Goldman Sachs: Regulation is Good for Others, Not Us. Human Rights Group Lambasts Goldman Sachs Over Russia
Goldman Sachs: Regulation is Good for Others, Not Us.
Goldman Sachs suggests regulation is needed in Russia in order to attract investors to that country. Strange that what is good for others is staunchly lobbied against at home; namely, regulations.
The Human Rights Foundation last week slammed Goldman Sachs for their ongoing relationship with the Russian government, saying the bulge bracket bank was basically aiding and abetting a criminal enterprise.
They argued for Goldman Sachs to cease accepting payments from Russia, payments that go towards helping the bank make Russia look good to potential investors and international rating agencies. Russian officials last month announced that they will pay the Wall Street firm $500,000 over the next three years to help the Putin regime lure foreign cash.
“Goldman Sachs has a reputation for knowing global finance, but it has behaved abhorrently when it comes to human rights and assessing investment risk in Russia,” said HRF president Thor Halvorssen in a press release dated Feb. 6.
“By striking this deal with Vladimir Putin, Goldman Sachs is abetting one of the world’s most corrupt governments that’s been repeatedly cited by independent monitoring groups for ignoring human rights, property rights, and sound corporate governance practices. The Putin government shoots at students, tortures whistleblowers to death, and detains and expropriates its enemies—and Goldman is helping them attract investors. It’s mind-boggling,” the HRF president said.
For its part, Goldman Sachs said in a statement that, “We believe it is in the long term interest of Russia and its people to attract foreign investments; we are pleased to play a role to facilitate this process in making Russia more open to foreign investors.”
Russia ranks 133 out of 176 countries on Transparency International’s Corruption Perceptions Index, alongside Iran and Kazakhstan and below Uganda and Nicaragua. International courts, human rights groups across the political spectrum, and investment analysts have decried the political and economic toll on Russia over recent high profile arrests and even, in some cases, deaths in Russian prisons.
“Why would Goldman Sachs put its credibility on the line and attempt to encourage investors to put their money at risk in Russia when everyone from the smallest entrepreneur to the greatest private equity titan faces the very real chance that they will lose everything given the Putin regime’s abysmal record of midnight raids, commercially inspired arrests, targeted tax probes and outright asset thefts?” Halvorssen said in the release. “Even aggressive and savvy operators like BP, Hewlett-Packard, Ikea, Microsoft and Starbucks have run afoul of Putin and his corrupt regime. How can Goldman be so short-sighted?”
Since Putin reassumed the presidency in May 2012, Russia has prosecuted and jailed members of the punk band Pussy Riot for protesting in front of a church. Putin also cracked down on pro-democracy and foreign non-profits critical of Russian democracy.
“Goldman Sachs’ deal with Putin ranks among the worst examples ever of a company seeking to bolster its profits by laundering the financial reputation of a country led by a corruptly elected despot,” said HRF chairman Garry Kasparov. “It’s appalling that Goldman Sachs sees nothing wrong with defending a regime that has made a farce of the legal system, ignored property rights and murdered and imprisoned brave men and women who have sought to promote economic freedom. Save the obvious moral issues, Goldman Sachs is ignoring its fiduciary responsibility to its shareholders and risking prosecution of its executives and board members under the U.S. Foreign Corruption Practices Act by asking investors to risk their capital in Russia before much-needed reforms are put in place.”
Goldman Sachs says that in its new role it will seek to highlight Russia’s commitment to increasing government transparency. “But the truth is transparency and corruption won’t take hold as long as the regime flouts the rule of law and uses Russia’s financial system as its personal piggy bank,” Kasparov said. “Virtually every NGO warns that the human rights situation in Russia is at its worst since the fall of the Soviet Union over two decades ago. By doing business with Putin, Goldman Sachs is acting as an enemy of free enterprise and economic freedom.”