paulson dirt

sort by:
hot
newcontroversialtopold

georedd 1 point 15 hours ago[+] (0 children)

georedd 1 point 15 hours ago[-]

God more conflicts of interest The head of Wachovia bank that Paulson was trying to give to Citibank in a sweet heart deal - he was at Goldman Sachs with Treasury secretary Paulson.

CharlotteObserver.com Banking

October 6, 2008 close Wachovia names new CEO Struggling bank taps Treasury official and N.C. native Robert Steel to take helm By Rick Rothacker and Christina Rexrode rrothacker@charlotteobserver.com Posted: Thursday, Jul. 10, 2008 FED STEEL VOICES

Robert Steel resigned Wednesday as undersecretary of the treasury for domestic finance. He takes over as CEO of Wachovia, over a month after Ken Thompson resigned at the board's request. More Information

Wachovia Corp. on Wednesday evening named U.S. Treasury Department official Robert Steel its new chief executive officer, effective immediately, ending a six-week search and easing some of the uncertainty surrounding the struggling Charlotte bank.

Interim CEO Lanty Smith, who led the search, will keep his chairman title. All business and staff units will report to Steel, who brings strong N.C. ties, Washington experience and a Wall Street pedigree to the post.

The appointment puts an outsider at the helm of a major Charlotte employer and civic institution that has historically promoted home-grown executives to the corner office. Steel replaces Ken Thompson, a company lifer who was ousted June 1 as Wachovia faced mounting losses from its troubled 2006 acquisition of mortgage specialist Golden West Financial.

From the start, the 56-year-old Durham native and former Goldman Sachs vice chairman will face an array of serious problems, from regulatory investigations to a second-quarter loss the bank said Wednesday could reach a staggering $2.8 billion.

Analysts said Steel's appointment brings the bank Washington clout during a turbulent time for the financial industry and potentially offers investors a dose of good news before a miserable earnings report expected July 22. They said it was still uncertain, though, whether the new CEO means the bank can avoid a takeover by a rival.

In an interview, Steel, a Duke University alumnus, said his new job came together in a week to 10 days and that he hadn't been looking for the next thing. But by Wednesday night, he had resigned as undersecretary of the Treasury for domestic finance, traveled to Charlotte, and his wife, Gillian, was on her way.

“I'm all in,” he said, adding: “It's great to be back home.”

Asked about ongoing speculation that Wachovia could become a takeover target, Steel said he plans to build all of the company's businesses, focusing on the needs of investors, customers, employees and the community. “If we're good stewards of those responsibilities, we'll do just fine,” he said.

Smith, who has faced criticism for ousting Thompson without a permanent successor in place, reiterated the board's insistence the company has more value as an independent institution. “We felt that yesterday and feel that even stronger today,” he said.

The Wachovia board approved Steel's hiring unanimously on Wednesday and later announced the decision in a conference call for about 250 top leaders in the company. Smith, who has served with Steel on the Duke board of trustees, said the news was embraced enthusiastically, highlighting his local roots.

As Wachovia's search for a new CEO extended beyond a month, anxiety had increased for employees and shareholders over who would take charge at the nation's No. 4 bank by assets. Possible names had ranged from former Bank of America Corp. chief financial officer Al de Molina to insiders such as interim chief operating officer Ben Jenkins, who will stay on as vice chairman and head of Wachovia's retail bank.

A knowledgeable source had told the Observer earlier Wednesday that the search was nearing an end, and Steel's name emerged as a top candidate. The bank formally announced the new hire around 6:15 p.m.

Steel joined Goldman Sachs in 1976 and retired in 2004 after rising to vice chairman. He joined the Treasury Department in 2006, where he served under another Goldman alumnus, Treasury Secretary Henry Paulson. There Steel served as Paulson's principal adviser on domestic finance and led the department's activities involving the U.S. financial system and related economic matters.

In this post he played a key role in the Bush administration's ongoing efforts to calm roiled financial markets. He also found himself in an unusual position: a former investment banker in charge of tightening regulations on the banking industry. In March, along with Paulson, he unveiled a “Blueprint” for a new regulatory structure, including broader powers for the Federal Reserve. He also played a key role in the bailout of tottering investment bank Bear Stearns. Still, he has cautioned against too much government interference. “It is important to recognize that regulation alone can not protect us from market challenges,” he said in a speech last month.

In a statement, Paulson said Steel was a friend and colleague for more than 30 years. “He has served the President and the public with ingenuity and dedication during extraordinary times in our financial markets,” he said. “I know he will excel in his future endeavors.”

Steel brings to Wachovia a gold-plated resume that could help satisfy restless shareholders. But he doesn't have experience running a retail bank, Wachovia's forte.

The bank faces ongoing speculation that it could be a takeover candidate. Steel provides new stability, but his presence could stoke rumors of a possible tie-up with Goldman. Wachovia last month said it hired Goldman to analyze its troubled loan portfolio.

The bank's stock is down more than 60 percent this year and more than 40 percent since Thompson left. Wachovia shares closed Wednesday down 8 percent at $14.29.

Wachovia's troubles began building last summer, along with other banks, as the nation's mortgage meltdown spurred a global credit crunch. The bank's Golden West deal, however, left it floundering more than many of its peers.

Wachovia stripped Thompson, a UNC Chapel Hill alumnus and Rocky Mount native, of his chairman title in May and then asked him to retire last month as the bank's mortgage losses ballooned. The bank last week said it would stop making mortgage loans that have an option that can increase a customer's loan balance, a one-time Golden West staple.

Miami-based bank consultant Ken Thomas said an appointment from the public sector makes good sense. “The regulators are very tough right now,” said Thomas. “They're all watching very closely. Wouldn't it be nice to have somebody at the board level in Charlotte who speaks their language, the Beltway language?”

The bank needs a new leader who can acknowledge mistakes and spearhead a turnaround plan, Thomas said. He predicts that after a new CEO is announced, the bank will lay off more employees, close branches and seek capital from alternative firms, like a sovereign wealth fund or private equity firm.

Of Steel, he added: “That would be the best acquisition they made in some time.”

The installation of a new CEO probably signals Wachovia's intention to remain independent, said Bert Ely, a Virginia-based bank consultant. But with its stock trading at a third of the price it was a year ago, Wachovia is still an attractive takeover target. “A lot of it is going to depend on how the market reacts to” the new CEO, Ely said.

Wachovia said it expects to report on July 22 an after-tax loss available to common stockholders ranging between $2.6 billion and $2.8 billion. In addition, it expects an undetermined non-cash charge that will impact earnings but not hurt regulatory capital ratios.

Steel, who is chairman of the Duke board of trustees, plans to move to Charlotte with his wife. They currently reside in Connecticut and Washington with their three daughters, according to a Treasury Department bio.

In his first full day on the job, Steel will face a busy schedule today talking with analysts, reporters and employees. The bank will hold an event for employees at the Wachovia Atrium this morning.

Staff writer Stella M. Hopkins and Kevin G. Hall in the McClatchy Washington bureau contributed.

Subscribe to The Charlotte Observer & Earn Miles.

* permalink
* reply

georedd 1 point 5 days ago[+] (0 children)

georedd 1 point 5 days ago[-]

list of "relationships" at http://www.secinfo.com/$/SEC/Registrant.asp?CIK=1090368&View=Relationships

Paulson Henry M Jr U.S. SEC Registrant Click on these tabs to view other information related to Paulson Henry M Jr.

View: Registrant About Filings Files

Relationships Names Topics Sites All

No "Issuer" Relationships (where the security "Owner" is...) 2 "Owner" Relationships (where the security "Issuer" is...) Filing or "Issuer"
First Filing Last Filing Relationship Subject Company or Serial Company In ascending order 12/17/02 4/3/06 4 Goldman Sachs Group Inc [ formerly Goldman Sachs Group Inc ] 12/17/02 4/17/03 Officer Goldman Sachs Group Inc [ formerly Goldman Sachs Group Inc ]

First 20 of 29 Affiliate Relationships (based upon SEC Files: Parents / Subs., Directors / Officers, et al.) Last Filing Registrant In ascending order 6/18/08 Blankfein Lloyd C 12/19/06 Browne Lord of Madingley [ formerly Browne Sir John ] 1/3/08 Bryan John H 6/23/08 Cohen Alan M [ formerly Cohen Alan Marces ] 1/23/08 Cohn Gary D 12/21/07 Dahlback Claes 6/25/08 Evans J/Michael 10/12/07 Forst Edward C 12/21/07 Friedman Stephen 1/3/08 George William W 10/1/08 New Filing! Goldman Sachs Group Inc [ formerly Goldman Sachs Group Inc ] 8/1/08 Gupta Rajat K 9/3/08 New Filing! Johnson James A/DC 9/16/08 New Filing! Juliber Lois D 7/7/08 Kaplan Robert S 1/23/08 Kennedy Kevin W 9/25/08 New Filing! Liddy Edward M 7/7/08 Mittal Lakshmi N 7/31/08 Nora Johnson Suzanne M [ formerly Nora Johnson Suzanne ] 6/20/08 Palm Gregory K Please Sign In to List All of these

No Group-Member Relationships (Non-Registrant Filers: Partners, Affiliates, et al.) Filing-Agent Relationships (Attorneys, Financial Printers, Parents / Subs., SEC Agents, et al.) 1 Filing Agent Has Made Filings For Paulson Henry M Jr: Last Filing Filing Agent¹

4/3/06 Goldman Sachs & Co

¹ The SEC does not publish the names of most agents.

* permalink
* reply

georedd 1 point 5 days ago* [+] (0 children)

georedd 1 point 5 days ago* [-]

Henry Paulsons filing regarding the sale of his 630 something million dollars worth of Goldman Sachs stock (which becuase of a rule forebidding capital gains tax on sales for people taking government jobs - he paid no capital gains on this 600 million sale. WOW Just WOW - since his stock were originally at 1 ce3nt each value basically so he would have paid 15% capital gains right on basically the full salesprice or 90 million - yes 90 million dollars in saved capital gains taxes Paulson got paid to take the Treasury job. WOW )

http://www.secinfo.com/dnFu6.vG3.htm of all of his filing directly at the government edgar site http://www.sec.gov/cgi-bin/browse-edgar?company=Paulson+Henry+M+Jr&CIK=&filenum=&State=&SIC=&owner=include&action=getcompany

* permalink
* reply

georedd 1 point 5 days ago[+] (0 children)

georedd 1 point 5 days ago[-]

Henry Paulsons power of attorney filed with EDGAR

http://www.secinfo.com/dnFu6.vG3.d.htm

EX-24 · Poadesignation
DESIGNATION OF ADDITIONAL ATTORNEYS-IN-FACT

Reference is made to the Power of Attorney, dated January 31, 2003 (the "POA"), pursuant to which Henry M. Paulson, Jr. (the "Reporting Person") appointed the undersigned, as well as Saskia Brookfield Martin (and any other employee of The Goldman Sachs Group, Inc. or one of its affiliates (the "Firm") designated in writing by one of the attorneys-in-fact), one of the Reporting Person's lawful attorneys with power to act without the other, and with full power of substitution and resubstitution, to, among other things, execute and file for the Reporting Person and in the Reporting Person's name any Statement of Changes in Beneficial Ownership on Form 4 and any Annual Statement of Changes in Beneficial Ownership on Form 5, or any similar or successor form, which may be required to be filed by the Reporting Person with the U.S. Securities and Exchange Commission pursuant to Section 16 of the Securities Exchange Act of 1934, as amended.

Pursuant to the authority set forth in the POA, the undersigned hereby

designates Kenneth L. Josselyn, Beverly L. O'Toole and Benjamin J. Rader, each employees of the Firm, as additional attorneys-in-fact under the POA, with the same authority to act as was provided to the undersigned and the other attorneys-in-fact in the POA.

This Designation of Additional Attorneys-in-Fact (this "Designation") shall

not affect the continued power of the undersigned and Sakia Brookfield Martin to act under the POA to the full extent permitted thereby. Neither the POA nor this Designation shall be affected by the subsequent disability or incompetence of the Reporting Person. This Designation shall remain in full force and effect until either it or the POA is revoked in writing by the Reporting Person or The Goldman Sachs Group, Inc. or until such time as all persons to whom power of attorney has been granted pursuant to this Designation cease to be employees of the Firm.

IN WITNESS thereof the undersigned hereunto signed his name this 22nd day

of September 2005.

/s/ Roger S. Begelman
--------------------------
Roger S. Begelman

Dates Referenced Herein and Documents Incorporated By Reference This 4 Filing Date Other Filings

1/31/03

For The Period Ended 3/30/06 4, SC 13D Filed On / Filed As Of 4/3/06

* permalink
* reply

georedd 1 point 5 days ago[+] (0 children)

georedd 1 point 5 days ago[-]

someone else please add whatever Paulson has put his money in since apparently Bloomberg reported he sold all his Goldman stock.

* permalink
* reply

georedd 1 point 5 days ago* [+] (0 children)

georedd 1 point 5 days ago* [-]

Paulson had investments in fund (and still has personal relationships with Chinese people) that dealt with China and right now his plan will bailout forcing banks including Chinese banks who now hold bad mortgage debt securities.

http://www.bloomberg.com/apps/news?pid=20601109&refer=home&sid=a8w9MI4Btco4

"Paulson also sold about $25 million of holdings in a Goldman fund whose sole asset was a stake in Industrial & Commercial Bank of China, the world's largest publicly traded financial institution. The bank raised $22 billion in its initial public offering in October 2006, the world's biggest IPO.

Managing the U.S. relationship with China is an increasingly important part of the Treasury secretary's job. During the Fannie and Freddie crisis in July, Paulson used his credibility with Chinese leaders to reassure them that the U.S. mortgage companies weren't in jeopardy.

Talks With Chinese

I clearly talked with the Chinese through this,'' Paulson says.They've worked with me enough that they knew I wouldn't say it unless I believed it.''

Chinese institutions own more than $30 billion of Fannie and Freddie paper, according to estimates by CLSA Ltd., the Hong Kong-based investment banking arm of France's Credit Agricole SA.

Two-thirds of that, or $20 billion, is owned by Bank of China Ltd., the country's third-biggest lender. China Construction Bank owns the second-largest amount, $7 billion. Spokesmen for Bank of China and China Construction Bank declined to comment.

Paulson has had some success with his attempts to get the Chinese to allow their currency, the yuan, to strengthen against the dollar. In 2005, while Snow was Treasury secretary, the People's Bank of China, the central bank, abandoned a system of fixed exchange rates and began setting a daily ``reference rate'' for the yuan versus the U.S. currency.

The Chinese central bank, which has the largest currency reserves in the world, allows the yuan to fluctuate as much as 0.5 percent on either side of the daily rate. "

* permalink
* reply

georedd 1 point 5 days ago* [+] (0 children)

georedd 1 point 5 days ago* [-]

wow!!!! just WOW!!! Paulson avoided all capital gains tax on his 500 billion sale of Goldman securities by taking a his treasury Government job.

http://www.bloomberg.com/apps/news?pid=20601109&refer=home&sid=a8w9MI4Btco4

"Goldman Shares

Paulson sold his 3.23 million shares in Goldman, worth about $500 million at the time, when he took the Treasury job, according to regulatory filings. He was exempted from paying capital gains tax on the sale of those stakes under a rule meant to avoid penalizing wealthy people who take government jobs and are forced to sell assets. "

WOOOOOWWWWWW! My god what a deal. I suspect we will have a steady stream ofpeopel subject to large capital gains taxes taking and giving up government positions simply to avoid paying capital gains tax. I can't believe this loop hole exists to this degree.

"

* permalink
* reply

georedd 1 point 5 days ago[+] (0 children)

georedd 1 point 5 days ago[-]

Hank Paulson's old college nickname was "hanky Panky" This reference was removed from wikipedia.

http://en.wikipedia.org/w/index.php?title=Talk:Henry_Paulson&diff=prev&oldid=233009891

* permalink
* reply

georedd 1 point 5 days ago* [+] (0 children)

georedd 1 point 5 days ago* [-]

http://www.miamiherald.com/news/politics/AP/story/695796.html " Is it safe to trust a Wall Street veteran with a Wall Street bailout? "

In recent days, there've been few outward expressions of distrust of Paulson in particular. In fact, many said his long reign on Wall Street make him uniquely qualified to deal with today's problems.

snip .. But the conflicts are also visible. Paulson has surrounded himself with former Goldman executives as he tries to navigate the domino-like collapse of several parts of the global financial market. And others have gone off to lead companies that could be among those that receive a bailout.

In late July, Paulson tapped Ken Wilson, one of Goldman's most senior executives, to join him as an adviser on what to about problems in the U.S. and global banking sector.

Paulson's former assistant secretary, Robert Steel, left in July to become head of Wachovia, the Charlotte, N.C.,-based bank that has hundreds of millions of troubled mortgage loans on its books. " "During Paulson's tenure, Goldman was not as big a player in issuing mortgage bonds as two other investment banks that have gone under this year, Bear Stearns and Lehman Brothers.

But the 2005 annual report shows that Goldman was still a significant player. Its trading division, which included the mortgage bonds and complex financial instruments called derivatives, reported pre-tax earnings of more than $6.2 billion, up sharply from $3.5 billion in 2003.

The report also shows that Goldman benefited greatly from the wave that is now being deemed a wave of excess.

Goldman's pre-tax earnings rose from $4.4 billion in 2003 to almost $8.3 billion in 2005. Similarly, its investment banking division had pre-tax earnings leap from $207 million to $413 million.

Paulson's personal fortunes also zoomed in those years.

In 2002, Paulson received $12.1 million in compensation, including a $6.3 million bonus - an improvement over the previous three years when Wall Street accounting scandals unsettled investment banks, including a $1.5 billion settlement Goldman and other banks paid for issuing overly bullish research reports that promoted deals the banks themselves were involved in.

Published reports said Paulson received $30 million in compensation and salary in 2003.

After Paulson left Goldman and mortgage bonds began losing money, the investment bank erased those loses and then some by betting against the very products it had sold, Fortune magazine reported last year."

* permalink
* reply

georedd 1 point 5 days ago[+] (0 children)

georedd 1 point 5 days ago[-]

slightly off topic but who paulson contributed to since 1983 summary Henry Paulson , 62 (bio) US Treasury Secretary; Goldman Sachs chairman, CEO 1998-2006;

NEWSMEAT Power Rank: 81

Election Picks: 38 wins, 22 losses

$336,250* Republican $13,990 Democrat $311,300 special interest total: $661,540
one of the special interests was new American Century Fund. I wonder if this is the same project for a new American century alliance or an Affliate that said before 9/11 in their written manifesto signed by some like Jeb Bush we needed a new pearl harbor to get Americans to do what they thought was necessary. Most were Goldman Sachs political action committee.

http://www.newsmeat.com/ceo_political_donations/Henry_Paulson.php

Henry Paulson , 62 (bio) US Treasury Secretary; Goldman Sachs chairman, CEO 1998-2006;

"NEWSMEAT Power Rank: 81

Election Picks: 38 wins, 22 losses

$336,250* Republican $13,990 Democrat $311,300 special interest total: $661,540 "

* permalink
* reply

georedd 1 point 5 days ago* [+] (0 children)

georedd 1 point 5 days ago* [-]

wow this one says his bailout directly would take horrible assets off goldman's books where Paulson presumably still has his stock.

http://searchingforthetruth.typepad.com/searching_for_the_truth/2008/09/shameless-cronyism.html

" Shameless Cronyism

Henry Paulson made tens of millions of dollars off of the mortgage securitization business when he was at Goldman Sachs. As Treasury Secretary he stood by or actively assisted as Goldman competitors Bear Stearns, Merrill Lynch and Lehman Bros. were permitted to fail or were sold under duress to other institutions. As in the AIG bailout and those of Freddie Mac and Fannie Mae, all of these failures were managed in a way that ravaged shareholders and corporate management, but preserved the interests of counterparties.

After Lehman went down, and Goldman's stock started to plummet indicating it was next in line, Paulson in coordination with the Fed and the SEC immediately banned short selling of financial stocks. Paulson then tries to ram through a $700B giveaway package of taxpayer dollars that would benefit mostly Goldman and Morgan Stanley. He does this just as Congress is wrapping up its session and is ready to go home, and urges that it be passed quickly with no amendments or extended debate, or else the world's financial system will unravel. Media shills report that the system was "a few trades away from complete collapse" until word of the Paulson plan began to spread.

Unlike all of the previous managed collapses and bailouts, this one would remove the distressed assets from Goldman's balance sheet, which would immediately make it much more profitable and cause its stock price to rocket upwards.

Paulson's proposal provided that only he gets to decide who gets the free money and under what conditions, and that no court could review his decisions. He alone would decide which firms would survive and which would not, and under what terms. He adamantly states that "protecting the taxpayer" is his paramount concern. However, at today's Senate hearing he and Ben Bernanke blanched at the thought of requiring Paulson's ex-partners at Goldman to give up any equity to the taxpayer in exchange for this free money.
"

* permalink
* reply

georedd 1 point 5 days ago* [+] (0 children)

georedd 1 point 5 days ago* [-]

wikipedia says he donated 100 million to environmental causes ( wonder if this references his personal foundation that I read about elsewhere which was described as started with a $100 million worth of goldman sachs shares. Starting your own foundation versus actually donating the money to other organizations where you won't have control of it is a very different thing.

(can't find that article now)

http://en.wikipedia.org/wiki/Henry_Paulson

"As an environmental leader and philanthropist, Paulson while at Goldman Sachs, oversaw the corporate donation of 680,000 forested acres on the Chilean side of Tierra del Fuego, which led to criticisms from Goldman shareholder groups [13]. He further donated US$100 million of assets from his wealth to conservancy causes. He pledged his entire fortune for the same purpose at death. [14]"

I would suggest that we concentrate on what he IS DOING rather than what he PLEDGES to do or SAYS he will do .

* permalink
* reply

georedd 1 point 5 days ago[+] (0 children)

georedd 1 point 5 days ago[-]

forbes says in 2006 Paulson had 632 million in Goldman sachs stock.

http://www.forbes.com/lists/2006/12/VY36.html

"Henry M Paulson Jr's Ownership Of Goldman Sachs Group Industry Medians Stock Owned (% of Co) 0.92% 0.34% Stock Owned $632.4 mil $0.05 mil "

* permalink
* reply

georedd 1 point 5 days ago[+] (0 children)

georedd 1 point 5 days ago[-]

http://www.answers.com/topic/hank-paulson

WOW Grassley said Paulson helped him cover his huge payout and was "a snake"

"In 2004 New York State Attorney General Eliot Spitzer announced that he would sue Grasso to recover the $100 million of pension allowance he had received. Grasso filed a $48 million countersuit. He threatened to make Paulson's board service at the NYSE a key issue, claiming that Paulson had never objected to the size of his pay when he was on the compensation committee. Grasso also said Paulson helped him handle the controversy, suggesting he release details of his pay package close to Labor Day 2003 because "the press won't be around" (Newsweek, June 7, 2004). Paulson never disputed his account. For his part, Grasso repeatedly called Paulson a "snake" and said he looked forward to watching him "squirm" during cross-examination.

* permalink
* reply

georedd 1 point 5 days ago[+] (0 children)

georedd 1 point 5 days ago[-]

http://www.answers.com/topic/hank-paulson Paulson is born again:

"While leading Goldman, Sachs, Paulson continued to be a person who professed strong Christian values: "My wife and I try to begin every day by affirming Jesus. Sound ethics and morals have got to be the underpinning—the basis—of everything we do" (Christian Science Journal, May 2000)."

and was leading goldman when goldman was giving bad info to small investors and separate info to large investors *VERY RELEVANT* same article : " Motives Called Into Question

Paulson's position nevertheless raised a few eyebrows. Goldman, Sachs was the leading underwriter of new-economy companies in the heady years leading up to the market bust. Paulson insisted that "if you don't speak out on these things, it could be construed as tacit approval" (New York Times, June 16, 2002).

At the time of his speech, Goldman, Sachs and its primary rivals were being investigated to determine whether their analysts' stock recommendations were influenced by the quest to retain and attract new investment-banking customers. Stocks were being recommended by brokerage houses seeking to distribute those firm's shares in order to win lucrative investment-banking fees from the companies. Doing so meant that the small investor was frequently given biased research, which often led to their losing money. In 2003 New York State found that the 10 brokerage houses had corrupted the stock-research process. As part of a historic settlement, Goldman, Sachs ultimately paid $110 million—less than its main competitors—to settle charges that the investment-banking business influenced research. The 10 brokerage houses had to put a total of $432.5 million into an independent-research fund to finance free research ("Goldman CEO on Enron Effect" (CNNMoney, February 4, 2002).

* permalink
* reply

georedd 1 point 5 days ago[+] (0 children)

georedd 1 point 5 days ago[-]

http://www.nysun.com/business/paulson-may-have-overstepped-on-sivs/66446/ excerpt about inappropriateness of Treasury secretary suggesting private companies do something when he regulates them. Interesting that these companie shave been picked as "in the club" according to CNBC talking heads and indeed they have been the ones to survive and absorb others.

"Meeting with financial industry executives and asking them to contribute to a super fund that he claims will stabilize the sector is a reasonable role for the chairman of Goldman Sachs. The other financial executives may say "Yes" or "No," and a negative response would do no more than disappoint Goldman Sachs.

But a clever private citizen is far different than a government official responsible for the smooth operation of the financial sector. The same overture to join a private fund becomes potentially compromising when made by a government official, particularly one who regulates the banks being solicited to join the fund.

The Treasury Department does not have powers to set up private funds, much less to ask for contributions from private parties. But the Treasury Department regulates Citigroup, Bank of America, JPMorgan Chase, and other banks that might participate in the new SIV fund. Banks are free to choose to disappoint the chairman of Goldman Sachs; they are much less free to disappoint their regulator, the secretary of the Treasury."

* permalink
* reply

georedd 1 point 5 days ago[+] (0 children)

georedd 1 point 5 days ago[-]

wow here is a good one from 2006 saying Paulson should be forced to sell all his gold man stock.

http://www.slate.com/id/2143018/

The Goldman RuleShould new Treasury Secretary Henry Paulson be forced to sell his $700 million stake in Goldman Sachs? By Daniel Gross Posted Tuesday, June 6, 2006, at 11:43 AM ET George Bush with Henry Paulson. Click image to expand.George Bush with Henry Paulson

Henry Paulson, who was recently nominated to be the next treasury secretary, is facing a lot of tough choices. Should the former CEO of Goldman Sachs continue to promote environmental causes in an administration that loathes them? What should he say about the dollar? Should he buy a condo in Washington, or a mansion? Then there's the trickiest question of all: What should he do with the mountain of money he's earned at Goldman Sachs over the years?

Not since Nelson Rockefeller served as vice president during the Ford administration has a senior government official arrived in Washington with such a high net worth. Paulson owns some 4.58 million shares in Goldman Sachs (including restricted stock) worth about $700 million at today's price and surely has millions more in other instruments.

Conflict-of-interest laws say senior government officials can't hold on to investments that could benefit from decisions they might make. Meeting this requirement is comparatively easy for an upper-middle-class secretary of agriculture. Sell your stock in Archer Daniels Midland and direct your financial adviser to avoid it and similar stocks. But for a plutocrat who is about to become secretary of treasury, it's a much more difficult call. He can't choose the default mode that worked so well for former Federal Reserve Chairman Alan Greenspan, who put his cash into government bonds. Treasury secretaries are forbidden from buying government debt—after all, they issue that debt. (The T-bill strategy worked out remarkably well for Greenspan, who saw his net worth rise every time he slashed rates.) And putting the money in the simplest form of investment—a dollar-denominated savings account—would be both a poor investment for Paulson and a potential conflict of interest. After all, treasury secretaries frequently discuss currency exchange rates.

The most likely scenario is that Paulson will sell his Goldman shares and place the money in a blind trust. That would be a smart move, and a profitable one, since he'd gain some tax benefits. When you sell assets to conform to government ethics requirements, the U.S. Office of Government Ethics issues a certificate of divestiture (it's summarized here) that lets you defer capital-gains taxes triggered by the transaction. That will likely save Paulson several million dollars in the next few years. And when your annual salary is falling from $35 million to $183,000, every penny counts. The blind trust would also give Paulson an excuse to dump all his Goldman shares at once and diversify, just as things are getting choppy—something he couldn't do if he stayed on the job.

Once he sells, Paulson—or whoever will manage his blind trust—will have a new problem. In order to qualify for the certificate of divestiture, the cash must be invested in a diversified fund, such as a stock mutual fund. But Paulson's portfolio is so large that it doesn't make sense to put it into a mutual fund, or even into a whole bunch of funds. A nest egg of this size should be broadly diversified—some real estate and a few hedge funds, a few private equity funds, commodities, stocks from all over the world, a private island or two. And of course, all of these have the potential to be affected by Paulson's actions while he is in office.

Given recent activities in Washington, the notion of suggesting that we make exceptions to ethics rules seems highly dangerous. But here's a bold idea: Maybe we should just let Paulson keep his shares. That would be the simplest and least costly thing to do—for him and for the government. The transparency provided by Goldman's daily trading would act as a great inhibitor to favoritism.

What's the worst thing that could happen if Paulson held on to his Goldman stock? It's possible that a government in which the treasury secretary had a gigantic stake in Goldman might recklessly cut marginal income taxes on the very rich so that he and his fellow executives could keep more of their bonuses. Or he might push to cut income taxes on capital gains and dividends so that Goldman employees and clients would pay fewer taxes. He could help enact legislation to reduce and ultimately eliminate the estate tax so Goldman's private banking clients would be able to pass on as much cash to their heirs as they want. Why, such an administration might run up massive deficits so that the bond desks of Wall Street firms like Goldman would have plenty of material to buy and sell! Oh, wait—the Bush administration has already done all that.

* permalink
* reply

georedd 1 point 5 days ago[+] (0 children)

georedd 1 point 5 days ago[-]

http://socraticgadfly.blogspot.com/2008/09/paulson-has-huge-conflict-of-interest.html September 28, 2008 Paulson has HUGE conflict of interest on AIG bailout

His former employer, Goldman Sachs, was AIG’s largest trading partner, allegedly on the hook for $20 billion of risk:

Goldman Sachs was a member of A.I.G.’s derivatives club, according to people familiar with the operation. It was a customer of A.I.G.’s credit insurance and also acted as an intermediary for trades between A.I.G. and its other clients.

What in the way of Goldman stock does Paulson currently own? Did Paulson ever broker any of these intermediary deals? Did he ever write any Goldman paper for AIG?

What does he own at other investment banks, hedge funds, etc.? During bailout negotiations, did Democrats ask for him to disclose more about his finances than he did during his conformation hearings?

Also, per what the story says, why aren’t Office of Thrift Supervision reports made public on this?

As for AIG, this one didn’t even start in America. The story notes its loonier investments came from its London office, under the oversight of a former Drexel Burnham Lambert executive.

* permalink
* reply

georedd 1 point 5 days ago[+] (0 children)

georedd 1 point 5 days ago[-]

pls help crowdsource this in this one thread so we have a great reference palce.

Obviously it is important to know the motivations and conflicts of interest of those who are creating the bailout plan.

Please post any information or articles about where Paulson has his money and where others like Bush have their money and what the net effect of the the new bailout plan might be for their personal interests. Snippets are good . we want a fast resource.

One article I found said that just after taking the Treasury job Paulson created a foundation and put 100 million of Goldman Sachs stock in it to fund it.It also noted that he had an additional 500 million but did not say what those holding were.

Here is an interesting article about the perception of his character willingness to do deals that had conflicts of interest while at Goldman Sachs.

http://www.nixonlibraryfoundation.org/index.php?src=news&prid=129&category=News%2C%20Reviews%20%26%20Commentary "Henry M. Paulson Jr. was just a few years out of business school in 1972 when he landed a coveted job on the White House staff for President Nixon. His friends at the time couldn't believe it. Yes, he had a business degree from Harvard and was also an all-Ivy tackle for Dartmouth, but, after all, he was just 26 and new to the ways of Washington.

"I was the top of my class at Harvard Business School and I was magna cum laude at the law school, and they picked the football player from Dartmouth," said Walter C. Minnick, whom Mr. Paulson beat out for the job and who is now chief executive of a landscaping company in Idaho.

"He was a bulldog, very much like a young Dick Cheney," said Mr. Minnick, who remains one of Mr. Paulson's closest friends. "Hank is a salesman's salesman, and this combination of being tenacious as well as enthusiastic made him very effective."

Indeed, it was this very same blend of wide-eyed vigor and hard-edged ambition that fueled Mr. Paulson's 32 years at Goldman Sachs, pushing him to the top job of perhaps the most widely admired firm on Wall Street and leaving him with a net worth of more than $700 million."

"Mr. Paulson became co-chief executive of Goldman in 1998, shortly before the firm went public. He was one of the first chief executives on Wall Street to recognize the extent to which investment banks could enhance their profit by making big bets with their own capital as opposed to acting as mere intermediaries. And Goldman has had a remarkable string of strong profits. But by stubbornly asserting Goldman's right to invest in, advise on and finance deals, regardless of potential conflicts, Mr. Paulson has also stirred the ire of many on Wall Street who contend that these conflicts, while mostly aboveboard and beyond regulatory approach, are sometimes too clever by half." "During the uproar over Richard A. Grasso's compensation as chairman of the New York Stock Exchange, Mr. Paulson was energetic in coming out against Mr. Grasso's package even though he was on the board that voted in support of it. If the case proceeds to trial, Mr. Paulson is expected to be a central figure."

BTW foundations ARE relevant and here is why - as you may not know foundations are often used by the wealthy as a means to protect family influence for generations while avoiding taxes as charitable institutions. they often employee family members and their sheer size can influence financial interests in areas of commerce. They also often are places that do nothing but spout press releases and "research" that serves the commercial non charitable interests of the family .

* permalink
* reply