Great story that should be read in full at its source. Goldman proves that no bank is too small and no insult too fleeting for an arrogant response from the squid.
Mega-bank Goldman Sachs (assets $933 billion), has declared war on one of the smallest banks in New York (assets $30 million), the customer-owned community bank that happens to also be the banker for Friends of Liberty Plaza, Inc, also known as Occupy Wall Street. And you thought Goldman didn't care.
The trouble began three weeks ago when the occupiers suddenly found their donation buckets filling with thousands of dollars, way more than needed for their pizza dinners. Suddenly, the anti-bank protesters needed a bank. Citibank and Chase certainly wouldn't fit. So OWS opened an account at the not-for-profit Lower East Side Peoples Federal Credit Union. Peoples has a unique federal charter - designated to open accounts for low-income folk from all over NewYork, available to those families earning less than $38,000 per year.
Goldman Sachs had also joined up with the Peoples bank. Goldman partners reportedly earn a bit more than $38k per annum, yet Goldman's association so far was limited to giving the credit union $5,000 toward the little bank's 25th anniversary celebration dinner. Goldman's largesse was acknowledged on the dinner invites - along with the night's honoree: Occupy Wall Street.
When a Goldman exec saw its gilded name next to Occupy Wall Street, the financial giant expressed much displeasure. In fact, my sources say, Goldman threatened legal action unless the credit union gave up the $5,000 and reprinted the invite sans the Sachs moniker. Goldman Sachs did not respond to our requests for comment on the affair.
So far, it's a cute story: tiny bank uses Goldman's money to fete some tent-dwellers who are denouncing Sachs as the Giant Vampire Squid.
But there's a lot more at stake in this battle than a $5,000 donation gone wrong. Underneath, it's a battle royal for control of tens of billions of dollars in government mandated "community reinvestment" funds.
In 2008, the US Treasury handed Goldman Sachs a check for $10 billion from the Troubled Asset Recovery Program (Tarp), the bailout funds given to desperate commercial banks. A few eyebrows were raised: Goldman was not desperate, and it certainly was not a commercial bank. Yet - abracadabra! - Secretary of the Treasury Henry Paulson transformed investment bank Goldman into a commercial bank overnight. (Paulson's prior post was chairman of Goldman Sachs. Just saying.)
But there was a catch.