New PAI report on Obama nominee’s role in PetroChina/Sudan financing

On Sunday I blogged about the key role of Bob Hormats, Obama’s recent nominee for undersecretary of state, in the stock offering of PetroChina, a company linked to Sudan’s genocidal regime.

Hormats’s Goldman Sachs connection has been criticized elsewhere, but his Sudan ties deserve more scrutiny.

This is no insignificant matter: as a Goldman Sachs executive, Hormats threw his weight behind a stock offering that helped to finance Sudan’s genocidal regime. He did so in a deceptive and, as it turned out, illegal manner. And he did so despite the fervent opposition of a broad coalition concerned about the link between oil revenues and the Sudan genocide. This coalition included government officials (including members of the Reagan administration), labor unions, human rights organizations, and religious groups.

The Public Accountability Initiative (PAI, the 501c3 behind LittleSis) will be releasing the Hormats research in the form of a report and circulating it to various stakeholders and Senate offices. The introduction is below, the full report is here.

As Goldman exec, Obama nominee played key role in Sudan-linked IPO

Despite human rights concerns, State Dept nominee pushed through illegal PetroChina offering

President Obama’s recent nominee for undersecretary of state, Robert Hormats, is another in a long line of Goldman Sachs executives to secure influential posts in government. But his nomination deserves special scrutiny, above and beyond growing concern surrounding the bank’s influence in government.

Hormats played a crucial role in a 2000 Goldman Sachs deal that was fervently opposed by religious groups and human rights advocates and later cited by the SEC as an example of illegal market manipulation: the $3 billion initial public offering of PetroChina, a company with ties to Sudan’s genocidal regime.

Key facts concerning Hormats’s role in the PetroChina IPO:

  • With the PetroChina IPO facing significant opposition from human rights advocates, Hormats assured members of the press that no funds from the offering would be used for work in Sudan.

  • These statements later proved to be inaccurate and misleading. Several large institutional investors, including Harvard, have since divested from PetroChina, citing human rights concerns.

  • The SEC later cited Hormats’s remarks as evidence of illegal market tampering, or “market conditioning,” in a larger case against Goldman Sachs, which the bank settled for $2 million.

Hormats’s role in the PetroChina deal raises serious questions about his fitness to serve in a post that will give him substantial influence over international economic policy and US-China relations.

  • Illegal and deceptive financial practices. As a Wall Street executive, Hormats deceived investors and violated SEC rules in order to promote Goldman Sachs’ interests in the PetroChina deal. With this record, can he be a credible advocate for sound international economic policy?

  • China, Sudan, and human rights. By offering support for the PetroChina deal, Hormats flouted human rights and national security concerns as they pertained to China and Sudan. With this record, can he effectively represent US interests in managing US-China policy?

  • Goldman Sachs and conflicts of interest. How will Hormats negotiate the conflicts of interest accrued during his time at Goldman Sachs?

These questions deserve critical examination from the Senate as it considers the Hormats nomination.

This Public Accountability Initiative brief outlines key findings and supporting documentation and raises important questions for Robert Hormats.

The Public Accountability Initiative is a 501(c)3 research and educational organization focused on corporate and government accountability. To learn more, see p. 6 of this brief, visit our website at, or see our work at LittleSis (