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Paulson’s Calls To Goldman Tested Ethics

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http://www.nytimes.com/2009/08/09/business...ml?ref=business

Before he became President George W. Bush’s Treasury secretary in 2006, Henry M. Paulson Jr. agreed to hold himself to a higher ethical standard than his predecessors. He not only sold all his holdings in Goldman Sachs, the investment bank he had run, but also specifically said that he would avoid any substantive interaction with Goldman executives for his entire term unless he first obtained an ethics waiver from the government.

But today, seven months after Mr. Paulson left office, questions are still being asked about his part in decisions last fall to prop up the teetering financial system with tens of billions of taxpayer dollars, including aid that directly benefited his former firm. Testifying on Capitol Hill last month, he was grilled about his relationship with Goldman.

“Is it possible that there’s so much conflict of interest here that all you folks don’t even realize that you’re helping people that you’re associated with?†Representative Cliff Stearns, Republican of Florida, asked Mr. Paulson at the July 16 hearing.

“I operated very consistently within the ethic guidelines I had as secretary of the Treasury,†Mr. Paulson responded, adding that he asked for an ethics waiver for his interactions with his old firm “when it became clear that we had some very significant issues with Goldman Sachs.â€

Mr. Paulson did not say when he received a waiver, but copies of two waivers he received — from the White House counsel’s office and the Treasury Department — show they were issued on the afternoon of Sept. 17, 2008.

That date was in the middle of the most perilous week of the financial crisis and a day after the government agreed to lend $85 billion to the American International Group, which used the money to pay off Goldman and other big banks that were financially threatened by A.I.G.’s potential collapse.

It is common, of course, for regulators to be in contact with market participants to gather valuable industry intelligence, and financial regulators had to scramble very quickly last fall to address an unprecedented crisis. In those circumstances it would have been difficult for anyone to follow routine guidelines.

While Mr. Paulson spoke to many Wall Street executives during that period, he was in very frequent contact with Lloyd C. Blankfein, Goldman’s chief executive, according to a copy of Mr. Paulson’s calendars acquired by The New York Times through a Freedom of Information Act request.

During the week of the A.I.G. bailout alone, Mr. Paulson and Mr. Blankfein spoke two dozen times, the calendars show, far more frequently than Mr. Paulson did with other Wall Street executives.

On Sept. 17, the day Mr. Paulson secured his waivers, he and Mr. Blankfein spoke five times. Two of the calls occurred before Mr. Paulson’s waivers were granted.

I'm sure Paulson acted in the best interest of the American people and never once favoured his old employees.

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http://www.nytimes.com/2009/08/09/business...ml?ref=business

I'm sure Paulson acted in the best interest of the American people and never once favoured his old employees.

From the article:

But according to two senior government officials involved in the discussions about an A.I.G. bailout and several other people who attended those meetings and requested anonymity because of confidentiality agreements, the government’s decision to rescue A.I.G was made collectively by Mr. Paulson, officials from the Federal Reserve and other financial regulators in meetings at the New York Fed over the weekend of Sept. 13-14, 2008.

These people said Mr. Paulson played a major role in the A.I.G. rescue discussions over that weekend and that it was well known among the participants that a loan to A.I.G. would be used to pay Goldman and the insurer’s other trading partners.

This stinks. Paulson should be in jail and Goldman should be closed and disbanded with its assets being seized for the US taxpayer. Goldman was insolvent, it was given a $10bn loan and then actually given for keeps $13bn through AIG. Without the AIG bailout, Goldman was bust!!!!!!!!!!!!!!!

Time for Goldman Sachs to be closed down and all their senior staff to be sent that nice US resort in Cuba - end of story.

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Time for Goldman Sachs to be closed down and all their senior staff to be sent that nice US resort in Cuba - end of story.

Not going to happen anytime, ever!

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"Ethics waiver" :lol:

The very phrase itself tells you all you need to know.

One only needs an ethics waiver when one intends to dump them in the bin.

Similarly a "golden rule" obtains until there is a need to break it - then it's junked.

Competition law works until HBOS needs to be taken over.

No more boom and bust holds true until the bust - which was then someone else's fault.

These guys are all just crooks, liars and fraudsters. Every last single one of them.

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"Ethics waiver" :lol:

The very phrase itself tells you all you need to know.

One only needs an ethics waiver when one intends to dump them in the bin.

Similarly a "golden rule" obtains until there is a need to break it - then it's junked.

Competition law works until HBOS needs to be taken over.

No more boom and bust holds true until the bust - which was then someone else's fault.

These guys are all just crooks, liars and fraudsters. Every last single one of them.

im sorry, all you talk about was before yesterday, and being a voter, I have no recollection whatsoever. Im told today its all solved, thats all that matters.

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