Goldman Sachs Group Inc. banned all of its partners from making campaign contributions to state and local candidates running for office, as well as state or local officials running for federal office.
As of Sept. 1, every partner is considered a "restricted person" prohibited from engaging in political activities or making campaign gifts to those candidates or officials, according to an Aug. 29 internal memo sent to partners.
"The policy change is meant to prevent inadvertently violating pay-to-play rules, particularly the look-back provision, when partners transition into roles covered by these rules," the New York-based firm said in the memo, reported earlier Tuesday by Politico. "The penalties for failing to comply with these rules can be severe and include fines and a ban on the firm from doing business with government clients in a particular jurisdiction for a period of at least two years."
The Securities and Exchange Commission enacted the pay-to-play rule in 2010 after a series of scandals involving money managers accused of trying to improperly influence state officials to win investment-management business. Some of that influence included arranging political contributions.
This year, the rule extends to the presidential race since Republican nominee Donald Trump chose Indiana Governor Mike Pence, a sitting state official, as his running mate.
