypocrisy over Goldman $achs

The coalition government should be held to account over comments made during the election campaign, calling for Goldman $achs to be barred from Government.

On April 16th the US Securities and Exchange Commission (SEC) charged Goldman Sachs with “defrauding investors” over subprime mortgage securities, and on April 20 the Financial Services Authority (FSA) decided to commence a formal enforcement investigation into Goldman Sachs International in relation to the SEC allegation.

Goldman Sachs allegedly failed to disclose to investors that it was betting against subprime mortgage investments it was selling to clients. Essentially, the accusation was that Goldman pushed a product designed to fail.

In response the Tories and Liberal Democrats said Goldman Sachs should be suspended from working for the Government until the outcome of a fraud case brought against the investment bank is known.

At the time, Nick Clegg, prior to the election, had said:

“We believeGoldman Sachs should now be suspended in its role as one of the advisers to the Government until these allegations are properly looked into.”

A point reiterated by Vince Cable, who said:

“The Government should not be paying for the services of a bank that is being investigated on both sides of the Atlantic. The allegations made against Goldman Sachs are extremely serious. Not a penny of taxpayers’ money should be paid while these allegations hang over [the bank].

The Conservatives echoed the Liberal Democrats’ concern; Mark Hoban, then shadow Financial Secretary to the Treasury, said:

“If Gordon Brown believes Goldman Sachs are ‘morally bankrupt’, why is he still using them as advisers? He is lashing out at the people he was very happy to work with over the last 13 years as both Chancellor and Prime Minister.”

Once in government, however, the Tories and Lib Dems have failed to follow through on their rhetoric: on May 14 Goldman Sachs was hired to sell 40-year index-linked bonds on behalf of the government. Last October, Goldman was paid £3.5 million in commission for its role as a lead manager in a £7 billion gilt deal.

Yesterday it was reported that a proposed bank levy had been omitted from the Queen’s speech. These moves suggest a softening in approach to the big banks from the once vocally populist opposition parties. The coalition government should be held to account over comments made during the election campaign. When vast amounts of government spending is being cut we should ensure (in the words of Vince Cable) that:

“Not a penny of taxpayers’ money should be paid while these allegations hang over [the bank].”

Sign the ‘Sack Sachs’ petition

23 Responses to “Exposing the Lib-Con hypocrisy over Goldman $achs”

  1. Martin Johnston

    Vince Cable continues to let Lib Dem voters down: RT @leftfootfwd: Exposing the Lib-Con hypocrisy over Goldman $achs: http://bit.ly/czHxK1

  2. Kevin McKeever

    RT @shamikdas: Another Clegg/Cable u-turn RT @leftfootfwd: Exposing the #ConDemNation hypocrisy over Goldman $achs: http://bit.ly/czHxK1

  3. Gareth Partington

    RT @leftfootfwd: Exposing the Lib-Con hypocrisy over Goldman $achs: http://bit.ly/czHxK1

  4. Andy Sutherland

    RT @leftfootfwd: Exposing the Lib-Con hypocrisy over Goldman $achs: http://bit.ly/czHxK1

  5. Compass

    RT @leftfootfwd: Exposing the Lib-Con hypocrisy over Goldman $achs: http://bit.ly/czHxK1

  6. Shamik Das

    Another Clegg/Cable u-turn RT @leftfootfwd: Exposing the #ConDemNation hypocrisy over Goldman $achs: http://bit.ly/czHxK1

  7. Chris Jordan

    Business as usual then? RT @leftfootfwd: Exposing the Lib-Con hypocrisy over Goldman $achs http://bit.ly/czHxK1

  8. yorkierosie

    RT @grpartington: RT @leftfootfwd: Exposing the Lib-Con hypocrisy over Goldman $achs: http://bit.ly/czHxK1

  9. Chris Clothier

    Oh dear Left Foot Forward. This is a real low. If I remember rightly the coalition agreement was made on 11 May? By the 14th the new government had barely taken office. They have more important things to sort out than who is mandated on a bond sale. Especially given that Goldman were almost certainly appointed several weeks previously. This is cheap journalism and beneath you.

  10. Shamik Das

    Cable and Clegg’s words speak for themselves. It’s absolutely right for us to pull them up on this.

  11. Steve P

    Two whole weeks in government and they are responsible for payments made in October?

    May the 14th, government was in power for two days.

    Counting isn’t your strong point.

  12. Jacquie Martin

    Whislt it might be true GS were appointed before the coaltion took office, they’ve managed to make some pretty quick changes already e.g. hips suspension. They can sort this with equal speed if they choose to.

  13. Chris Clothier

    Jacquie – Fair point, but I’d be very surprised if, on day two of their new job, they even knew that GS were in the frame to be running an auction for the DMO. HIPs was something they knew was out there and was in their sights.

  14. Joanne Platt

    RT @leftfootfwd: Exposing the Lib-Con hypocrisy over Goldman $achs: http://bit.ly/czHxK1

  15. SadButMadLad

    The GS deal to handle the 40-year bonds takes days if not weeks to arrange. So its only the Treasury carrying on Labour’s instructions. The government have to sell the bonds and for the Tories to jump in at a very late stage (if they knew about it) and re-arrange it would just not be feasible.

  16. Jacquie Martin

    The cynic in me feels they have no will to even try to do anything about it.

    If the bomb explodes they can blame Labour for engaging them (rightly). If GS get away with it, they haven’t upset their banking friends.

    I suspect they’re being pragmatic rather than moral. But then this is politics…

  17. Will Straw

    I agree with Jacquie. Chris makes a fair point that it’s early days in the administration and they can’t be expected to have executed every one of their commitments, but they will have to show some movement on this before too long otherwise Clegg, Cable and Hoban’s words will look a bit empty.

  18. Rashidi Abu Bakhar

    Goldman Sachs are only one bank here. Just look at the behaviour of other banks here, is it not a bit reactionary just to target one? (that is true of Clegg as it is of Compass)

  19. Nadia

    RT @leftfootfwd: Exposing the Lib-Con hypocrisy over Goldman $achs http://bit.ly/czHxK1 – Sign petition to 'sack Sachs' here!

  20. Stewart Owadally

    RT @leftfootfwd: Exposing the Lib-Con hypocrisy over Goldman $achs http://bit.ly/czHxK1

  21. Jane Watkinson

    RT @leftfootfwd: Exposing the Lib-Con hypocrisy over Goldman $achs http://bit.ly/czHxK1

  22. Mark

    RT @JaneWatkinson: RT @leftfootfwd: Exposing the Lib-Con hypocrisy over Goldman $achs http://bit.ly/czHxK1

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