Francine McKenna sums up the problem with Facebook’s Goldman Sachs investment pretty succinctly over at Forbes:

Facebook wants the public’s money - and their trust - with none of the disclosure and none of the regulatory scrutiny of a public company.

Goldman is getting around public disclosure rules that trigger when a company reaches 500 investors by creating a special-purpose vehicle to act as a single investor even though it represents hundreds of investors. McKenna:

Recall, SPVs and SIVs are legal entities used to put investments into limbo, neither on the managing entities’ books nor subject to audit scrutiny on their own. These off-balance sheet structures were the vehicles of choice for Enron, for moving subprime assets off the books at Citigroup and other banks, and for hiding bad assets for Lehman.

I’m not saying that Facebook shares are bad assets. But there’s really no way for anyone other than insiders to know for sure. If Goldman is considered the sole investor in form then why not in substance, too? That would mean their investment in Facebook should go on the Goldman Sachs balance sheet. And what’s to prevent the SPV with the Facebook shares from being used as collateral for debt, just like the commercial paper issued out of SPVs by the banks? If Goldman is legally - to skirt the reporting rules - the sole investor in Facebook under this structure, what do you as an investor really own when you put your $2 million or more into it?

Right on cue, The Wall Street Journal reports this morning that the SEC is looking at whether the Goldman/Facebook deal violates the spirit of the rules.

— The lede on this New York Times piece gets the point of its story across rather nicely:

Companies spend millions of dollars each year complaining to Congress about burdensome laws and regulations, pressing their concerns in public campaigns and in private meetings. They rarely wait for invitations.

Last month a senior House Republican, Representative Darrell Issa of California, nevertheless dispatched letters to 150 companies, trade groups and research organizations asking them to identify federal regulations that are restraining economic recovery and job growth.

Fire up the chainsaws, boys.

— Here’s an interesting bit of financial history, via Edward Harrison, from economist Michael Hudson, who talks here about how tax rates for the rich got so high under Eisenhower.

Fascinating stuff from a perspective you’re not going to hear in the business press.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.