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Brown and Whitman fight over ties to Goldman Sachs, but offer no details on California pension crisis

by Bob Morris, published

A Rasmussen poll released last week showed Brown now in the lead over Whitman, 44%-38%, with 9% undecided and 9% preferring others. A month ago, they were tied.  Brown has a narrow lead among male voters statewide and a slight edge with female voters. Brown’s actual numbers haven’t changed much, but Whitman negatives are up due to the heated Republican primary.

In a sure sign of the changing fortunes of Goldman Sachs, both Brown and Whitman are accusing the other of having ties to that now-embattled investment bank. Whitman was on their board several years ago until resigning after a controversy in which she got shares in IPOs managed by Goldman.  Jerry Brown’s sister Kathleen, currently is Senior Advisor for Public Finance, Western Region, for Goldman. If, in Matt Taibbi’s memorable phrase, Goldman Sachs is a “vampire squid,” then it appears their tentacles are everywhere.

Level The Playing Field, a partisan site, is attacking Whitman for having a few million in Goldman “vulture funds.” But she’s a billionaire, so these amounts are comparatively trivial. However, she and other eBay executives did pay a $3 million fine in 2005 for getting IPO shares in return for giving Goldman future business. 

Brown’s sister working in public finance for Goldman could indeed be problematic for him. There are already moves afoot for California municipalities to break such agreements based on allegedly onerous terms. In fact, the City of Oakland continued an interest rate swap with Goldman while Brown was mayor and just before his sister started working for them. It has cost the city millions of extra dollars. He says his sister doesn’t ask him for permission where to work. True, but given the current climate, perhaps questions about the influence of investment banks on politics should be part of the debate, rather than just using such accusations to draw blood from one’s opponent.

Brown challenged Whitman and her badly trailing opponent in the primary, Steve Poizner, to a three-way debate. Whitman said this was a “stunt” and the debate should be after the primary is over, an assessment most pols would probably agree with.

George Skelton in the L.A. Times says, ok, Jerry Brown is promising both experience and new ideas to solve the state’s increasing problems. But just how will he plan to do that?  His campaign website is still mostly devoid of any actual plans. So, for that matter, is Whitman’s.  Apparently the budget crisis must have vanished, because neither one mentions it.

Shouldn’t this be a central focus in an important governor’s race?

The public pension crisis is also boiling over. Whitman says she’ll force change and raise retirement ages, but precisely how will this be done? She can’t just mandate it. Besides, the major problem is that public pension by law must be funded at 100% and the pensions can order municipalities and the state to pay more.

This is the 800 pound gorilla that virtually all California politicians, including Whitman and Brown, are studiously ignoring, in part because it would mean going to war against powerful well-financed unions who can turn out thousands of volunteers for (or against) a campaign and many of whom are state employees themselves.

Brown is mute about the pension crisis on his website. So, what are his plans to resolve the burgeoning public pension crisis? The voters have a right to know.

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