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Goldman Sachs "Wall Street Casino Senator" Finally Slithers Away

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Former US Senator John Ensign of Nevada resigned from office one day before he was to be questioned under oath about some of the ugliest legislative ethics violations in recent memory.

Marian Wang of independent, non-profit investigative journalism newsroom ProPublica quotes from the Senate Ethics Committee's report on Ensign (emphasis hers):

Had Senator Ensign not resigned the Special Counsel would have recommended that the Committee initiate an adjudicatory review for the purpose of considering the appropriateness of disciplinary action against the Senator. The Special Counsel is confident that the evidence that would have been presented in an adjudicatory hearing would have been substantial and sufficient to warrant the consideration of the sanction of expulsion.

So, that's the end of the story. How did it all begin?

In April 2010, Goldman Sachs executives took a beating on Capitol Hill, repeatedly being accused of running nothing more than a rigged Las Vegas casino.

That’s when Senator John Ensign of Nevada (whose father, Michael, happens to be a former executive with the Mandalay Resort Group, now MGM Mirage) stridently rose to the defense of Las Vegas casinos.

“In Las Vegas, people know that the odds are against them,” he said. “On Wall Street, they manipulate the odds while you are playing the game.”

It was a rather strange statement coming from a man currently the target of a federal criminal inquiry. As Melanie Sloan, a former federal prosecutor who's now the executive director of Citizens for Responsibility and Ethics in Washington told me last year, “John Ensign’s moral outrage is hard to swallow at any time. For him to be outraged about anyone else’s ethics is absurd.”

Let’s take a look at the man who couldn’t stomach the thought of Nevada gambling parlors like the Wynn, the Venetian, or the Riviera Hotel & Casino being compared to an outfit such as Goldman, shall we?

In 2006, John Ensign asked his best friend, Doug Hampton, to serve as his co-chief of staff in the US Senate, regardless of the fact that Hampton had no political experience. According to Hampton, Ensign wanted him to “walk alongside [him] in whatever capacity possible…same kind of model that Jesus exhibited in the Bible.”

Eventually, Ensign got to know Hampton’s wife Cynthia -- who was also Ensign’s campaign treasurer -- in the Biblical sense, diving headlong into a sexual relationship with her, and putting her teenage son on the payroll of the Republican Party‘s Senate Campaign Committee.

After Doug Hampton found out what was going on between Ensign and his wife and confronted the Senator, Ensign sent a letter to Cynthia Hampton to end the affair, writing, “God never intended for us to do this. I walked away from Him and my relationship with Him has suffered terribly.”

“John Ensign’s parents then offered Doug Hampton $96,000 with the expectation he’d remain quiet,” Craig Holman, of Washington, DC policy group Public Citizen, explained to me. “But Ensign never actually ended the affair.”

“Ensign claimed the money was a gift to a friend who was going through a difficult time, not a bribe,” Holman said. “He also pointed out that he wasn’t responsible for any wrongdoing to begin with, because it was his parents who gave Hampton money, not him.”

Ensign wanted Hampton out, so he offered to help him start a lucrative new career as a lobbyist, lobbying the office of John Ensign.

“This was part of the deal to keep Hampton from going public about the affair,” Holman said. “The guy had no lobbying experience whatsoever, but businesses that had issues pending before Ensign were told to hire Hampton, who would then lobby Ensign.”

Hampton said Ensign helped him line up clients, which CREW’s Sloan pointed out is a felony.

BioDiesel of Las Vegas, a company that wanted to convert used cooking oil from area hotels into fuel, needed money to complete construction of a processing plant. They asked Ensign to contact executives at Kinder Morgan, which already had a plant up and running in the area, about a partnership.

John Lopez, Ensign’s chief of staff, and Brooke Allmon, Ensign’s director of Nevada legislative affairs called Kinder Morgan, and, according to reports, Allmon informed the company that if it wanted to receive favorable treatment from John Ensign, it must hire Doug Hampton as a lobbyist.

The partnership didn’t make economic sense to the parties involved and Hampton wasn't ultimately retained by Kinder Morgan.

Eventually, Hampton revealed that, in 2008, Ensign set him up with executives from a small Nevada debit-card company called eCommLink to discuss hiring him on as a lobbyist, as he could provide access to Ensign who could help secure contracts with the Treasury Department.

A man without lobbying experience generally doesn’t make for the most effective lobbyist, and Hampton was out of the game a year later, broke and unemployed.

As ProPublica's Wang notes, Ensign still seems to believe he did nothing wrong. In his resignation letter, he wrote:

“While I stand behind my firm belief that I have not violated any law, rule, or standard of conduct of the Senate, and I have fought to prove this publicly, I will not continue to subject my family, my constituents, or the Senate to any further rounds of investigation, depositions, drawn out proceedings, or especially public hearings."

Resignation or not, the matter has been referred to the Department of Justice and Federal Election Commission for further review. With that in mind, CREW's Melanie Sloan says John Ensign must finally be held accountable.

“It is encouraging to see the Senate Ethics Committee agrees with what CREW has said from the beginning: Senator John Ensign broke the law and he should be prosecuted," she wrote on CREW's website. "Throughout the entire ordeal, Senator Ensign insisted that he did nothing wrong; what a surprise, he lied again. The ball is now back in DOJ’s court, but its recent track record for taking on politicians has been abysmal. It is puzzling how DOJ, armed with the full might of the legal system, was unwilling or unable to reach the same conclusions as the ethics committee. Perhaps this report will give DOJ the spine it so clearly lacks, and the courage to finally take on Senator Ensign.”

Perhaps Lloyd Blankfein would be willing to testify as a character witness?
POSITION:  No positions in stocks mentioned.