Secretary Henry Paulson: Is this the person we want devising a program to save Wall Street?

“He also owns options to purchase 680,474 shares of [Goldman Sachs] common stock, all of which [were] exercisable.”
Monday, September 29, 2008

Before we go any further, I don’t have an answer to the question posed by the title.

On one hand, it’s certainly a good idea to have someone with Secretary Paulson’s understanding of finance and our financial institutions handling the current crisis. On the other hand, do we really want someone this close to Wall Street in charge? The same Secretary of the Treasury who, for more than two years, has watched us inch closer and closer to the emergency he now tells us the worst peril for our economy since The Great Depression? Close advisor, maybe, but in charge? The primary source of information about the crisis on the basis of which our Congress is ready to spend $700 billion?

The first of the two enclosed PDFs is the Treasury Department biography for Mr. Paulson.* (I’m giving you the link to the PDF I made, but also to the website which contains the original material.) It confirms that, prior to assuming his current position at Treasury, he “was Chairman and Chief Executive Officer of Goldman Sachs since the firm’s initial public offering in 1999,” and where he had been employed since 1974.

What’s interesting is what the Treasury biography omits, that being any reference to the $492 million of Goldman Sachs stock Secretary Paulson sold when he was confirmed by the Senate, and his other Goldman Sachs-related holdings and options. See the Wall Street Journal “Market Watch” report I’ve included below.** Interesting reading, to say the least. Among other notable details, “He also owns options to purchase 680,474 shares of common stock, all of which [were] exercisable” as of the publication date, June 30, 2006.

Goldman Sachs Group (NYSE: GS) closed on Friday at $137.99. Over the past 52 weeks, Goldman Sachs has traded between $86.31 and $250.70.

So what do you think?

*Link to PDF… PDF Version of Treasury Biography
Link to original source… Original Treasury Biography

**Link to PDF… PDF Version of WSJ Market Watch Report
Link to original source… Original WSJ Market Watch Report


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