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Paulson calls to Blankfein before government bailout
10.08.09
Former US Treasury Secretary Hank Paulson spoke to Goldman Sachs' chief executive, Lloyd Blankfein, two dozen times in the week last September when insurer American International Group, Goldman's trading partner, was bailed out with government funds, it emerged over the weekend.
Details of the calls, revealed by the New York Times, will increase speculation that Paulson acted to protect Goldman, where he had been chief executive, ahead of rivals like Lehman Brothers, who collapsed.
Goldman received $13 billion (£7.8 billion) in taxpayer money as a result of the AIG bailout. It has since bounced back to record profits of $3.4 billion in the second quarter of the year.
Goldman said: “Given what was happening in the world, it would have been shocking if such conversations hadn't taken place.”
The New York Times reports that Paulson talked to Blankfein far more often than to other Wall Street bosses. Paulson spent 32 years at Goldman before becoming Treasury Secretary in 2006.
He recently told congress that he “operated very consistently within ethics guidelines”.
Reader views (2)
As with the ex bush administration, anything coming out of the mouth of any executive of goldman should be treated with utmost suspicion. In fact, as the default, I would treat anything they say as conflicting with the truth unless proven independently otherwise.
- Ralph, London
What a surprise and the bank run by the most unpopular man on Wall St goes under.
- Alex C, London
