Goldman Sachs has agreed to pay nearly $12 million to settle civil charges accusing one of its executives of providing campaign services to a Massachusetts official in return for bond business.
The U.S. Securities and Exchange Commission also charged former Goldman Sachs vice president Neil M.M. Morrison with trying to influence the awarding of state contracts through campaign work for former Massachusetts Treasurer Timothy Cahill.
Morrison campaigned for Cahill from his Goldman Sachs office using company phones and email between November 2008 and October 2010, the SEC said. The services weren't reported by Goldman Sachs, the SEC said. The company earned more than $7.5 million in fees from underwriting Massachusetts bond sales after Morrison's activities, the agency noted.
Goldman Sachs fired Morrison in December 2010.
By law, firms are banned from underwriting municipal bond sales within two years of making any contribution to an official of the government issuing the bonds.
Regulators have issued warnings for years over so-called "pay-to-play" arrangements between investment firms and state and local government officials in the awarding of contracts for business in the $2.7 trillion municipal bond market.
The SEC has brought a number of such cases against Wall Street banks, often involving campaign contributions or other payments. However, the new Goldman Sachs case marked the first time the agency accused a company of making noncash contributions to a political campaign.
Morrison's attorney didn't immediately return a telephone call seeking comment.