Whitman's Goldman Sachs ties become issue in California gubernatorial race

The Sacramento BeeApril 28, 2010 

While Congress ripped into investment giant Goldman Sachs executives on Tuesday, the scandal threatened to tear the scab off a political wound in the California governor's race.

Republican front-runner Meg Whitman tried again to put her prior relationship with the bank behind her, telling the Associated Press she regrets taking part in a now-banned stock sale practice involving the firm and that she left its board after 15 months because it "wasn't a good fit."

But her remarks only provided ammunition to political foes seeking to remind voters that Whitman, a former Goldman Sachs board member, has a past with the investment firm now under scrutiny for its role in the national financial crisis.

Steve Smith of the California Labor Federation, which represents a coalition of more than 1,200 unions, said in an e-mail that Whitman's remarks were "dumbfounding" and that while "she'd like to sweep her dealings with Goldman under the rug, the evidence points to a close, lasting relationship that continues to this day."

Sterling Clifford, spokesman for Democratic Attorney General Jerry Brown's gubernatorial campaign, asked, "Does she regret it because it was wrong or because it's become an issue in her race for governor?"

And Jarrod Angen, communications director for Whitman's Republican rival, Insurance Commissioner Steve Poizner, said, "I'm sure there are several convicts that regret their crimes, but it doesn't make them any less guilty."

Whitman hasn't been named in the latest Goldman scandal. Senators are investigating charges that the firm fraudulently profited from betting that subprime mortgage securities would fall in 2007 while also selling those same vehicles as profitable to investors. Still, the new charges have once again drawn attention to Whitman's connection with Wall Street's biggest investment firm.

She sat on Goldman's board from October 2001 to December 2002, a job that paid the equivalent of $475,000 in cash and stock options.

To read the complete article, visit www.sacbee.com.

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