Goldman Sachs, which for years saw no need to play a traditional Washington lobbying game, is deploying former lawmakers and crisis specialists as it tries to tamp down the political firestorm threatening its well-honed brand.
The firm's 12-person government affairs office in Washington is aiding what one person involved called a franchise protection strategy in the wake of a Securities and Exchange Commission fraud suit against the firm this month. Advisers include an ex-House Democratic leader, a chief of staff to President Reagan, President Clinton's SEC chairman and President Obama's first White House counsel, Gregory Craig.
The firm boosted its lobbying expenditures to $1.2 million during the first three months of 2010 from $670,000 during the same period a year earlier. Goldman Sachs' political action committee contributed a total of $290,500 to both parties in March.
In prior years, Goldman Sachs earned the nickname "Government Sachs" because its entree in Washington often was based on its own alumni, who have included Treasury Secretaries Henry Paulson and Robert Rubin. President George W. Bush's Chief of Staff Joshua Bolten worked at Goldman Sachs, as did Jon Corzine, who was a senator and then governor of New Jersey.
Overseeing the Goldman Sachs Washington office is Michael Paese, a former top staffer to House Financial Services Committee Chairman Barney Frank. Frank, in a move that underscores some of the bank's challenges, took the unusual step last year of banning Paese from lobbying the panel on the regulatory overhaul bill, even though he was allowed to under federal law.
Under Paese are Todd Malan, a Republican who was head of a trade association for U.S. subsidiaries of foreign companies, and Kenneth Connolly, who was staff director for the Senate Environment and Public Works Committee.
Other recent hires include: Michael Thompson, a former staff member for Wyoming Republican Sen. Mike Enzi; Joyce Brayboy, who worked for Democratic Rep. Mel Watt of North Carolina; Eric Edwards, Democrat and former aide to a House Financial Services subcommittee; and Joe Wall, a former aide to Vice President Dick Cheney.
While Goldman Sachs uses about a dozen outside firms, its most prominent hired guns included former Democratic House leader Richard Gephardt and Kenneth Duberstein, a Reagan chief of staff.
Gephardt's former chief of staff, Steve Elmendorf, is another one of the bank's primary lobbyists, as are former Democratic Rep. Harold Ford Sr. of Tennessee and Richard Roberts, a former SEC commissioner and chief of staff to Richard Shelby, the top Republican on the Senate banking committee.