Goldman executive advised Cahill

Treasury ex-aide e-mailed advice during campaign

By Frank Phillips
Globe Staff / March 11, 2011

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A former Goldman Sachs executive was more heavily involved in political work for state Treasurer Timothy P. Cahill’s gubernatorial campaign than previously disclosed, writing a fund-raising pitch and advising him on strategy.

The disclosures are contained in e-mails obtained by the Globe that Goldman vice president Neil Morrison sent to Cahill and his staff, in one case with the admonition, “please delete this e-mail.’’

Federal securities regulations sharply restrict public-finance bankers from contributing, either financially or through in-kind work, to political candidates and elected officials who issue public bonds.

Morrison, who joined Goldman Sachs in 2006 after serving as a top aide to Cahill at the treasury, negotiated a $455.9 million bond with a state water-pollution control board that Cahill chaired. The banking firm fired Morrison late last year for activities that had not been cleared by the company.

In a 2009 e-mail sent to Cahill’s assistant, Morrison, 37, wrote a draft of a campaign pitch for potential donors and other supporters that used data from a Boston Globe poll to demonstrate that Cahill could be a strong independent candidate for governor. In another from 2008, sent to Cahill from his Goldman account during business hours, Morrison attached a 20-page analysis of how he said the treasurer could mount an effective race for US Senate should Senator John F. Kerry be selected to be Obama’s secretary of state, including what he termed “a potential path to victory.’’

Morrison denied any connection between his dealings with Cahill and his role at Goldman Sachs. In a statement, he said: “My personal and professional relationship with Tim Cahill was just that, personal and professional. From my perspective, it will stay that way. It has nothing to do with Goldman Sachs.’’

Obtained through a public records request, the e-mails from Morrison, which span two years, are the subject of a US Securities and Exchange Commission investigation. In late January, the SEC delivered subpoenas to the office seeking a wide range of e-mails, phone records, and other documents concerning dealings by Morrison and Goldman Sachs with Cahill and his close aides.

Because the e-mails appear to have been sent during working hours and could be considered in-kind contributions, Morrison could face potential fines and the loss of his right to operate as a broker under federal rules. Regulations prohibit public-finance bankers exceeding the $250 limit set by the SEC, a policy designed to restrict “pay to play’’ schemes.

The agency could also impose penalties on Goldman Sachs, including recouping some of the nearly $1 million in fees from two recent bond deals and an undetermined share of $20 million in additional fees. The funds could be ordered returned to Massachusetts taxpayers. The company could also be banned from underwriting bond offerings by the state treasurer’s office for two years, according to federal regulations.

Morrison declined to respond to specific questions about the e-mails yesterday, citing the pending investigation.

Goldman Sachs declined to comment because of the pending SEC inquiry.

Through his lawyer Joseph L. Demeo, Cahill said there is no evidence that he responded to Morrison’s e-mails, or that Morrison violated any regulations.

“In Tim Cahill’s eight years of service to the Commonwealth, he received political advice and encouragement from many people,’’ Demeo said. “In any event, he is not responsible for what other people write, nor did he respond to Morrison’s e-mails. It is far from clear that Morrison violated any rule by forwarding advice from his work e-mail rather than his home e-mail.’’

But these latest disclosures indicate that Morrison was aware of the potential violations of SEC rules. On Aug. 4, 2009, he sent an e-mail to Cahill’s personal assistant, attaching the draft memo about the Globe poll that he had written for the treasurer for use by his fund-raising team. He asked her to print the document and deliver it to Cahill.

“After you print it, please delete this e-mail,’’ Morrison wrote. His title and the address and telephone number of Goldman Sachs’ Boston office are listed below his name. Cahill’s assistant responded with advice to send future e-mails to her private e-mail account.

The comments made by Morrison in several of the e-mails could also prove politically embarrassing. Morrison’s analysis on a potential Senate run for Kerry’s seat offered disparaging comments about another possible rival, Attorney General Martha Coakley, whom he described as having “done almost nothing of note since taking office’’ and added that she “is also not a charismatic or charming individual.’’

Coakley’s office is investigating allegations that Cahill and his aides had worked to get the lottery, which is controlled by the treasurer, to mount a million-dollar taxpayer-funded ad blitz in the final weeks of the gubernatorial campaign.

Morrison’s political activities first came to light during the gubernatorial campaign in early October, when Cahill filed a lawsuit against two of his political consultants. In documents filed in rebuttal to the suit, Morrison was identified as a “top political adviser’’ to Cahill. To prove the point, the documents included a copy of an e-mail Morrison sent from his private account to the two consultants, in which he accepts, on Cahill’s behalf, the terms of their contract.

Goldman Sachs reported to state securities regulators in December that it had fired Morrison because of a “loss of confidence involving outside activities without prior approval.’’ The financial banking firm has worked on $20.75 billion in state general obligation bond issuances since 2000. Last fall it removed itself from underwriting teams at two state authorities that were preparing to issue bonds, after Morrison’s role in the Cahill campaign became public.

The firm has been the subject of scrutiny since the SEC charged it with fraud in the sale of mortgage-backed securities. The company paid a $550 million fine in July.

Frank Phillips can be reached at