White House Denies Meddling in Goldman Sachs Fraud Case

The White House on Monday strongly denied any involvement in the timing of the high-profile fraud case against Goldman Sachs, after Republicans suggested Democrats were exploiting the charges to build the case for their financial regulatory overhaul.

Press Secretary Robert Gibbs said the White House "absolutely" did not have advance notice that the Securities and Exchange Commission would announce its case on Friday.

"The SEC doesn't notify the White House of its enforcement actions and certainly didn't do so in this case," Gibbs said.

The White House was facing questions about the timing of the announcement, since it coincided with a ramping up of the public campaign for the Senate to pass the Wall Street regulation bill.

Obama's campaign arm, Organizing for America, released a statement shortly after the SEC announcement calling for action on the Wall Street bill. Administration officials over the weekend confirmed the president will soon launch a series of outside-the-Beltway rallies and town hall events to build support for the financial package. Gibbs said that will begin Thursday with a trip to Wall Street, where the president will "call for swift Senate action."

Rep. Darrell Issa, R-Calif., ranking Republican on the House Oversight and Government Reform Committee, accused the administration of using "theatrics and tactics."

"It must be nice for the Democrats that the SEC's filing against Goldman Sachs so conveniently fits into their political agenda," Issa said in a written statement.

Senate Majority Leader Harry Reid said in a statement Friday that cases like the one against Goldman are "why we need to pass strong Wall Street reform this year."

Rep. Barney Frank, D-Mass., told CNBC on Monday that the SEC charges should build the case for the financial bill.

Sen. Chris Dodd, D-Conn., said the finance bill "would have prevented" the kind of fraud allegedly committed by Goldman Sachs.

Treasury Secretary Timothy Geithner, in an interview with NBC's "Meet the Press," would not discuss the particulars of the SEC case but said "reforms with teeth" are needed "to prevent these things from happening."

Republicans also accused the administration of biting the hand that fed it, since Goldman Sachs was President Obama's top Wall Street contributor during the 2008 campaign, with employees donating nearly $1 million, according to the Center for Responsive Politics.

A number of top Goldman executives gave the maximum contribution to Obama's campaign during the presidential race. Among them were President and Chief Operating Officer Gary Cohn, Chief Financial Officer David Viniar and Global Head of Compliance Alan Cohen, each of whom gave $2,300.

"Just whose side is President Obama on?" House Republican Leader John Boehner said in a statement drawing attention to the donations and questioning the announcement from the Securities and Exchange Commission that it's going after the banking behemoth.

The SEC is accusing Goldman Sachs of defrauding investors by failing to inform them that certain mortgage investments were devised with help from someone who was betting on their failure.

Gibbs said Monday that there was "plenty of evidence" before the SEC announcement Friday that Wall Street needs "new rules of the road."

While some questioned the timing of the announcement, others said it's nevertheless important for the SEC to remain vigilant in cases like this.

"We want banks to be banks, we don't want them to be casinos. And I'm glad the SEC is doing their job," Sen. Scott Brown, R-Mass., said on CBS' "Face the Nation" Sunday. "And they should bring those charges because it's wrong and we should do something about it."

Brown, though, is one of 41 Senate Republicans opposed to the current Wall Street bill that passed out of the Senate Banking Committee.