Elizabeth Warren is not cool with the eye-popping $285 million Gary Cohn is collecting from Goldman Sachs on his way to becoming President Trump’s top economic adviser.
The Democrat from Massachusetts sent Cohn a letter on Friday questioning the “astonishing windfall,” and it’s impact on the former Goldman Sachs exec’s ability not to “play favorites” when he makes decisions about the economy.
The letter, signed by Warren and Senator Tammy Baldwin, asks Cohn to recuse himself from decisions directly or indirectly related to Goldman Sachs.
Indeed, on Friday, Cohn was the face of the Trump administration’s push to start dialing back the sweeping Dodd-Frank regulations that govern the way banks like Goldman Sachs do business.
In interviews to CNBC, Bloomberg and The Wall Street Journal, Cohn spoke about how regulations have been holding back American businesses, including banks.
“We’re going to attack all aspects of Dodd Frank,” Cohn told Bloomberg. “Banks have been hoarding capital and not allowed to lend money.”
The letter from the senators urged Cohn to “think carefully about whether accepting this massive reward from Goldman Sachs…will allow you to be an effective economic policy leader for all Americans.”
Typical recusal periods are for one year, but the senators want Cohn to back away from Goldman Sachs matters for his entire term as director of Trump’s National Economic Council.
The Democratic senators further asked Cohn not to take advantage of loopholes that would allow him to avoid paying immediate taxes on the $285 million because he’s entering the government.
Ethics experts, and now two U.S. senators, are also concerned about Goldman’s willingness to accelerate Cohn’s payouts.
Lawrence Noble, general counsel at watchdog group the Campaign Legal Center, previously told CNNMoney that the payments “present a serious ethics issue.”
Noble, a CNN contributor, said he thinks the money “calls into question whose interests Mr. Cohn will be representing.”
Cohn’s new role will give him vast influence over Trump’s efforts to remake the American economy. As leader of the NEC, the former Goldman senior exec will help frame the debate on the biggest economic issues and act as the president’s quarterback on the economy and coordinate policymaking between various agencies and programs.
Some of that policymaking will undoubtedly involve Wall Street banks like Goldman Sachs. Just this week Trump pledged this week to “do a big number” on the Wall Street reform law known as Dodd-Frank. Trump is expected to sign an executive order on Friday directing his administration to evaluate financial regulation imposed by Obama.
After 25 years of building Goldman Sachs into a powerhouse, Cohn stepped down last year from the firm.
Goldman agreed to give Cohn a chunk of that $285 million fortune ahead of schedule in order to sever ties with the firm. For instance, Goldman paid Cohn $65 million in cash in exchange for stock awards that he earned in recent years. Normally, that stock would be tied up for several years.
Ethics experts said they believe Cohn’s exit qualifies as “extraordinary payment.” Federal regulations require government officials who receive that kind of a payment in excess of $10,000 to recuse themselves.
Warren also raised concerns about how much Cohn will pay in taxes related to that fortune. Political appointees who sell assets to avoid conflicts can request permission to delay paying capital gain taxes on those sales.
The White House did not respond to a request for comment, but representatives have previously defended Cohn’s handling of his exit from Goldman.
Cohn “followed all necessary rules and regulations” to join the Trump administration and won’t receive a salary in his new role, White House spokeswoman Natalie Strom previously told CNNMoney.
Goldman has also said that the only reason it accelerated delivery of Cohn’s shares was to allow him to comply with conflict of interest rules that were established by the federal government.
Warren and Baldwin stressed that they “do not begrudge” the salary and bonuses that Cohn earned over the years, making him a “fabulously wealthy man.”
“But serving the public in the White House is a privilege, and it requires leaders who can guarantee they will be impartial,” the senators wrote.
