Obama denies SEC discussed Goldman Sachs charges with White House before public announcement
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President Obama said on Wednesday that the Securities and Exchange Commission never discussed civil fraud charges against Goldman Sachs with the White House before they were publicly announced.
In an interview with CNBC, Obama was adamant that no conversations had taken place, trying to lay to rest efforts to raise another issue in his administration’s drive to toughen Wall Street rules.
“They’ve never discussed with us anything with respect to the charges that will be brought,” Obama said in the televised interview.
The SEC has accused Goldman Sachs of fraud in connection with an investment vehicle that included undisclosed mortgages expected to fail. A hedge fund, which the SEC says was involved in picking the mortgages, made a $1-billion bet against the investment vehicle which Goldman sold to clients who lost the same amount.
Democrats have seized on the Goldman case, pointing to it as an example of the type of Wall Street excess that their financial overhaul bill is designed to prevent. That bill is being negotiated by Democrats seeking Republican help to bring it to the Senate floor.
Republicans have tried to link Obama to Goldman, citing campaign contributions and the recent appointment of the former White House counsel Gregory Craig to be an advisor to the firm on the SEC charges.
In the CNBC interview, Obama was asked directly about the $1 million in campaign contributions from Goldman and the naming of Craig. The president insisted that neither would have any effect on his efforts to push for an overhaul of financial regulations.
“First of all, I got a lot of money from a lot of people,” Obama said, “the vast majority of the money was from small donors all across the country.
“Anybody who gave me money during the course of my campaign knew that I was on record -- again in 2007 and 2008 -- pushing very strongly that we needed to reform how Wall Street did business. Nobody should be surprised in the position that I am taking now,” he said.
Obama defended his former counsel and denied that Craig would have any influence with the White House on the probe.
“He is one of the top lawyers in country,” Obama said. The president cited what he called the toughest ethics rules on how former employees can act.
“He cannot lobby the White House,” Obama said. ”Once he left, he cannot in any way use his former position to have any influence on us.”
-- Michael Muskal
