While Meg Whitman was
running riding the gravy train at eBay as CEO, she was also taking kickbacks straight into her pocketbook from Goldman Sachs in return for giving them the company underwriting business. Eventually, GS put her on their board and paid her $475,000 for showing up at a dozen swanky meetings over 15 months. She fled GS when the news broke about their little kickback scheme, and eventually was forced to pay millions in restitution.
Now she wants to be Governor of California, and is promising to keep an arms-length distance from GS, California’s second-largest underwriter. How does she propose to do that? By puting her many millions of dollars invested in GS into a “blind” trust, whic is “blind” only if everyone pretends to not see that funneling more millions to GS, this time from taxpayers instead of stealing from a company, she will only reap her reward from GS after she leaves office. So much more respectable than the last time she whored for them.
The vampire squid spawn known as Meg Whitman
Lance Williams and Carla Marinucci have the details, and it couldn’t be more sordid.
From 1998 to 2002, while she was CEO of eBay, Whitman helped steer millions of dollars of her company’s investment banking business to Goldman, court records show.
In 2001, Goldman put Whitman on its corporate board, paying her an estimated $475,000 for little more than a year of part-time service. The company also gave her insider access to the initial public offerings of hot stocks worth millions, according to the records.
Whitman left the board in 2002 after she was targeted in a congressional probe of bond underwriters and “spinning” — a financial maneuver, now banned, in which Goldman and other firms allegedly traded access to hot IPOs for bond business.
Whitman left the board soon after the IPO “spinning” controversy became public. In October, 2002, Rep. Michael Oxley, R-Ohio, chair of the House Financial Services Committee, identified 21 business executives who he said had obtained IPOs from Goldman and two other firms in exchange for bond business. Oxley called the transactions “corrupt.”
The Executives he named included William Clay Ford of Ford Motor Co., Enron CEO Kenneth Lay, Yahoo founder Jerry Yang – and Whitman.
Goldman denied wrongdoing, but months later, paid $110 million to settle its part of a Securities and Exchange Commission complaint that accused 10 Wall Street firms of misleading customers with biased stock research. As part of that settlement, “spinning” of IPOs was banned, records show.
For her part, Whitman insisted she had done nothing illegal or unethical, saying she was the victim of “the climate of finger pointing and scandal,” that accompanied the bursting of the dot-com bubble. She made a profit of $1.78 million on the IPOs, she told eBay employees. It was “a very small fraction of my investment portfolio,” she wrote in her book.
Nevertheless, two shareholders’ groups sued Whitman and the other eBay insiders, contending that money from flipping the IPOs should have gone to eBay. Eventually, Whitman and the other officials paid about $3 million to eBay to settle the suits. Goldman paid $395,000 of the settlement, she wrote in her book.
During the 2002 IPO “spinning” controversy, Whitman denied wrongdoing, telling eBay employees in a memo that Goldman had offered her stock deals because she was a private client of the firm, not in exchange for eBay’s bond business.
While seeking eBay’s underwriting business, Goldman repeatedly gave Whitman and three other eBay officials the chance to buy IPO stock of other firms Goldman was taking public. Whitman bought more than 100 offerings, according to the judge’s account.
The executives “were able to flip these investments into instant profit,” the judge wrote. “… Whitman sold these equities in the open market and reaped millions of dollars in profit.”
The woman who stole millions from her own company now wants the people of California to trust her as governor, and she might just pull it off. Early days, but she has pulled even in polls with Jerry Brown, the presumed Democratic candidate, after having already spent nearly $50 million of her $1.2 billion personal fortune on non-stop advertising for the Republican primary. Whitman campaign aids have been quoted as saying she plans to spend another $50 million of her own money by November, more if she needs it.
It seems incredible that half of California voters are even willing to consider Whitman, but this is a state that twice has elected addle-brained B-grade movie actors and then re-elected them both even after it was clear they were disasterous, so she may well pull it off. Her primary campaign pledge is to improve employment and balance the budget by cutting “wasteful” (read social services) spending while eliminating state capital gains taxes and the business licensing tax. It is just more trickle-down “voodoo” economic policy, warmed-over Reagan leftover lies that will only benefit the rich, but the number of gullible California voters apparently remains unchanged since Reagan’s day.