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East Bay | Government & Elections

The Port of Goldman Sachs
by Darwin BondGraham (repost)
Thursday Aug 16th, 2012 10:18 AM
Goldman Sachs has multiple longstanding interests in the Port of Oakland’s finances and business operations. Goldman Sachs is a party to at least three major areas of Port business.

First and foremost is Goldman’s role as an underwriter or dealer for the Port’s various debt offerings. No other financial company is as important as Goldman Sachs for the Port’s numerous and complex bond and commercial paper deals.

Goldman Sachs also holds a financial interest in the Port’s day-to-day operations. Through several Goldman Sachs investment funds the bank holds ownership stakes in major shipping and logistics corporations that lease Port facilities, or otherwise conduct business through the Port of Oakland.

Finally, Goldman Sachs has attempted to involve itself in the Port’s real estate development activities by teaming up with developers who hold options on waterfront real estate.

Debt

Goldman Sachs is among a handful of financial companies pre-qualified by the Port of Oakland to deal its commercial paper. This image is taken from a recent Port of Oakland board meeting agenda.

For several decades now Goldman Sachs has routinely been selected, along with a handful of other privileged banks, to serve as a pre-qualified dealer for various types of debt offerings issued by the Port. For the Port’s Capital Improvement Program, Goldman Sachs has been selected to underwrite or deal in multiple major debt offerings.

For example, in 2000 Goldman Sachs led a syndicate of investment banks to underwrite $400 million in bonds to finance major expansion at the Oakland Airport.

In 2002 Goldman Sachs again led an offering of $620 million in bonds to finance aviation capital projects, as well as construction of new shipping terminals, intermodal facilities, and dredging at the Port. Goldman Sachs remains one of the Port’s key dealers for commercial paper today.

The bank makes millions off this business by re-selling the Port’s commercial paper to investors in the open market at higher prices, as well as by charging a dealer’s fee.

Senior level executives who have worked for both the Port and Goldman Sachs at different times strengthen the bank’s close business relationship with the Port. The Port’s current CFO, Sara Lee, is a former Goldman Sachs vice president who led the bank’s public sector and infrastructure finance group. This group has its offices in Goldman Sachs’ San Francisco branch headquarters at 555 California Street.

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