Ethical questions raised about Paulson’s actions during crisis
He was often in contact with Goldman chief
NEW YORK - Before he became Treasury secretary in 2006, Henry M. Paulson Jr. agreed to hold himself to a higher ethical standard than his predecessors. He sold all his holdings in
But today, seven months after Paulson left office, questions are being asked about his part in decisions last fall to prop up the teetering financial system with taxpayer dollars, including aid that benefited his former firm.
Last month in Washington, answering questions from members of Congress about his relationship with Goldman, Paulson testified: “I operated very consistently within the ethic guidelines I had as secretary of the Treasury.’’
He added that he had asked for a waiver involving his interactions with the bank “when it became clear that we had some very significant issues with Goldman Sachs.’’ Copies of two waivers he received - from the White House counsel and the Treasury Department - show they were issued on Sept. 17, 2008.
That was a day after the government agreed to lend $85 billion to the
While 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 Paulson’s calendars acquired by The New York Times through a Freedom of Information Act request. During the week of the AIG bailout alone, they spoke two dozen times, far more frequently than Paulson did with other Wall Street executives.
Michele Davis, a spokeswoman for Paulson, said Federal Reserve officials, not Paulson, had played the lead role in shaping and financing the AIG bailout.
But Paulson was closely involved in decisions to rescue AIG, according to two senior government officials who requested anonymity.
Ethics specialists said the circumstances of Paulson’s waivers were troubling.
“I think that when you have a person in a high government position who has been with one of the major financial institutions, things like this have to happen more publicly and they have to happen more in the normal course of business rather than privately, quietly, and on the fly,’’ said Peter Bienstock, the former executive director of the New York State Commission on Government Integrity.
