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Thompson: NJ Should Sever Ties with Goldman Sachs
Amid today’s story regarding Goldman Sachs selling nearly $350 million in highway improvement bonds for New Jersey, but simultaneously suggesting to other investors that they would be wise to purchase insurance from the firm because the bonds might not be repaid, Assemblyman Sam Thompson, R- Monmouth and Middlesex, called for the state to end its business relationship with the firm.
“Today’s news that a supposedly trusted business partner with New Jersey was giving advice to clients that they should consider hedging their bet or guiding different customers to make such an investment casts more than a doubt about the confidence the state can have in doing business with this firm,” stated Thompson, who is a member of the Assembly Appropriations Committee. “Goldman Sachs placed a higher priority on its own interests rather than those of its customer.
There are a many financial institutions that can sell the state’s bonds, who I’m sure won’t put themselves in the position of having a potential conflict of interest, as Goldman Sachs even suggested. We need to end this relationship.”
In Monday’s Star-Ledger it was reported that while Goldman netted $1 million in fees for selling the state’s highway bonds this year, it made a presentation to investors in September that cast doubt on the state’s ability to repay the bonds due to its precarious financial position regarding pensions and health benefits for retired public employees. The story mentioned that a spokesman for the New Jersey State Investment Council, which sets policy for the state’s pension funds, said he was not troubled by the disclosure.
“It is past the time when taxpayers can allow officials to dismiss reports such as today’s with such little concern,” continued Thompson.
“The explanation that these actions were not problematic because “independent” departments within Goldman gave the contrary recommendations is unacceptable. Is it any wonder that the state’s pension plan has lost billions with the attitude exhibited by the Investment Council to brush this aside as not a cause for concern. New Jerseyans need to have faith in the companies with which the state does business. Goldman Sachs no longer fits into that category.”
“Today’s news that a supposedly trusted business partner with New Jersey was giving advice to clients that they should consider hedging their bet or guiding different customers to make such an investment casts more than a doubt about the confidence the state can have in doing business with this firm,” stated Thompson, who is a member of the Assembly Appropriations Committee. “Goldman Sachs placed a higher priority on its own interests rather than those of its customer.
There are a many financial institutions that can sell the state’s bonds, who I’m sure won’t put themselves in the position of having a potential conflict of interest, as Goldman Sachs even suggested. We need to end this relationship.”
In Monday’s Star-Ledger it was reported that while Goldman netted $1 million in fees for selling the state’s highway bonds this year, it made a presentation to investors in September that cast doubt on the state’s ability to repay the bonds due to its precarious financial position regarding pensions and health benefits for retired public employees. The story mentioned that a spokesman for the New Jersey State Investment Council, which sets policy for the state’s pension funds, said he was not troubled by the disclosure.
“It is past the time when taxpayers can allow officials to dismiss reports such as today’s with such little concern,” continued Thompson.
“The explanation that these actions were not problematic because “independent” departments within Goldman gave the contrary recommendations is unacceptable. Is it any wonder that the state’s pension plan has lost billions with the attitude exhibited by the Investment Council to brush this aside as not a cause for concern. New Jerseyans need to have faith in the companies with which the state does business. Goldman Sachs no longer fits into that category.”
posted by Trentonian at
4:27 PM
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