Monday, August 13, 2007

I’ve got the gold, man, if you’ve got the sacks

Goldman Sachs is a name that is making it into a lot of transportation news headlines, coupled with words such as “privatization,” “toll roads” and “foreign investors.” Goldman Sachs, of course, is one of the largest investment firms on the planet and numero uno in annual net income compared to investment sector peers.

The firm is playing a big new role in mentoring states on how to wade into the privatization world and snag big money for toll roads.

Land Line Staff Writer Dave Tanner has been reporting on the activities of Goldman Sachs relative to the selling of highways for more than a year. We were discussing the other day how Goldman Sachs has not only established an infrastructure investment arm for clients like Macquarie of Australia and Cintra of Spain, it’s got its own big fund earmarked for investing in highway infrastructure. That fund is growing daily. The Trentonian newspaper reported recently it was up to $3 billion.

Goldman Sachs is masterful at finding a cash-poor state with old bridges and aging roads and hooking it up with foreign buyers with plenty of moolah. The Indiana Toll Road and the Chicago Skyway are both examples of its work.

No doubt, the company is downright nimble when it comes to convincing state and federal government decision-makers that privatizing is the right thing to do.

Of course, in many cases they are preaching to the choir. More Goldman Sachs grads are being shuffled into big government policymaking positions than most big law schools can boast.

Look at New Jersey, for example. Their governor is Jon Corzine, former head of Goldman Sachs. Another Goldman Sachs veteran, Gary Rose, is the governor’s economic growth expert. Last week, news outlets reported that Corzine named former Goldman Sachs colleague Bradley Abelow as his new chief of staff. That’s three in New Jersey’s upper deck of power.

It’s not just New Jersey; honor students from Goldman Sachs School of Finance and Power are everywhere. Other notables who have called Goldman Sachs their employer include Robert Zoellick, who also used to be a U.S. Trade Representative, and was formerly President Bush’s Deputy Secretary of State (2005-2006). Now Zoellick is president of the World Bank.

And then there is Robert Rubin. He was a bigwig at Goldman Sachs until 1992, when he became Secretary of the Treasury for the Clinton administration.

Josh Bolten, current White House chief of staff, was a Goldman Sachs guy, too. He was executive director for legal and government affairs at Goldman Sachs International in London before he got involved in the Bush-Cheney campaign of 2000. Bolten is credited with having helping Dubya in recruiting Henry “Hank” Paulson, former Goldman Sachs, to serve as U.S. Secretary of the Treasury. This was no small catch. Paulson was a powerful CEO of Goldman Sachs.

So if you’re thinking to yourself, “where did this sell-the-infrastructure idea come from, why are the ‘powers that be’ so sold on this, and why aren’t we hearing about other options?” – push this thought a bit further and ask yourself, just who “be” those powers?