9-25-08 by dugan
Henry Paulson seems to have persuaded Congress that his Wall Street bailout is purely in service of the nation, but a land-conservation deal made by Paulson in 2004, when he was both CEO of Goldman Sachs and a board member of the Nature Conservancy, smacked strongly of conflict of interest. It’s a tale that’s a little off point for OilWatchdog, but since oil prices are already rising in anticipation that Paulson will get his way, there’s a slim connection. Read on, then sign the free "Bailout Watchdog" letter to Congress, demanding better terms for us taxpayers.
The Paulson story shows up in a just-released book by journalist Christine McDonald, "Green Inc., An Environmental Insider Reveals How a Good Cause Has Gone Bad." She makes a strong case that big environmentalism has fallen too deep in the lucrative embrace of Big Business. Here’s the Paulson story, from a chapter titled "The Double Lives of Conservation Leaders."
A conservation land deal made by Henry Paulson, Goldman Sachs chief executive, before he left the post to become Treasury secretary during the George W. Bush administration, was the focus of protest in 2007 by shareholders who objected to a Goldman Sachs land donation to the Wildlife Conservation Society, a group with a relationship to Paulson’s son, Merritt. The company had acquired 680 acres of forestland in Tierra del Fuego, an achipelago off the southernmost tip of South America, at auction as part of a debt portfolio. Instead of treating it as a company asset with valuable timber stocks, the company donated the land to [the Wildlife Conservation Society] and paid The Nature Conservancy nearly $145,000 in consultancy fees in the arrangement. Shareholders were incensed about the deal, because of the apparent personal gain and conflict of interest for Paulson and his son. Merritt Paulson is a member of the Conservation Society advisory board. His father was a member of the [Nature Conservancy’s] board of directors at the time. One month after the land donation took place, Paulson became the chairman of [the conservancy’s] board.
One shareholder protest demanded that Paulson reimburse the company for "any shareholder assets spent to advance his personal interests" and alleged that Goldman Sachs lied to shareholders at its 2006 annual meeting by asserting the Nature Conservancy had been deliberately excluded from the land transaction, despite the appearance of the consulting fee on the conservancy’s tax return.
Paulson may well have thought he was just doing good all around with the land donation, and that helping his son was just incidental, and that $145,000 for the Nature Conservancy was just pay for necessary work. But in the telling, that’s not what the deal looks like.
Paulson no doubt thinks now, as he seeks to shovel $700 billion in taxpayer money to Wall Street, that he is serving only the national good. But Paulson’s cultural background is Wall St., not Main Street. That means Main Street has to protect its own interests in this fast-moving deal. Good reason to sign the Bailout Watchdog letter right away.