There's a lot of investment banking (investment banking news) work to be had in the noncorporate world--municipal bonds, public-private financings, country debt work and the like. But when the political environment turns sour on you, you just might get the feeling it's open season on you. We've seen that before. So it is that Goldman Sachs (GS Goldman Sachs news)--no stranger to political controversy--finds itself in a harsh light over its role in the Build America Bonds program.

Bloomberg reports that states and municipalities have paid "an average 37 percent more to investment banks for underwriting Build America Bonds than for handling tax-exempt sales since offerings of the subsidized taxable debt began in April." That translates into more than $100 million in added costs, which would appear to be well above corporate costs for similar services. The Senate has opened an inquiry into this. Senator Chuck Grassley (Charles Grassley news) has sent Goldman Sachs a letter, asking for an explanation. Goldman Sachs has touted its role with a large advertisement, voicing its support for the Build America Bond program. We'll see if this issue blows up. In this environment, you don't want to be seen as taking advantage of cash-strapped cities.   

For more:
- here's the Bloomberg report
- here's a copy of the letter

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