It turns out that Ted Cruz's convoluted relationship with Goldman Sachs (GS) is even more transactionally opaque than we previously imagined.
Sure, we know that he is fond of calling out Wall Street and Goldman for being evil forces in the American narrative even though his wife Heidi is on leave from her managing director gig at Goldman, which also provided Cruz and his family with healthcare while he ran for, and worked in, The Senate.
Ted's cognitive Goldman dissonance was on real display back in March of last year when he said this to Bloomberg:
"Goldman is one of the biggest banks on Wall Street, and my criticism with Washington is they engage in crony capitalism. They give favors to Wall Street and big business and that's why I've been an outspoken opponent of crony capitalism, taking on leaders in both parties. I think big business, if they're building a better mousetrap, great, but it shouldn't be government favoring, and let me give you an example: Dodd-Frank. Sold to the American people as stopping 'too-big-to-fail.' What happened? The big banks have gotten bigger. Goldman has gotten bigger..."
That's right Middle America, Teddy Cruz knows that Goldman Sachs is a vampire squid trying to suck your money out of your pockets with its government-powered tentacles, and he knows because Goldman is like family in the Cruz household.
And like family, it appears that Goldman also lent Ted a little money to help him achieve his dreams. Per an excellent scoop from Mike McIntire in the NY Times, Ted Cruz has not just been obfuscating his relationship to Goldman, he's lied by omission about the bank's key role in his bullsh!t political origin story,
As Ted Cruz tells it, the story of how he financed his upstart campaign for the United States Senate four years ago is an endearing example of loyalty and shared sacrifice between a married couple.
“Sweetheart, I’d like us to liquidate our entire net worth, liquid net worth, and put it into the campaign,” he says he told his wife, Heidi, who readily agreed.
But the couple’s decision to pump more than $1 million into Mr. Cruz’s successful Tea Party-darling Senate bid in Texas was made easier by a large loan from Goldman Sachs, where Mrs. Cruz works. That loan was not disclosed in campaign finance reports.
But a lot of hardworking people take on loans from banks (maybe not investment banks at which one of them works as a senior executive), and take on big debt through usury interest rates to get ahead.
What kind of loans are we talking about?
A review of personal financial disclosures that Mr. Cruz filed later with the Senate does not find a liquidation of assets that would have accounted for all the money he spent on his campaign. What it does show, however, is that in the first half of 2012, Ted and Heidi Cruz obtained the low-interest loan from Goldman Sachs, as well as another one from Citibank. The loans totaled as much as $750,000 and eventually increased to a maximum of $1 million before being paid down later that year. There is no explanation of their purpose.
But at least they weren't risky wealthy person instruments like margin loans...
The biggest change in the Cruzes’ finances in 2012 was the addition of the two bank loans, each valued at $250,000 to $500,000, during the first half of the year. One was a margin loan from Goldman Sachs. Margin loans, which are secured by holdings in a brokerage account, are often used to buy more stocks, but can be obtained for almost any purpose.
According to McIntire, the Cruzes' also took a line of credit loan from Citibank (C), which they have since paid back, which is easy to believe since it also appears that they got 3% floating rates on all of their loans. McIntire also found that the Cruzes still owe Goldman between $50,000 to $100,000.
The campaign finance regulation mishegas aside, it stands to reason that after watching and listening to a presidential take shots at his bank for the last year, Lloyd Blankfein must have gotten a cheap thrill knowing that candidate owes him a few K.
We can also expect Cruz's fellow candidates to revel in his Goldman schadenfreude during tonight's debate.