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April 22, 2010

What goes around: Greg Craig and President Obama

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An epic battle starring limousine liberals? Greg Craig, the former top lawyer in Obama's White House, will represent Goldman Sachs Group in the surprise SEC fraud action concerning complex mortgage-backed securities that were structured and marketed by Goldman Sachs for one of its hedge fund clients. The SEC complaint alleges that Goldman Sachs failed to disclose that the program of securities it devised "bet against" mortgage securities Goldman was also promoting.

Craig, who recently moved from Williams & Connolly to Skadden, is widely seen as being pushed out of Camp Obama last Fall by pragmatists who didn't like the strict timeline he proposed for closing down Guantanamo Bay's detention facility. And this week the President, although carefully choosing his words, morphed into an anti-Wall Street (and therefore anti-Goldman) mode as he pushed for legislation to more tightly regulate Wall Street firms. Showdown with the old Boss?

It's interesting news. The SEC, an independent Article II agency and quasi-court created by the Article I Congress, it is argued, technically does not work for the Article II White House. So there is apparently no revolving door problem for the steady and mega-charming uber-WASP Greg Craig. Really? True, Craig is a lawyer, not a lobbyist, and the White House is not seen to control much of what the SEC does.

Well, we hope he's not caught in the ethics net because we like watching Craig, a Boomer's Boomer, work.

Craig is a youthful guy in his sixties who won't whine about working past 7:30 PM. We currently have to work with people who will be "stressed" into early retirement by 38. But Craig is one of us. For the first time in decades, WAP? feels like going to church. Or something. Maybe just the Old Ebbitt. See at Politico "Goldman Sachs Taps Ex-White House Counsel". Excerpts:

On Friday, the SEC charged the firm with securities fraud in a convoluted subprime mortgage deal that took place before the collapse of the housing market.

Next week Goldman Sachs CEO Lloyd Blankfein will face questions from the Senate Permanent Subcommittee on Investigations, which is looking into the causes of the housing meltdown, the source said.

In Craig, Goldman Sachs will have help from a lawyer with deep connections in Democratic circles.


And:

"A former White House employee cannot appear before any unit of the Executive Office of the President on behalf of any client for 2 years—one year under federal law and another year under the pledge pursuant to the January 2009 ethics E0," said a White House official.

The official also said that the White House had no contact with the SEC on the Goldman Sachs case. "The SEC by law is an independent agency that does not coordinate with the White House any part of their enforcement actions."

Posted by JD Hull at April 22, 2010 11:38 PM

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