Goldman Bullies Teeny Credit Union that #OccupyWallStreet Uses

I suppose there is no point in being part of the 1% unless you can throw your weight around.

Greg Palast writes in the Guardian of how Goldman took a wee bit of revenge on Occupy Wall Street via the itty bitty credit union ($30 million in assets) that OWS chose for its bank account, Peoples Bank. Peoples has “a unique Federal charter”. It focuses on low income customers, meaning families with less than $38,000 in income (to get to how far that goes in the rest of the US ex maybe San Francisco, reduce that amount by at least 30%).

Goldman had donated $5,000 as a sponsor of a 25th anniversary party for the bank. So far, so good, until someone at Goldman gets wind of the fact that the invitations include its name along with that of other donors, as well as the honoree: Occupy Wall Street. Now to Palast:

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.

Yves here. Yes, sports fans. When Goldman became a bank during the crisis, it became subject to CRA. Back to Palast:

Problem: Goldman has, it seems, no low-income customers, nor a “community”. Goldman was directed to find poor people and a community and hand over some cash.

So Goldman looked down from its riverfront tower in lower Manhattan and discovered Peoples. Over 80% of Peoples member-owners have low incomes. At least 65% are Latino.

Yves again. So Goldman got a twofer with Peoples. At least prior to the OWS association, it thought it was satisfying some pesky regulatory requirements and buying some cheap PR. Back to the article:

Goldman did draw the line. And other bankers are stepping back across it, too. Capital One also pulled its name off the dinner invites.

Goldman has so far only passed out its legally-required CRA funds with an eye-dropper: the $5,000 for Peoples (now withdrawn), and a few other dabs here and there. The big cash investments from the Goldman fund are dangling, hoping to lure only those community banks and low-income funds that will dance to Goldman’s tune. My sources told me that Goldman’s “Urban Investment Group” representative had stated in a phone conversation that Occupy’s credit union will never get another dime from any big bank, but, again, Goldman refused to speak with me to confirm or deny this.

Peoples’ [Chairman} Del Rio dismisses such threats, but I don’t. These Community Reinvestment funds ultimately come from public pockets, so why should the titans of Wall Street be allowed to bully community credit unions, which are answerable to their members, not Goldman’s partners?

This low grade thuggish behavior over a mere $5,000 illustrates how deeply narcissistic Wall Street has become. Anything that threatens their image, no matter how small, must be beaten back. Goldman could have been punitive (by threatening never to do anything for the bank ever again) without going to the ridiculous step of threatening litigation over a charitable contribution. How charitable is it, exactly, when you try to attach retroactive conditions?

Unfortunately, I doubt this heavy-handed move will backfire to the degree that its efforts to shut down the website Goldman666 did. But they deserve ample ridicule over this boneheaded and abusive ploy.

Print Friendly
Tweet about this on Twitter252Digg thisShare on Reddit1Share on StumbleUpon130Share on Facebook0Share on LinkedIn8Share on Google+7Buffer this pageEmail this to someone

84 comments

    1. Yves Smith Post author

      They may be doing that, but if Goldman sues, which it threatened to do, it will cost them at least $10,000 and potentially a lot more if they get a bank friendly judge to make it go away.

      1. draghkhar

        Threatening to sue over a charitable contribution sounds like a bluff to me. Goldman would spend a lot more in legal fees than they’d gain in recouping $5,000 (what is that, maybe half an hour’s pay for some of their c-suite executives?). If Goldman went ahead and did it, it’d be great publicity for OccupyWallStreet. In that case, perhaps the bank should create a legal defense fund? I imagine that if enough people heard about it, they’d have enough money in no time.

        1. aet

          The “gift” which wasn’t really a gift at all…as GS still controlled it – after purportedly “giving it away”!

          There’s an old (and racist) American term which characterizes that kind of action, as being the conduct of somebody too ignorant to understand the nature of property, and thus failing to understand precisely what “to give a gift” actually means.

          1. Shawn

            “Niggardly” is not racist. It’s a perfectly good English word, tarred with a PC brush by illiterates.

            At least, I assume this is the word you’re referring to.

          2. ambrit

            Dear Shawn;
            I mised that one. I had thought of Native American Giver. (We know a few indigenes. Blood type A. Unless of course, you’re following the big controversy about the Kennewick Man.)

          3. Jan Martin

            I think he means “Indian giver”, a pejorative white expression about Native Americans. Not nice.

          4. Jack Parsons

            Young americans are strikingly ignorant in re: their great, rich heritage of racial epithets.

            Niggard is a scandahoovian word meaning miser, not thief.

          5. Nathanael

            Jack Parsons: isn’t it nice how young people don’t know all the horrible old bigoted epithets?

            I immediately thought of another one: Goldman “welshed” on its offer.

        2. Jane

          What standing would Goldman have for suing?

          Time to write a few letters to the Vampire Squid!

          The ‘OccupyTheBoardroom’ site has set up a way to send an email to Wall Street execs.

          Please take a moment to write to your favorite bankster:

          http://www.occupytheboardroom.org/

        3. Yves Smith Post author

          1. $50,000 is couch lint to Goldman, This (to them) is about their brand name and being made to look foolish by Little People

          2. It will probably cost them close to nothing. They spend so much in legal fees that they can get a bit firm to put a junior person on this and they will either get a super discounted rate or the fee will be waived.

          1. Gary Anderson

            Lol, I can’t imagine Goldman Sachs having any reputation left. Now bullying a little credit union just adds to their already ruined reputation. And the funny thing is that they must have the most horrible PR department on the planet to be doing this to a little credit union.

            So, I think it is less about PR and more about the impulse to use power. The SEC charges forever damaged their repution.

            Vampire Squid is solid part of the English language and it only applies to GS.

          2. S. D. Jeffries

            Goldman Sachs does not rely on good PR with regular folks for their income; they don’t give a damn what people think of them except for those who occupy the same rarified air – and those aren’t the people who have accounts in credit unions.

    1. Jim Haygood

      Seconded!

      After the waiting period to become a bank was waived on their behalf in 2008, Goldman Sachs and Morgan Stanley made some pro forma noises about expanding their retail banking outreach.

      But compared to the flood of advertising and direct mail from banks seeking retail deposits, try to find ANY offers or account applications from GS and MS.

      Can you imagine the horrified, icy stares you’d get if you walked into their office in street clothes and asked, ‘Hi, do you offer a no-fee checking account?’ The response would be a frosty ‘I don’t believe we know you. Now the security guard will escort you to the door.’

      It’s a ridiculous fiction that these investment banks are or ever were public deposit takers … even as they avail themselves of unlimited zero percent free money from the Fed.

      But not a peep is heard from the bipartisan Depublicrat Congress about this scandalous exploitation of quasi-public subsidies. Wouldn’t be good for campaign donations, you know.

    2. ambrit

      Dear Greg R;
      Wait a bit and watch the Eurocrats wave thier golden CDS wands, sort of like Klingsor, and wipe out not only Golden Sacks, but all the rest of the TBTF banks too. No Castle of Maidens for this lot!

    3. Nathanael

      New question. What are the penalties for Goldman Sachs violating the CRA by failing to actually spend any of the federally mandated CRA money?

      And more importantly given our crooked Attorney General of the US, *is there a private cause of action*?

  1. ZeroInMyOnes

    Rather than giving these megabanks huge handouts and tax breaks, and then begging them to show some generosity with a teeny bit of our money, we should just stop giving them the bailouts and breaks in the first place. The heads of these banks are disgustingly high-paid government workers who are insubordinate to their employer’s requests? Our government needs to let these bank heads go, and send them back to the private sector.

  2. skippy

    Sorry to start this thread off in such a thuggish manner, but, push come to shove (whose bloody fault is it any way)…when is the fooking BBQ start! I mean malfeasance slow cooked over an open fire…all the negative human poetical dripping off the carcass… rendering sweetness?

    Skippy..utility? see: glazed apathetic leash, introductory merdochian adverts juxtaposition is so sweet!

    http://www.youtube.com/watch?v=3M9ncAkKSNM&feature=BFa&list=AVGxdCwVVULXdPCWpXF7P5mFuf25zRyTN9&lf=list_related

    Yves may I have this dance{?] wearing black.

      1. Skippy

        I think the problem with Malthus was…he never meet a sufficiently crazed but_successful_used car salesman.

        Skippy… America… just a nation of two hundred million used car salesmen with all the money we need to buy guns and no qualms about killing anybody else in the world who tries to make us uncomfortable. — Hunter T.

          1. Skippy

            K. A.—— Sorry for not attaching quotation marks around Hunters analogy. Although with the increase in population you rightly rectify, adjusted for time differential, things must have improved.

            Skippy…more is always better…eh…facebook, linkin, personal image seminars, networking, etc. America and other places its media gets it teeth into…is…becoming one BIG never ending media reality TV ad…sigh!

  3. craazyman

    Just when you think they can’t go any lower, they do.

    I can grant them the removal of their name, all right. But the legal threat and the confiscation of the $5000. Five thousand dollars for the Big Squid! I mean really. After the billions of their loot they saved by turning into a bank.

    How utterly pathetic.

    1. lordkoos

      Not just greedy, but unbelievably petty. It is telling that GS (and I assume other Wall St firms) are stung by the protests to the point where they bother with this sort of crap.

  4. Woodrow Wilson

    Still long on rope & lampposts, especially for the politicians that enable this crap.

    Can’t wait for all my fellow battle hardened Veterans realize how used and screwed they were by TPTB. That Wall Street money being thrown around to buy police and private merc companies won’t mean squat.

    This has to end someday.

    1. Jugo1502

      @W. Wilson

      “Can’t wait for all my fellow battle hardened Veterans to realize how used and screwed they were by TPTB. That Wall Street money being thrown around to buy police and private merc companies won’t mean squat…This has to end someday”

      A couple thousand ‘speed bumps’ from Xe Defense Services LLC will be the least of our tasks.

    2. another

      “Still long on rope & lampposts, especially for the politicians that enable this crap.”

      Ah! Ça ira, ça ira, ça ira!

        1. another

          Already cashed out. Time for those individuals in charge to be held to account and cashiered.

          On les pendra!

  5. TGIF!

    I was going to argue that GS demanding their money back was good news because it indicates stupidity or mischievous dissent in their ranks. But then it’s probably a deliberate signal that GS will indeed stop at nothing. That’s what bullies do, anyway.

  6. rd

    I hereby grant Goldman Sachs the right and ability to fail. Be it resolved that Goldman Sachs is no longer a mere utility (bank) but will be allowed once again to free itself of the shackles of bureaucratic nincompoops by ceasing to be a “bank.”

    Be it also resolved that it will not be permitted to reconform itself into a “bank” the next time they help pack the Wall Street money vaults with dynamite and light the fuse.

    I am not against capitalists. I am only against capitalists who are not permitted to fail or who ignore fundamental laws and regulations.

      1. skippy

        Seafood…gone bad….is a dish best relegated to the tip…methinks.

        Skippy.. conversely you can have the first bite. I’ll give it an hour or so, then bite the zombie corpse, lots of wasabi for me please.

        1. ambrit

          Dear skippy;
          Ah ha! A triple pun!
          “Seafood … gone bad… is a dish best relegated to the tip..”
          Which tip? (1) Tip: Commonwealth term for a landfill. (Obvious.) (2) Tip: Term for a gratuity. (What a smelly ‘thank you!’) (3) Tip: Sexual innuendo. [Sic] (As an added bonus. From Caned Tuna: “What’s that smell like fish pretty baby, I’d really like to know…” Keep on Truckin Momma.)

          1. ambrit

            Dear skippy;
            Yes indeed. I’d forgotten how people used to approach corruption. Years since I’d seen this one. Well worth another look see. Making popcorn now.
            Now I want to see “Wall Street Confidential.” (Script by Gore Vidal, directed by Jane Campion?) Or even, “Night and the City.” (All about the London Underground. Wait, didn’t Gaiman do something similar?)

  7. sleepy

    Hard to believe–and frightening as well–that these guys are as bad at running a gazillion dollar banking business as they are at PR.

    If Goldman had any sense at all it would have just ignored the whole thing with a big dollop of noblesse oblige.

    1. ReaderOfTeaLeaves

      Truly, I don’t get it.
      From a business perspective, you write off $5,000 and move on.
      GS is losing it.

      1. JTFaraday

        It says that in the back of their reptilian pea brains somewhere, the thugs know they’re in deep sh**.

        1. readerOfTeaLeaves

          That’s the way I see it.
          I can understand writing off the $5,000 as a loss and biting your tongue and rueing that you’re not happy about something.
          I don’t get making an ass of yourself over it.

          Do these fools at GS not understand the meaning of ‘blowback’?
          Looks to me like they’ve just blown $5,000 of what could have been ‘goodwill’ (however hypocritical and grudging) into at least a $500,000 PR fiasco.
          The sheer stupidity of this GS’s behavior amazes.
          They’re throwing a shit fit and threatening legal action over a mere $5,000?!
          I have to admit, I’m sitting at my keyboard laughing out loud over this one ;-)

          I smell fear ;-))
          Mwhaahahahahahah… ;-)

          So, now I have a question: what’s the donation amount required to get Lloyd Blankfein to show up in person and throw a shit fit in the lobby of a little tiny credit union? $10,000? $12,000?
          Too funny… ;-)

  8. Tradingmom

    I’m not so sure that Goldman’s efforts re: goldman666 were unsuccessful. Mike Morgan, the site’s founder, suffered a severe heart attack brought on in part due to the stress of waging war with Goldman. His health required him to sell/abandon most of his business ventures. The “volunteer” who took over site administration at Goldman666 has also had a heart attack. These guys don’t let up.

  9. Hank

    Why doesn’t the credit union just get a rubber stamp that
    say’s “DONATION WITHDRAWN” and stamp it over Goldman’s name on the paper invites, put a bar through their name on the website listing of donors and put an asterisk next to their crossed out name there saying “donation withdrawn”?

    Here’s an invitation that is being sent to all my family and their friends in support of Occupy Wall Street and for the greater good of our society.

    “Dear Family and Friends,

    Here’s what we are doing to help our fellow countrymen in this hour of need.

    Make it a hard and fast rule that you never ever pay one cent for any financial transaction or convenience relative to spending your money.

    You are of course spending your cash or checks in mom and pop and small businesses aren’t you?

    Look for a free checking account at a credit union and use only cash or checks instead of debit or credit cards. Why? Because merchants only get .94 to .96 cents back for every dollar you spend with a credit card. Banks make up to .40 cents every time you swipe a debit card.

    Use credit cards to pay your utilities, buy gas and deal with big corporations.

    Get rid of credit cards that charge an annual fee.”

    1. JCC

      Excellent idea. Walter Taylor used this trick during his lost battle over the use of his name on Bully Hill Winery Labels against R.J. Reynolds and their purchase of Taylor Wines (late 1970’s)

      He left his name on all his labels but “magic markered” the name in such a way that the Courts said “no problem here” but his name was still easily readable.

      His sales tripled within months.

  10. Abelenkpe

    Goldman just really wants to generate good press about themselves. It’s not like they already symbolize all that people hate about wall street or anything.

    1. EH

      Like Blackwater/Xe, I suspect that the purpose is to be a lightning rod that takes attention away from their cohorts.

  11. JohnB

    In protest against our fascist officialdom, I don’t fly, don’t travel, minimum cash balance in checking accnt and keeping my wallet shut!

    1. Jeff

      The Fortune 500 and corporate America in general have done Jack for Americans in the last decade or so.
      Keep them out of your wallet.
      You wouldn’t allow
      a mosquito to suck your blood would you? Come on
      man, it’s just an itty bitty tiny percentage of
      your blood! Why get so upset about it?
      Why allow the vampire squid to lodge in your pocket?

    1. Walter Wit Man

      They could allege some sort of fraud or false inducement . . . they could also allege defamation or false light, maybe. But my initial view is that these claims would be extremely weak.

      There may also be an equitable claim where a court could basically cancel the gift. There may be pseudo-contract claims (I don’t really know how “gift” law relates to contract law), such as trying to void the gift because of a failure of the consideration (being on a list of “respectable” donors which “failed” when OWS was included).

      But I doubt that not informing Goldman about the other donors would constitute fraud or false inducement, etc. And I doubt that it would constitute defamation, etc. All the claims would be weak, imo. The failure of consideration claim would be the best, imo, if it’s a valid claim or if it can be characterized as an “equitable” claim.

      But that may not matter. They probably care less about the chances of success and more about the message it sends to anyone that gets in their way.

      1. Walter Wit Man

        And hey, the OWS organization may hypothetically have a claim against Goldman for an interference with business relations type of tort. The claim would be that Goldman is trying to interfere with the banking relationship between OWS and People’s Bank. The evidence actually seems to support this claim more so than any claim Goldman has against People’s Bank.

    2. Paying Attention Now

      @James Cole

      Goldman would probably have standing to defend unauthorized use of their trademark (or service mark). GOLDMAN SACHS is a registered mark, which gives them exclusive use of the name to market a product or service in a specific market.

      The Goldman charitable donation to a fundraising event was probably technically a “sponsorship.” Listing the firm name on materials and on the website announcement for the dinner would be a customary way to acknowledge all the sponsors.

      When Goldman changed their mind and didn’t want to be associated with another participant at the event they revoked their sponsorship. And it wasn’t about the money. It was then about People’s CU having no right to use the Goldman trademark in “promotional materials” for the event.

      A registered mark must be actively used by the holder to designate a specific product or service that is actually on offer in the market. A holder must challenge unauthorized use of the mark. It’s not just about protecting perceived value of the mark’s brand. Failure to notify an entity of unauthorized use incurs a risk of losing the mark’s registration to some other future unauthorized use.

      The letter threatening legal action if the registered mark was not removed was probably boilerplate and probably took some associate attorney on staff within Goldman’s legal department half an hour to write.

      The irony is that their pre-emptive notice of potential legal action probably did more to associate their trademark WITH the fundraising event than just about any other way they could have withdrawn from it.

  12. Craig

    Here’s the kicker folks.

    The requirement to distribute funds to low income/community development is because that money is part of OUR TARP funds! The $5K ISN’T EVEN THEIR MONEY!!! It’s OUR MONEY.
    They are blackmailing People’s with OUR money!

    As we will all recall, GS became a commercial bank (no longer an investment bank) in order to receive TARP bailout funds, and part of that deal was this distribution, which the story accurately describes as done a measly drop at a time.
    EVERYONE should pull all of their funds out of these humongous banks and toddle on over to your local credit union and bank where YOU are a shareholder.

  13. Craig

    “As you may have read, Goldman took back a $5,000 donation towards an upcoming fundraising dinner due to the credit union’s support of Occupy Wall Street. Palast reports:

    …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 $10bn 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… But there was a catch: Goldman would have to return a chunk of the public’s billions in the form of loans for low-income customers and members of its “community”, as required by the Community Reinvestment Act (CRA) of 1977. Problem: Goldman has, it seems, no low-income customers, nor a “community”. Goldman was directed to find poor people and a community and hand over some cash. So Goldman looked down from its riverfront tower in lower Manhattan and discovered Peoples. Over 80% of Peoples member-owners have low incomes. At least 65% are Latino. For the big money-center banks, the CRA is good deal. They pay some blood money into community banks and offload their low-income customers. Indeed, bank branches catering to the carriage trade often hustle would-be customers from housing projects out the door with an admonition to take their undesirable business to Lower East Side Peoples.”
    http://www.thelodownny.com/leslog/2011/10/report-goldman-les-credit-union-tiff-tied-to-federal-bailout-fiasco.html

  14. kravitz

    I should apply for a position at Goldman’s public relations firm. Whomever is handling them now is obviously crappy and needs to go. Or perhaps their advertising company. The new theme could be ‘Goldman Sachs doesn’t care what happens to you unless you still have enough money to put Goldman Sachs out of business even after Goldman Sachs tries everything in our power to steal it from you.’

  15. F. Beard

    If bankers were not allowed to steal (purchasing power) in the first place then there would be little need for them to “give back to the community”.

  16. steelhead23

    OK, exactly how do I become a member of Peoples Credit Union? I have a GS account I need to close out and I would like to park my cash in an ethical organization.

  17. ebear

    They should just blot out Goldman’s name on the invites with a magic marker…

    I’d volunteer for that job…heh.

    ebear

  18. rosalind

    so what means do the Big Banks have to take down a community bank or credit union?

    as more and more cash moves out of the squid-vaults, seems the petty bastards will orchestrate a headline grabbing failure in one of the institutions We The People are moving our money to to “show us”.

  19. joel3000

    I just emailed Peoples Credit Union to see if there is way to contribute.

    The contact form is here:

    https://www.peoplescu.com/about-contact-us.htm

    They may not realize how lucrative being dissed by GS might be in this environment, specially at 5pm on a Friday!

    They may need a little nudging. I’ll post back here if I hear from them, but I may be offline for a while so don’t wait for me.

  20. zeev...

    this reminds me of how jpchase owns the processing system for the welfare stamps (plastic card) business. a friend of mine called up the phone line to check his balance and i hear the ‘this is your ebt jpmorgan card.
    hahahah

    yea, the banks are trying to benefit off of servicing welfare , welfare food, welfare cheap credit, welfare this and that.

    americans are stupid and fat and distracted by their iphones and their sports and their video games and their recreational drug use, and their focused on spending their free time on rampant consumption. you can blame the ‘system’ and ‘culture’ all you want. but individuals ARE responsible for their behavior and their behavior now is remains indicative that they are not motivated enough yet to accomplish any real changes.

    fighting a powerful enemy requires dedication. the homeless can’t do it. the middle needs to be focussed. and right now, they just aren’t even close to any where near focussed enough.

    poeple need to be hungrier. literally.

    1. Nathanael

      “poeple need to be hungrier. literally.”

      It’s happening. Because the Vampire Squid’s CEO and its fellow kleptocrats — they just *don’t know when to stop*.

      A smart tyrant remembers to feed everyone. These are not smart tyrants.

  21. Ray Phenicie

    All of the larger banking entities show themselves to be bullies and thugs when the pressure is on; any little occurrence will bring out their real personality. Wells Fargo, according to a good friend of mine, turned to stalking him and having paid thugs follow him to and from work when he fell behind on his credit card payments. He has decided to not pay them and as the amount is less than $2000 they have no recourse apparently, or are not choosing, court action. Instead the ‘break your knee caps’ collection agencies are turned loose to literally hound the guy to death.

    1. Gary Anderson

      Awhile back, an article in the NY Times stated that Wells Fargo threatened to do away with the 30 year mortgage if all loans, not just subprime, were not guaranteed by the government. I don’t know if that included high end but it definitely included some prime loans at the middle class level.

      This threat may end up with a repeal of Dodd-Frank, deregulation, and another round of ponzi lending attacks on main street. It is mostly Republicans that are pushing this but Larry Summers probably is as well.

      1. Nathanael

        Eh — who needs 30-year mortgages.

        The standard was 20-year prior to the Great Depression. 30-year was actually a scheme by FDR to reduce people’s payments without reducing the principal amount on the mortgages. I think that won’t work this time, writedowns are going to be needed.

    2. Nathanael

      There are rules about debt collection behavior, both state and federal. Look them up. Wells’s hired harrassers are not only committing crimes (harassment) against your friend, but your friend probably has a civil case against them. (I can’t remember the name of the federal law, but it’s something like the “Fair Debt Collection Act”????). Might be worth reminding them of that.

  22. Bill

    GS at its social-minded best . I would not accept 10c from GS, sucking suckers sucked enough money from the taxpayer , Now ( well not now) they want to donate 5g to a CU – all as a bribe to use their corrupt power . Goldman Sachs get a fooking life !!!!!!!!!!!

Comments are closed.