Investment bank Goldman Sachs has banned its high-ranking employees from contributing money to certain campaigns including that of U.S. Republican presidential candidate Donald Trump, according to a report in Politico.
The online politics magazine said Tuesday that Goldman Sachs had expanded its political restrictions to partners of the firm. It cited an email that was set out last week by the bank telling its employees about its rules on political activities.
Politico said the email from Goldman Sachs stated: “Effective Thursday, September 1, all partners across the firm are considered ‘restricted persons’ as defined by the firm’s Policy on Personal Political Activities in the U.S. As outlined below, restricted persons are prohibited from engaging in political activities and/or making campaign contributions to candidates running for state and local offices, as well as sitting state and local officials running for federal office.”
Goldman then said the policy change was “meant to prevent inadvertently violating pay-to-play rules, particularly the look-back provision, when partners transition into roles covered by these rules. The penalties for failing to comply with these rules can be severe and include fines and a ban on the firm from doing business with government clients in a particular jurisdiction for a period of at least two years.”
The investment bank also went on to say that the policy change was “meant to minimize potential reputational damage caused by any false perception that the firm is attempting to circumvent pay-to-play rules, particularly given partners’ seniority and visibility. All failures to pre-clear political activities as outlined below are taken seriously and violations may result in disciplinary action,” according to Politico.
Pay-to-play schemes involve campaign contributions or other payments made by investment advisers to state and local government officials in an attempt to influence the awarding of lucrative public contracts, according to the U.S. Securities and Exchange Commission. Goldman Sachs was not immediately available for comment when contacted by CNBC.
The email cited by Politico does not mention Trump’s name but the business magazine Fortune said it had obtained a copy of the memo in which Goldman “specifically mentions the Trump-Pence campaign as an example of one Goldman partners can no longer support.”
“Among the type of donations that are banned, according to the memo, are, ‘Any federal candidate who is a sitting state or local official (e.g., governor running for president or vice president, such as the Trump/Pence ticket, or mayor running for Congress), including their Political Action Committees (PACs)’,” Fortune added it its report Tuesday.
Fortune also noted that the rules ban donations to politicians running for state or local offices, as well as donations to state officials who are seeking federal office.
“That makes campaign contributions to the Trump-Pence ticket a no-no. Pence is the current governor of Indiana,” Fortune highlighted.
Democratic presidential candidate Hillary Clinton currently doesn’t hold office and vice presidential candidate Tim Kaine is a U.S. senator and wouldn’t be subject to the rules. – http://www.cnbc.com/