Group Calls for Senate Finance Committee to Investigate Treasury Secretary-Designate’s Role in $60 Million Land Deal

Washington, D.C. – The National Center for Public Policy Research is calling on the Senate Finance Committee to investigate Goldman Sachs Fund CEO and Treasury Secretary-designate Henry J. Paulson, Jr.’s role in his firm’s $60 million Chilean land deal that concluded in 2004. 

The Washington, D.C. public policy group is calling for an investigation following public allegations by the Free Enterprise Action Fund (FEAF), a mutual fund invested in Goldman Sachs, that two environmental groups with which Paulsen is personally connected benefited from the land deal.  Such action would be a violation of Goldman Sachs’ conflict of interest provision of the firm’s code of ethics. 

FEAF has also charged that Goldman Sachs officers and directors have made false and misleading statements to shareholders about the land transactions in question.  If true, this also would violate the firm’s code of ethics.

Title IV, Section 406 of the Sarbanes-Oxley law – enacted ostensibly to “protect investors by improving the accuracy and reliability of corporate disclosures” – requires a code of ethics to promote, among other things, “honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships.”

The land, for which Goldman Sachs paid $60 million in 2002, involves some 800,000 acres in Tierra del Fuego, Chile.  According to FEAF, the Nature Conservancy received nearly $145,000 in consulting fees out of the land deal while the Wildlife Conservation Society received title to the entire property.  The Nature Conservancy is chaired by Henry J. Paulson, Jr. and his son, Henry Merritt Paulson, III serves as both a member of the Wildlife Conservation Society’s Board of Advisors and on its governing Board of Trustees.

“If these allegations are true, they would raise serious questions as to whether the American people can rely on Henry Paulson to act in the country’s best interest,” said David Ridenour, vice president of The National Center.  “The Senate should fully investigate Mr. Paulson’s possible conflicts of interests and, should it confirm the charges, either his nomination should be withdrawn or his confirmation rejected.”

According to reports, Goldman Sachs officials misled shareholders about the land deal.  At a March 21, 2006 meeting of shareholders, for example, Paulson reportedly sat by while Goldman board member John Bryan “expressly denied that [the Nature Conservancy – TNC] had any role in the Chilean land transactions.”  However, “Bryan’s statement was contradicted by TNC tax records, which indicate that Goldman paid TNC more than $144,000 in consulting fees related to the Chilean land transactions.”

“One has to wonder whether Henry Paulson is capable of separating his personal environmental hobby from his obligation to those he has been entrusted to serve,” said Peyton Knight, director of environmental and regulatory affairs for The National Center.  “If he exploited his positions of power at Goldman and TNC, how can we expect him to behave any differently as Treasury Secretary, when the pressure to appease special interests will be even more intense?”

This isn’t the first time that Paulson’s Nature Conservancy has been linked to questionable land deals. 

In a four-part investigative series in 2003, The Washington Post reported on the organization’s dubious land deals and for-profit ventures.  According to the Post, “The charity engages in numerous financial transactions with members of the Conservancy family…  It has sold choice Conservancy land to past and present trustees through its ‘conservation buyers’ program, which offers steep discounts in exchange for development restrictions.  It has lent cash to its executives, including $1.55 million to its president.”

Paulson joined the Nature Conservancy’s board in 2001.

Mr. Paulson’s nomination is controversial.

As the New York Times recently reported:  “Mr. Paulson… would bring some different views to the administration, including support for more aggressive efforts to deal with global warming than Mr. Bush has supported.” 

Under Paulson’s leadership, both Goldman Sachs and The Nature Conservancy endorsed mandatory emissions caps in an effort to address alleged global warming.  Such restrictions are widely considered economy-crippling measures.

“In one respect, Paulson’s nomination as Treasury Secretary is worse than Harriet Miers’ nomination to the U.S. Supreme Court,” said Ridenour.  “The trouble with Miers was that her views were unknown.  The trouble with Paulson is that his views are known.  The inconvenient truth is that he is Al Gore without the slide projector.”



The National Center for Public Policy Research is a communications and research foundation supportive of a strong national defense and dedicated to providing free market solutions to today’s public policy problems. We believe that the principles of a free market, individual liberty and personal responsibility provide the greatest hope for meeting the challenges facing America in the 21st century.