Does Goldman rule DC?

Not as much of a smart-ass question as it seems. When US President George W. Bush stepped forward to announce his new treasury secretary on May 30, a few Goldman Sachs friends likely knew Henry Paulson had the job. After all, Paulson was not the first Goldman executive to join the Bush administration from the 137-year-old investment bank described by the president as one of America's "most respected firms". In fact, he was following in the well-heeled footsteps of three other former Goldman alumni who answered Bush's call, although Stephen Friedman who briefly headed the White House National Economic Council, has since returned to "the firm" as it is known on Wall Street.

Aside from running a billion-dollar bank, it is also likely that Paulson's political donations of tens of thousands of dollars to Republican senators added to his luster.

The "revolving door" between the corporate world and government is nothing new, but Goldman leads the way by far in terms of its managers infiltrating the White House and other top government posts.

"It appears to be, for whatever reason, that Goldman Sachs sometimes has a disproportionate share of former employees in and out of government at any one time," said former White House spokesman Trent Duffy, who observed personnel decisions.

"Some companies are more welcoming of government officials and maybe that's how Goldman has been a little more successful in putting its people in there," Duffy said.

Others said Goldman's blue-chip reputation also helps.

"There is a bias in favor of people who have risen to the top at places like Goldman because it is seen as giving that person more to offer in that type of post, like the treasury," said Beth Young, an analyst at The Corporate Library, an independent corporate governance consultancy. Young said Goldman benefits when executives return to the firm, as they would be expected to bring back a BlackBerry bursting with influential contacts.

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