01 Oct 2008 An “Ubersecretary Paulson” Would Be a Bad Idea
Free Enterprise Project Says Congress Should Not Invest Excessive Power in Treasury Secretary While Crafting Bailout Bill
Washington, DC – Directors of the Free Enterprise Project at the National Center for Public Policy Research are urging Congress to be wary of placing excessive power in the Treasury Secretary or any other cabinet official as it crafts any “bailout” bill.
The directors, Tom Borelli, Ph.D. and Steve Milloy, MHS, JD, LLM, also say Congress should be wary of placing additional unchecked power in the hands of Treasury Secretary Henry Paulson.
Borelli and Milloy are concerned because:
* … Henry Paulson and Goldman Sachs profited from the subprime mortgage business and the company supported questionable actions by Fannie Mae.
* … Henry Paulson has a history of using his professional power to ‘get back’ at perceived enemies.
* … Henry Paulson ignored conflict of interest and shareholder concerns while at Goldman Sachs by making gifts of Goldman Sachs assets to charities with which he and/or his family members were personally associated.
* …Henry Paulson served as chairman of the Nature Conservancy at the time the green charity lent money to its own executives and sold land to its own trustees. Following a widely-read expose of these and other controversial practices in the Washington Post (see: http://www.washingtonpost.com/wp-dyn/nation/specials/natureconservancy), Paulson himself admitted that “we need to tighten up our oversight and risk management controls…” (Washington Post, March 4, 2004).
“Paulson should not be given more opportunities to punish his enemies and promote his friends,” said Milloy. “Engineering the sale of Bear Sterns at a fire sale price and allowing Lehman Brothers to go bankrupt while making efforts to save Goldman Sachs should raise serious questions about Paulson’s personal agenda. Having served in the Nixon Administration it seems Paulson took careful notes in the creation and execution of an enemies list. Let’s not forget that under Paulson’s leadership Goldman Sachs made millions by creating the mortgage crisis.”
“Given Paulson’s record of using his position to advance his personal agenda should automatically disqualify him from granting him unprecedented power,” added Borelli. “Why should the country trust Paulson with his track record of using distressed debt to support his environmental hobby? If Paulson gave away shareholder assets to support his personal interests just imagine what he would do with the taxpayers’ property.”
In 2006, Borelli and Milloy sent a letter to then-Senate Finance Committee Chairman Charles Grassley (R-IA) and Ranking Member Max Baucus (D-MT) alerting them of a complaint the mutual fund they manage had filed with the U.S. Securities and Exchange Commission requesting “an investigation by the [SEC] Division of Enforcement into potentially false and misleading statements of material facts made by Goldman and its senior management relating to Goldman’s acquisition and disposition of certain real property…” (See: http://freeenterpriseactionfund.com/AFM_submission_to_Senate_Finance.pdf)
Milloy and Borelli also have written a series of articles questioning some Paulson’s practices, including “Treasury Nominee Hank Paulson Needs to Answer Some Questions” (Steve Milloy, Human Events, 6/13/2006 at http://www.humanevents.com/article.php?id=15481), “Hank Paulson Was Thrown Softballs” (Steve Milloy and Tom Borelli, Human Events, 7/03/2006, at http://www.humanevents.com/article.php?id=15865), and “Treasury Nominee Is Ideologically, Ethically Challenged” (Steve Milloy, Human Events, 5/30/2006 , at http://www.humanevents.com/article.php?id=15255).
The government watchdog group National Legal and Policy Center has also questioned Paulson’s record in a series of documents available at http://www.nlpc.org/goldmanSachs.asp.
The Free Enterprise Project is a program of the National Center for Public Policy Research, a non-partisan think-tank established in 1982.