Conflict Of Interest? Report Says Goldman Sachs ‘Among Biggest Beneficiaries’ Of Paulson’s Bailout
Conflict Of Interest? Report Says Goldman Sachs ‘Among Biggest Beneficiaries’ Of Paulson’s Bailout
In making his push to administer the largest federal bailout of Wall Street in history, Treasury Secretary Henry Paulson is seeking unfettered authority. McClatchy poses the question today, “can you trust a Wall Street veteran with a Wall Street bailout?,” referring to Paulson, the former CEO of Goldman Sachs:
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-based bank that has hundreds of millions of troubled mortgage loans on its books.
Goldman Sachs cashed in under Paulson, with earnings in 2005 of $5.6 billion; Paulson made more than $38 million that year. A 2005 annual report shows that “Goldman was still a significant player” in issuing mortgage bonds. The conflict of interest is increasingly clear today, as Bloomberg reports that “Goldman Sachs Group Inc. and Morgan Stanley may be among the biggest beneficiaries” of Paulson’s bailout plan:
Goldman Sachs Group Inc. and Morgan Stanley may be among the biggest beneficiaries of the $700 billion U.S. plan to buy assets from financial companies while many banks see limited aid, according to Bank of America Corp.
“Its benefits, in its current form, will be largely limited to investment banks and other banks that have aggressively written down the value of their holdings and have already recognized the attendant capital impairment,” Jeffrey Rosenberg, Bank of America’s head of credit strategy research, wrote in a report today, without identifying particular investment banks.”
The conflict of interest provides all the more reason for the bailout legislation in Congress to have more stringent oversight that the administration opposes.
The Wonk Room notes six months ago, Paulson claimed, “our banks and investment banks, are strong.”
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Damn. If that picture doesn’t look like a prime James Bond villain…
September 22nd, 2008 at 6:25 pmC’mon people, when BushCo says “Trust Us,” you can take that to the bank.
No literally, that’s ALL you can take to the bank.
September 22nd, 2008 at 6:25 pmNow isn’t that just …cozy??
September 22nd, 2008 at 6:26 pmJohnny B. Goode!
Deep down in Arizona close to Mexico
Way back up in the cactuses where it never snows
There stood an ancient mansion made of gold and wood
Where lived a a corrupt politician named Johnny B Goode
Who’d never learned the difference between Sunni or Shia so well
But he could pretend to chase Osama to the gates of Hell
Go! Go! Go! Johnny!
Go! Go! Go! Johnny!
Go! Go! Go! Johnny!
Go! Go! Go! Johnny!
Go! Go! Johnny B. Goode!
He used to carry his bribe money in a gunnysack
Go sit beneath a tree and count his Keating kickbacks
Old lobbyist on K street would see him sittin’ in the shade
Laughing at the doubletalk and flip flops he made
The people passed him by they would stop and say
Oh my but that little old mummy really hates the gays
Go! Go! Go! Johnny!
Go! Go! Go! Johnny!
Go! Go! Go! Johnny!
Go! Go! Go! Johnny!
Go! Go! Johnny B. Goode!
Once upon time the state of Arizona couldn’t host a superbowl
Because it was legislated by a group of white supremacist trolls
The bigots were led by an angry fascist who was a goose-stepping man
A millionaire, senator who belonged to the Klu Klux Klan
Johnny B Goode was a maverick when it came to recognizing MLK
So the old cracker donned his klan robe and voted against a holiday
Go! Go! Go! Johnny!
Go! Go! Go! Johnny!
Go! Go! Go! Johnny!
Go! Go! Go! Johnny!
Go! Go! Johnny B. Goode!
His mother told him someday you will be an old man
And you will be the leader of a murderous criminal clan
Many people will be blown to bits from miles around
To see you launch the nukes and take us all down
Maybe some day you will make mushroom clouds so bright
Sayin’ “Johnny McCain” pushed the button tonight”
Go! Go! Go! Johnny!
September 22nd, 2008 at 6:33 pmGo! Go! Go! Johnny!
Go! Go! Go! Johnny!
Go! Go! Go! Johnny!
Go! Go! Johnny B. Goode!
Bush: We are gonna fix it real good. Just trust me. All we need is to have the Treasury Sec. given unprecedented powers and no oversight. We will fix it good. Ya’ll trust me right?
Someone ask France if they are not still using those guillotines, can we borrow them?
September 22nd, 2008 at 6:34 pmAlso, any good sales going on for pitchforks and torches?
There is no doubt in my mind, where Paulson´s loyalties lie. He is pushing for the plan as Bush was pushing for the Iraq war. By using politics of fear the ultimate scare tactics they always use. And in my mind there is no doubt about his loyalties either. He needs a job come January and where would that be for a banker?
The price tag for his plans? Much, much more than $700 Billion.
September 22nd, 2008 at 6:38 pmre: #5
Yo Squirrely, you gonna post your little diddy in EVERY subject?
September 22nd, 2008 at 6:39 pmBush is giving Paulson full authority to do what he wants with close to a trillion dollars of taxpayers’ money..even protecting him from courts.
September 22nd, 2008 at 6:46 pmI will not be surprised if I see Henry Paulson picture on the next $100.00 bill one day on one side and Goldman Sach on the other.
Hmm, I’m kind of surprised at that allegation. NOT!
Of course they are going to take care of themselves and their business buddies long before they give two hoots about the US citizen. THAT IS THE WAY THEY ARE, AND WHY THEY ARE WHERE THEY ARE!
Paulson wants to stick us with the equivalent of $2,500+ of debt for every man, woman, and child in this country, and take that money and line the pockets of a select few. These are same select few that are responsible for almost all of this mess. And that is why Paulson wants no controls, no oversight, and no damn questions. He just wants Congress give him the money, shut the hell up, and go away.
“You show me a capitalist, and I’ll show you a bloodsucker.”
September 22nd, 2008 at 6:48 pm–Malcolm X
It strikes me that this isn’t so much a ‘Socialization’ or ‘Nationalization’ of Financial Institutions as has been suggested, but more, with the combination of Paulson’s proposed wording of the law to instantly hand him Congress’ Constitutionally mandated power of the purse and his former position as CEO of Goldman Sachs, this is in fact the Corporatization of our Government…
Fascism.
That word has been thrown around so often recently that it had almost lost meaning to me… until today.
Our future for generations to come lies in the hands of our current elected officials and they have failed much easier tests of principle. I just hope that they snap out of it and see this for what it truly is. Maybe some polls will wake them up. Keep up the outrage!
September 22nd, 2008 at 6:49 pmUnder chimp CEO’s get to keep receiving their exorbitant salaries.
Not if I can help it.
September 22nd, 2008 at 6:51 pmpaulson like cheney they steal all the betterment of their companies.
These repugs are bent on destroying the US or they want some ahole country to take over the US.
paulson should be fired not supported.
September 22nd, 2008 at 6:57 pmthe big grab. here we go again.
September 22nd, 2008 at 6:59 pmWherever there is fear there is stupidity.
Wherever there is fear there is a scam.
September 22nd, 2008 at 7:02 pmUnder NO circumstances should anyone, paricularly a political appointee unaccountable to the voters (and especially a Bush appointee) be given authority that is not reviewable by any court. The potential for abuse is both great and irreversible. Find another solution.
September 22nd, 2008 at 7:05 pmThese crooks will will continue to steal from the taxpayers.
Where is the incentive for doing well?
repugs have screwed up everything
I swear if mcchimpy steals this election there will be hell to pay.
September 22nd, 2008 at 7:07 pmJust another in the list of HUGE transfers of wealth, from most Americans to the few.
September 22nd, 2008 at 7:08 pmThe Wonk Room notes six months ago, Paulson claimed, “our banks and investment banks, are strong.”
The old-tap-on-the-left-shoulder-and-step-to-the-right-game.
How can paulson be so “knowlegable” yet be so wrong, unless paulson is hiding sh1t. This is an excellent method to hid all sorts of wrongdoings.
September 22nd, 2008 at 7:18 pmIf anyone hasn’t yet realized that this is how our government has worked for the past 30 years, then that’s sad. This is how it’s done in this fascist country. There’s a constant revolving door between agri-business and the USDA/FDA, the military contractors and the Pentagon, the banks and the US Treasury.
This is our government and it’s been like this for a long while.
Don’t act surprised when these things happen. Get angry, but don’t be surprised.
September 22nd, 2008 at 7:19 pmWelcome to the Fascist Dictatorship.
September 22nd, 2008 at 7:21 pmHank had to intervene to save Goldman Sachs and Morgan Stanley. People don’t buy credit without “peace of mind”. Coverage comes from credit default swaps.
1n 2007 Wall Street firms’ debt/credit was considered junk. They complained last July when coverage for $10 million in credit reached $100,000 a year.
Last week, the same credit default swap soared to $900,000. That seized up the credit markets. It’s also what’s not being told to the American people.
They don’t want you to know how scared the big money boys are.
September 22nd, 2008 at 7:28 pmCredit markets seize up either way when the cost of peace of mind soars like that. If they past the cost on, interest rates go up 6% overnight. If they don’t provide the coverage, people won’t buy their credit. The credit market collapses in either of those responses.
So the big investment houses are funneling their financial dog food, or Chinese milk, to the American taxpayer.
September 22nd, 2008 at 7:33 pmLet’s see, for over 7 year’s we have had one huge mess after another..For 2 year’s after piss ant palosi and ranting reid got the vote’s they wanted the usual bill of fare is fuss a little then side step and cover for the reich…How do you all think this is going to turn out.? Do you think they are going to cave and give this lieing scum bag a free hand with all the money.? My take is they will bail out everything and give this ass just what he want’s..What should happen is jail time for this guy and no to the bail out…None of us are getting a bail out why should the money changer’s….Blessings
September 22nd, 2008 at 7:36 pmGreetings Comrades:
Do we have an update on our new company, the Peoples’ International Group (PIG) formerly known as AIG?
How about Peoples’ BS, formerly Bear Sterns?
Just checking in on how our “ownership society” is doing this day.
PEACE
September 22nd, 2008 at 7:39 pmHere’s the deal, the big money boys can’t sell their junk to each other anymore. They don’t trust the system. The taxpayer gets to return order to the frightened rich man’s world.
September 22nd, 2008 at 7:42 pmIf you have any questions regarding the large exit funds…
check this one out
http://www.independent.co.uk/news/business/news/fury-at-25bn-bonus-for-lehmans-new-york-staff-937560.html
Get mad, really mad! Who’s your daddy….
September 22nd, 2008 at 7:43 pmThe American bankruptcy court had to agree to allow that $2.5 billion to be used for Lehman bonuses. If it’s sitting in an account, it’s an asset and can be used to settle up with debtors/creditors.
September 22nd, 2008 at 7:47 pmWhile the blood sucking money changing whore’s figure out who get’s all the money we the people are again getting screwed….Time to end all the war’s, don’t bail any of them out and attach all their asset’s….Shut the rat basterd’s down..
Did you all know AIG has 20 billion in cash in off shore account’s they never paid tax on and they to want in on the bail out….There need’s criminal investigation on all this crap..Blessings
September 22nd, 2008 at 8:01 pmThree words: corrupt crony capitalism
September 22nd, 2008 at 8:02 pmSocialist Kleptocracy
September 22nd, 2008 at 8:11 pmPaulson is as trustworthy as Dick Cheney.
September 22nd, 2008 at 8:40 pmI expect the govmit will do a “Junker’s” bailout and come buy all my dead tired inventory. Those sleazy bastards don’t have a clue what real capitalism is.
September 22nd, 2008 at 8:44 pmWell, duh.
I said that Paulson, without oversight, is loke putting the fox in charge of the hen house. And that was before Goldman-Sachs announced their changed status.
It now appears that one of the reasons Paulson doesn’t want oversight is because it could uncover issues from when he was CEO of Goldman’s. Oops.
September 22nd, 2008 at 9:55 pmDear Mr. Paulson,
We are in receipt of your very kind offer to save the world for the paltry sum of one trillion U.S. dollars….in advance. We have also reviewed your requirement that you will be the sole judge of success of in this matter and that your decisions and actions in furtherance of the stated objective is not to be questioned, challenged, or second-guessed.
After careful consideration, it is with our kindest regards that we have decided to tell you to blow it out your ass.
Very truly yours,
The American People
September 22nd, 2008 at 9:57 pmI know it sounds quaint, but the truth is that we still are:
A Nation of Law.
No person is above the law, not even Mr. Paulson.
(Wish Bill-O, who’s so fond of having the read-that-person’s-body-language expert on his show would have her decipher the non-stop blinking of the Secretary. Guess Paulson only blinks when he lies.)
September 22nd, 2008 at 10:04 pmPaulson is a thug in the Bush Crime Family. Enough said.
September 22nd, 2008 at 10:12 pmYes, Goldman Sachs benefits. Their annual cost for credit default swap “coverage” dropped from an outrageous $900,000 for $10 million in debt/mortgage securities to a still too expensive $348,000. If Uncle Sam overpays for volatile credit default swaps, I’ll be upset.
But the big winner from my chair is Bush’s favorite private equity firm, The Carlyle Group. They stand to win 4 ways.
1. Their distressed company fund can buy companies on the cheap.
2. They can buy back affiliate’s mortgage based debt from Uncle Sam for pennies on the dollar. They used $4.6 billion in CMBS to finance their buyout of ManorCare.
3. Thanks to the Fed, Carlyle can now buy larger chunks of commercial banks. This is a form of deregulation in the midst of the bailout.
4. Failed mortgage security fund, Carlyle Capital Corporation, is in the process of being liquidated. How might the bailout help them get the most for their defunct firm’s assets?
I’m sure Carlyle can find more ways to milk the current situation, but I offer these four.
September 22nd, 2008 at 10:42 pmReuters noted Carlyle’s opportunities in a piece this evening:
http://www.nytimes.com/reuters/business/business-us-carlyle.html
The WSJ reported David Rubenstein got his wish with the rule relaxation allowing PEU’s to hold larger chunks of U.S. banks. More disaster capitalism, all because the big boys quit lending to each other….
September 23rd, 2008 at 12:19 amThe NYT has a piece on the Fed bank ownership rule relaxation. Paulson’s ex-number 2, who works for the Carlyle Group, is quoted at the end.
http://www.nytimes.com/reuters/business/business-us-financials-fed-minorities.html
September 23rd, 2008 at 12:23 amThis sounds more and more like “lets scare them into giving us complete control over the Treasury” (screw Congress!)just like we got them to bless our wars in the middle east..lie, scheme, show them phony, photo-shopped pictures and graphs..what ever it takes….”they are stupid..we keep lying and they just keep believing us”…(look how well Cheneys “deferred” Halliburton package has worked out for him…he is a very rich man and it was all legal!!! (after we bent the laws around a bit)
September 23rd, 2008 at 10:53 amHenry M. Paulson
AKA Henry Merrit Paulson, Jr.
Born: 28-Mar-1946
Birthplace: Palm Beach, FL
Gender: Male
Religion: Christian Science
Race or Ethnicity: White
Sexual orientation: Straight
Occupation: Business, Government
Party Affiliation: Republican
Nationality: United States
Executive summary: US Secretary of the Treasury
“Mr. Paulson is very much of an alpha male: he will challenge colleagues to wrestling matches and once halted a game of paddle tennis to vomit before resuming play and winning the match.” The New York Times, 2-Jun-2006.
Wife: Wendy (one son, one daughter)
Son: Henry M. Paulson III
Daughter: Amanda Clark
High School: Barrington High School, Barrington, IL (1964)
University: AB English, Dartmouth College (1968)
University: MBA, Harvard Business School (1970)
US Secretary of the Treasury (10-Jul-2006 to present)
Goldman Sachs CEO (1999-2006)
Goldman Sachs President and COO (1994-98)
Goldman Sachs Investment Banking Executive (1983-94)
Goldman Sachs (1974-2006, as Partner, 1982-2006)
Member of the Board of Goldman Sachs (as Chairman, 1999-2006)
Bilderberg Group
Bill Bradley for President
Bush-Cheney ‘04
Bush-Quayle ‘92
Friends of Roy Blunt
McCain 2000
McCain for Senate ‘98
Millennium Challenge Corporation Board of Directors
National Republican Congressional Committee
National Republican Senatorial Committee
The Nature Conservancy Chairman (-2006)
Volunteer PAC
Phi Beta Kappa Society
Bush Pioneer 2004
Via NNDB:
September 23rd, 2008 at 11:09 amhttp://www.nndb.com/people/788/000117437/
Entity Obama
Goldman Sachs………….$691,930
University of California..$611,207
Citigroup Inc………….$448,599
JPMorgan Chase & Co…….$442,919
Harvard University……..$435,769
Google Inc…………….$420,174
UBS AG………………..$404,750
National Amusements Inc…$389,140
Microsoft Corp…………$377,235
Lehman Brothers………..$370,524
Sidley Austin LLP………$350,302
Moveon.org…………….$347,463
Skadden, Arps et al…….$340,264
Time Warner……………$338,527
Wilmerhale Llp…………$335,398
Morgan Stanley…………$318,070
Latham & Watkins……….$297,400
Jones Day……………..$289,476
University of Chicago…..$278,885
Stanford University…….$276,038
Entity McCain
Merrill Lynch………….$298,413
Citigroup Inc………….$269,251
Morgan Stanley…………$233,272
Goldman Sachs………….$208,395
JPMorgan Chase & Co…….$179,975
AT&T Inc………………$174,487
Blank Rome LLP…………$150,426
Credit Suisse Group…….$150,025
Greenberg Traurig LLP…..$146,787
UBS AG………………..$140,165
PricewaterhouseCoopers….$140,120
US Government………….$137,617
Bank of America………..$129,475
Wachovia Corp………….$122,846
Lehman Brothers………..$117,500
FedEx Corp…………….$113,453
Gibson, Dunn & Crutcher…$104,250
US Army……………….$103,613
Bear Stearns…………..$99,300
Pinnacle West Capital…..$97,700
Open Secrets
October 2nd, 2008 at 1:38 am