Those Goldman boys have the golden touch, as long as they can operate on all sides. Goldman helped take Kinder Morgan private in 2006. Goldman owns 19.1% of Kinder Morgan. Goldman handled Kinder Morganâ€™s IPO in 2011. Goldman represented Kinder Morgan in its acquisition of El Paso Corporation. Goldman also represents El Paso in exploring possible spinoffs of some of its operations.
When all these roles came to light, never fear, dear reader, Goldmanâ€™s two directors on Kinder Morganâ€™s board refused to participate in deliberations. Ah, that oughta do it. Goldman convinced El Paso directors to go for the acquisition by Kinder Morgen, something that would help Goldman’s position as a part owner. Morgan Stanley, hired to advise the El Paso board on the heroic stuff of acquisitions, was not permitted to present alternative strategies to the acquisition, such as spinning off exploration and production. However, Goldman was exploring the possibility of executives of El Paso doing the spin-offs for themselves.
Got that? The shareholders of El Paso did and have filed suit alleging that Goldman had an interest in seeing the acquisition through because it would benefit through its ownership. Goldman indicates that its private equity folks and its investment banking folks are separate and apart and neâ€™re the twain shall meet. that the firmâ€™s position in the transactions was cleared through its conflicts committee, Everyone denies any wrongdoing, and off to court we go.
On the same day that this litigation story appeared there was another story about Goldmanâ€™s CEO, Lloyd Blankfein. Mr. Blankfein has agreed to become the Human Rights Campaignâ€™s first national corporate spokesman. The Human Rights Campaign promotes equal rights for gay, lesbian, and transgender people. In particular, the HRC focuses on same-sex marriage initiatives in and among the states.
Perhaps the Human Rights Campaign should check Goldmanâ€™s and Blankfeinâ€™s involvement with Focus on the Family and other traditional marriage groups. Mr. Blankfein could be doing what Goldman has done well for almost a century: hedging, or playing on both sides just in case your side doesnâ€™t win.