Dirty Dotcom Deals May Doom Whitman Campaign

Gubernatorial hopeful's role in country's last financial swindle gains new currency

By Jackson West
|  Wednesday, Jul 15, 2009  |  Updated 2:30 PM PDT
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Dirty Dotcom Deals May Doom Whitman Campaign

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Sure, it may have been shady, but it was legal at the time, Whitman likes to point out.

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In a scathing report about investment bank Goldman Sachs that was published online by Rolling Stone today, author Matthew Taibbi rehashes a moment from GOP gubernatorial candidate and former eBay CEO Meg Whitman's past that she might like to forget.

During the dot-boom of the late '90s, Whitman was the beneficiary of a practice called "spinning" -- where executives at companies who did business with Goldman Sachs profited by getting early deals before the public on hot IPOs offered by the bank.

Republican Whitman isn't the only candidate that indulged in the practice -- Steve Westly, whom Whitman supported and who ran for the Democratic Party nomination for governor in the 2006 election, was also a fan.

Whitman earned $1.78 million, Westly $1 million. Chump change compared to the $15 million Whitman poured into her campaign yesterday.

But Whitman had to pay $3 million as part of a settlement in a suit brought by eBay investors, although she admitted no wrongdoing.

After all, it was entirely legal at the time. Since the dot-bomb wiped $5 trillion in wealth from the NASDAQ exchange, however, not so much.

Whitman also had to step down from the board of Goldman Sachs after her role in that financial mess was revealed.

Then again, California certainly needs someone with financial mess experience.

Jackson West knew he didn't like "spinning," even when it was just a trendy form of exercise.

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