Carla Marinucci and Lance Williams have a long and in-depth article today on Meg Whitman's connections to reviled investment banking house Goldman Sachs, which has played a leading role in the European debt crisis and is accused of being at the center of asset bubbles and their subsequent crashes.

The article goes into depth on both Whitman's time on the Goldman Sachs board in 2001-02, relations between eBay and Goldman Sachs, and Goldman Sachs' role in state bond issuances. An excerpt:

From 1998 to 2002, while she was CEO of eBay, Whitman helped steer millions of dollars of her company's investment banking business to Goldman, court records show.

In 2001, Goldman put Whitman on its corporate board, paying her an estimated $475,000 for little more than a year of part-time service. The company also gave her insider access to the initial public offerings of hot stocks worth millions, according to the records.

Whitman left the board in 2002 after she was singled out in a congressional probe of bond underwriters and "spinning" - a financial maneuver, now banned, in which Goldman and other firms allegedly traded access to hot IPOs for bond business. Whitman later settled a shareholder lawsuit related to profits she and other execs made from buying the IPOs.

In recent years, Whitman has kept part of her fortune, estimated by Forbes magazine to be $1.2 billion, in investment funds managed by Goldman, her financial disclosure report indicates. For her campaign, she's received $105,500 in donations from Goldman executives, state records show.

But it's not just that Whitman has ties to GS, from serving on its board to raking in campaign contributions from them. Goldman Sachs has been implicated in urging bets against California bonds it helped to sell. The firm basically was advising clients to profit off of the state's budget crisis, driving up the cost of borrowing and potentially contributing to the state's cash flow problems in the spring of 2009.

State bonds are big business for Goldman Sachs, and can only be expected to grow if Whitman gets elected. Her campaign pledge to increase the budget deficit through higher taxes will lead to a greater reliance on bond debt to fund programs, unless Whitman plans to destroy those programs in their entirety and never spend another dime on infrastructure. Although the state treasurer has the key role in selling the bonds, the governor appoints members of key commissions overseeing these sales.

Meg Whitman represents the Goldman Sachs "vampire squid" approach to governance, extracting wealth for the elite by pillaging public services and picking the pockets of taxpayers. This has been going on under Arnold Schwarzenegger, but would likely rise to a new level under Whitman, who further plans to reward Goldman Sachs and their investors by eliminating the state's capital gains tax, regardless of the cost.

Jerry Brown has his own familial connections to Goldman Sachs - his sister Kathleen Brown, former state treasurer and candidate for governor in 1994, serves as a vice president for Goldman Sachs in LA. But Brown himself has no ties to Goldman Sachs and owns no Goldman stock, according to the Marinucci and Williams article.

Jerry Brown has already been staking out a position as a populist critic of Wall Street, as seen on a memorable CNBC appearance last October. Whitman's Goldman Sachs ties do indeed make for an important campaign issue, one that Brown would do well to exploit.

After all, one of the key political and economic needs this country faces is to get the vampire squid of Goldman Sachs off our backs. If Brown is willing to lead the charge, he would find many Californians willing to back him in doing so.

RJ Eskow has a excellent post up examining "Meg Whtiman's shady Goldman Sachs past" and what it might portend for California's future if she were to get elected.

Whitman was a Goldman Sachs board member from 2001 to 2002, when she resigned under a cloud of suspicion for her role in an IPO scandal:

Whitman has said she did nothing wrong by accepting the IPO shares and that the offerings did not help Goldman Sachs win additional business from eBay, which has paid the Wall Street firm $8 million for investment banking services since 1996, the Wall Street Journal reported.

In October, Congressional investigators disclosed that Goldman allocated shares of more than 100 IPOs to Whitman since 1996 and she then quickly sold those shares for a profit, in a practice known as "spinning."

Whitman's connections to Goldman Sachs are quite relevant, as Eskow explains, showing that Goldman Sachs has a long record of screwing California taxpayers:

What kind of business relationship can Californians expect their state to have with Goldman Sachs and firms like it if Meg Whitman becomes governor? Here's a clue: In a report called "Corporate cash boosts Whitman," the Associated Press reported that "The biggest donations came from New York investment bankers, hedge fund managers, attorneys and others." If there's one thing these guys know it's how to prime the pump.

Not that Whitman's old pals at Goldman haven't already been profiting off California's misery. They were hired to manage some multibillion dollar state bond offerings but, as reported in the Los Angeles Times, millions in fees didn't stop Goldman from secretly undermining California's credit rating. That hurt the very sales they were hired to manage. As the Times states, the firm "urged some of its big clients to place investment bets against California bonds" by "proposing a way for ... clients to profit from California's deepening financial misery."

Goldman Sachs's role in serious government debt crises is getting greater scrutiny over in Europe, where they appear to have played the leading role in hiding Greek debt levels in order to massively profit off of Greece's heavy borrowing in preparation for the Athens Olympics. This unsustainable lending has spawned a European Union investigation while the EU works to deal with the crisis Goldman Sachs helped create with the Greek debt. Eskow cites reporting that indicates Goldman Sachs has screwed around with California debt, in this case undermining state bond sales for their own profit.

As it turns out, it's not just Goldman Sachs that is screwing with Californians and their debt sales. JP Morgan, Lehman Brothers (before their collapse) and UBS have all been implicated in an alleged conspiracy to cheat municipal governments by paying below-market interest rates to those governments. Remember that, as Eskow noted, many of Meg's donors are investment bankers.

The picture this all paints is extremely clear. California has been cheated out of millions - at least - by Goldman Sachs and its fellow investment banking houses. Meg Whitman represents them and their interests, and will almost certainly enable this misbehavior to continue.

It's also further evidence of the need for California to develop its own state bank, as was done by North Dakota nearly 100 years ago, in order to remove as much state borrowing as possible from the greedy clutches of Goldman Sachs and its fellow henchmen.

UPDATE: An op-ed by Faith Bautista and Preeti Vissa at Capitol Weekly draws more attention to the issue and calls for a legislative investigation.