Lawrence Delevingne|Oct. 7, 2009, 3:17 PM | 902 |5
GS Oct 7 2009, 06:40 PM EDT
WIth all the company's riches, why is a Goldman Sachs (GS) subsidiary getting a $3 million earmark from Washington?
Politico: A mining company owned by Goldman Sachs and two private equity funds is in line to get a $3 million earmark for work at a rare earth elements mine in Mountain Pass, Calif. — raising questions as to why Congress would take on some of the risk for a bailed-out investment giant that’s already making a profit.
As the article notes, Molycorp's mine is a rich source of elements used to produce powerful magnets for precision-guided weapons, hand-held communication devices, wind turbines and hybrid cars.
California Republican Rep. Jerry Lewis inserted the earmark for the mine into the House Defense appropriations bill, reasoning that it's a national security concern. The other major source for the minerals, China, could cut exports.
This concern is fair, though probably overblown. There's a lot of hype about China limiting exports of so-called rare earth metals, but that's far from clear -- plus, how does the taxpayer subsidizing Goldman Sachs change anything?
Of course, the chance to line up at the government trough is a big reason why companies get into areas relating to green or weaponry.
Goldman and Molycorp didn't immediately respond to our requests for comment.