Gov.-elect Brown's banker sister moving to avoid possible conflict
Kathleen Brown is Goldman Sachs’ head of public finance on the West Coast, and the securities firm is a major underwriter of California’s debt. That leads to a bit of a conflict as Brown’s older brother, Jerry, prepares to take office as the state’s next governor.
So she is leaving her Los Angeles post and heading to Chicago, according to Bloomberg News, where she will become chairman of investment banking for the Midwest.
“Kathleen is taking on this new role because it broadens her client focus,” Goldman spokesman Michael DuVally told Bloomberg. “Had she continued to work with California municipalities, it might have created the perception of a conflict of interest.”
Kathleen Brown, 65, is a former state treasurer and lost the 1994 gubernatorial contest to Republican Pete Wilson.
Although she was not a major presence on the campaign trail for her brother this year, her employer figured in this year’s election.
Republican nominee Meg Whitman was hammered by primary rival Steve Poizner and Democrats for receiving special access to lucrative stock offerings made by Goldman Sachs. After a lawsuit by EBay stockholders alleged that she had received the stock for steering EBay business to Goldman Sachs, Whitman returned nearly $1.8 million in profits.
Whitman’s campaign noted that Oakland lost millions of dollars to Goldman because of a complicated financial deal while Jerry Brown was mayor of the city. But the deal was entered into the year before he took office.
-- Seema Mehta in Los Angeles