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Goldman Sachs has hired one of Washington’s top lobbyists for foreign investors ahead of a legislative year in which Congress may increase its oversight of foreign sovereign wealth funds.
Todd Malan is headed to Goldman Sachs after more than 14 years at the Organization for International Investment (OFII), where he most recently served as president and CEO. OFII is the top trade association for U.S. subsidiaries of companies headquartered abroad.
Sovereign wealth funds have come under increased scrutiny as their financial clout has increased and they have made investments into U.S. firms such as Citigroup and Merrill Lynch. All of the funds are owned and many are controlled by governments like China and countries in the Persian Gulf region. In some cases, their growth has been spurred by record oil prices.
The growth of the funds has sparked worries about foreign influence in U.S. financial markets, and Sen. Charles Schumer (D-N.Y.) has called for more transparency. These fears have also prompted concerns on Wall Street that Congress may set up barriers to foreign investment in the United States.
Malan and OFII were leading figures in the congressional fight over Dubai Ports World in 2006. Some members in Congress sought to block the deal, stirring fears that the United States was becoming less hospitable to foreign investment.
The Dubai company was forced to back away from an investment in the U.S. after lawmakers from both parties raised national security fears over the prospect of U.S. ports being operated by a firm from the Middle East.
A Goldman spokeswoman said Malan was not hired to lobby specifically on the possibility of additional regulation of sovereign wealth funds.
“Todd will handle a broad range of international issues that impact our firm,” said Andrea Rachman.
Before joining OFII, Malan worked at the European-American Chamber of Commerce, and served in the congressional affairs office of the U.S. trade representative in the administration of President George H.W. Bush. But he has contributed to both Republican and Democratic presidential campaigns.
Goldman maintains a relatively small Washington office. According to lobbying records, four Goldman employees are registered to lobby Congress. But the investment bank and securities firm has a long list of outside lobbying firms working on its behalf.
Fourteen firms filed second-quarter reports with the Senate’s public disclosure office, including the Duberstein Group, Gephardt Group , Angus & Nickerson and Capitol Tax Partners .
In total, Goldman spent $1.74 million on lobbying in the first six months of 2008, compared to the $1.34 million it spent during the first half of 2007.
Goldman lobbyists were actively involved in the debate over housing and banking reforms. But the investment firm has also lobbied on climate change legislation and the effort to create a market to trade carbon dioxide emissions allowances. In recent months, it has lobbied on congressional efforts to limit the participation of investors in oil futures markets.
In addition to Malan, Goldman also hired Kenneth Connolly, a former staff director to the Senate Environment and Public Works Committee, in June. Connolly left ML Strategies to join Goldman.
Nancy McLernon, senior vice president at OFII, said her group’s board of directors is “already in the process of considering a replacement and hopes to be able to move forward expeditiously to ensure that the organization is on solid footing to start what is expected to be a busy 2009.”
McLernon said the group was looking to move quickly because the political climate is not now favorable “to foreign companies or global business in general.” For example, she noted the harsh criticism that met Belgium beer maker InBev’s purchase of St. Louis-based Anheuser-Busch.
“There is a lot more education that needs to be done,” McLernon said.
Jim Snyder contributed to this article.
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