Corporate power, corporate criminality and secret lobbying: Goldman Sachs

It has not been a good couple of weeks for Goldman Sachs.

A report by a bipartisan US Senate Committee  into US investment banks has recommended criminal charges be bought against Goldman Sachs . Goldman Sachs and other Wall St firms were described by the Senate Report  as a "financial snake pit rife with greed, conflicts of interest, and wrongdoing." 

Goldman Sachs, the nation's fifth-largest bank by assets, systematically misled clients, sold them financial instruments it knew to be junk, bet against them and profited off of their losses, according to a Senate report released this week.

The report, the product of a two-year investigation, paints the firm as Exhibit A of Wall Street's evolution from a place that raises and deploys capital to worthy businesses into a vulturous creature that preys on unwitting investors.

Goldman's conduct in the two years leading up to the near-implosion of the financial system show a firm dedicated to "sticking it to their own clients," said Senator Carl Levin, a Michigan Democrat who chairs the panel that produced the report. "Goldman gained at the expense of their clients, and used abusive practices to do it."

In the UK a  report published  by SpinWatch UK  exposes  Goldman Sachs political and financial lobbying muscle in the UK and Brussels (The European Parliament).

The report, entitled, Doing God’s Work: How Goldman Sachs Rigs the Game details Goldman Sachs’ secret lobbying activities in the UK and Brussels and links to politicians. It exposes:

• The extensive links between Goldman Sachs and the Conservative Party;
•   Political donations totalling £8.5million to British politicians in the past decade from Goldman and ex-Goldman people;
•    Goldman Sachs’ immense lobbying machine in Brussels, including active membership of over a dozen financial sector lobby groups;
•    Extensive meetings between Goldman Sachs and Conservative MEPs including: 9 meetings in six months with a key MEP on the Parliament’s Economics and Monetary Committee; and a total of 36 meetings between just four Tory MEPs and Goldman Sachs, its lobby groups or PR companies acting on their behalf;
•   The bank’s lobbying campaign to undermine political reform on derivatives and alternative investment funds including: private dinners and unminuted "after office hours” meetings, high-level conferences and targeted campaigns to Commission officials, MEPs and their assistants;
•   How Goldman Sach’s lobbyists tried to undermine amendments in a key report on derivatives, seen as “financial weapons of mass destruction”; 
•   The bank’s lobbying enabled them to gamble on food futures and drive up prices.

Report author, journalist Andy Rowell said: “A year ago, David Cameron said that lobbying was the next big scandal waiting to happen. This report shows that banks like Goldman Sachs – who are intricately connected to the Tories – continue to lobby to get what they want."

Rowell continued: "The entire regulatory process - and the lobbying activity that surrounds it - has to become significantly more transparent and accountable. If it is allowed to be captured by bankers, the next financial crisis will only be a matter of time.”

This is what privatization delivers: systemic crises in immigration detention

photo courtesy of the ABC

So another privatized detention centre burns. Only weeks after the Christmas Island detention centres erupted in protests, riots and fires, the unrest has spread to Sydney's Villawood Detention Centre.

Former staff of Serco, the UK multinational corporation that runs the privatized detention centres, are already pointing the finger directly at the corporation, claiming that it contributed to the crises. Serco whistle blowers claim that at Villawood (like Christmas Island), Serco's incompetence and mismanagement were a primary cause of the riots.

The whitleblower claims that:

• Serco management threw raw and untrained recruits into the detention centre without proper training
• Training courses for new staff were dropped
• Serco staff lack basic training and are forced to learn "on the job" 
• Serco management constantly understaff the centre
• Serco has no effective emergency management procedures for such events.

These are precisely the claims made against Serco at Christmas Island; claims that are now the subject of multiple investigations into Serco's management of the Christmas Island Centres, and it looks likely that the investigations will be extended to include Serco's management of Villawood.

The ABC reports that:

The detention centre was set on fire, while asylum seekers overwhelmed staff from the detention centre service provider, Serco.

The former guard says there would have been 11 staff members rostered on the night the asylum seekers rioted. 

He says his former employer, Serco, does not train staff properly and would not have known what to do when trouble starts. 

"From what I've seen, new recruits are basically put on the floor with no training whatsoever," he said. 

"They were told that they would be trained as they worked and that also has never happened before. Basically what is supposed to happen is, they go through at least a six-week minimum course and then have a year of on-the-job training. 

"Serco basically got rid of the six-week course using staffing levels as an excuse and basically threw the staff onto the floor and expected experienced staff to train them as well as do their normal jobs."

He says Serco has never emphasised emergency response training for incidents like fire and riots experienced on Wednesday night. 

"I am led to believe they still don't have any real effective emergency operational procedures. So basically (Wednesday night) would have been every man for themselves," he said.

In a statement, Serco acknowledged an increased number of arrivals and longer periods of detention have placed significant pressures on their operations. 

The company said its staff training program meets it contractual requirements and that it has provided additional training beyond what is contracted and has invested $1.5 million in staff training.

This is the second Australian immigration detention to be set on fire this year. Riots at the Christmas Island detention centre in March led to tear gas and bean bag rounds being fired at asylum seekers.

The former Villawood guard says the Federal Government should review Serco's contract. 

"They've had pretty poor performance. Basically the spate of incidents, major incidents, under Serco's control have been ... there's just been too many. So I really think that the contract should be reassessed," he said.