Former U.S. Treasury Secretary Henry Paulson had frequent conversations with Goldman Sachs Group Inc's chief executive during last fall's financial crisis, raising questions about his ties to his former firm, according to a New York Times report.
Paulson, a former CEO of Goldman Sachs, spoke much more often with Goldman CEO Lloyd Blankfein than with other executives, the report said, according to entries in Paulson's calendars that the paper acquired through a Freedom of Information Act request.
According to the report, Paulson said he asked for an ethics waiver for his interactions with Goldman when it became clear that we had some very significant issues with Goldman Sachs.
On September 16, 2008, the U.S. government agreed to loan $85 billion to insurance giant American International Group. Goldman was a major beneficiary of the government's rescue of AIG.
Copies of two waivers Paulson received, from the White House counsel's office and the Treasury Department, show they were issued on the afternoon of September 17, 2008, according to the report.
The newspaper said Paulson's calendars show he received a call from Blankfein the morning of September 16. The next day, Paulson called Blankfein five times, including two calls that were made before the waivers were granted, according to the report.
Paulson's schedules from 2007 and 2008 show that he spoke with Blankfein 26 times before receiving a waiver, according to the New York Times. The report said the two men spoke 24 times from September 16 to September 21.
A spokeswoman for Paulson did not immediately provide a comment on Saturday afternoon. A spokeswoman for Goldman Sachs could not immediately be reached for comment. A Treasury Department spokeswoman declined to comment on the article.
In the report, Paulson's spokeswoman, Michele Davis, said the ethics agreement Paulson agreed to when he joined Treasury did not prevent him from talking to Goldman executives in order to keep abreast of market developments. She also said in the report that the firm never received special treatment from Treasury and that Paulson kept a proper regulatory distance from his old firm.
A Goldman spokesman said in the report that Blankfein spoke with the Paulson about Lehman Brothers' troubled London operations and disarray in the money markets.
Goldman has come under fire for its government connections, seemingly sailing through a deep recession shortly after accepting $10 billion of taxpayer bailout money and benefiting from a host of other government programs, including access to the U.S. Federal Reserve's borrowing window.
At a July 16 hearing, lawmakers angrily asked Paulson to explain changes in administration policy during the crisis and said he had conflicts of interest in decisions involving Wall Street firms.
I operated very consistently within the ethics guidelines I had, Paulson said.
(Reporting by Jessica Wohl; Editing by Eric Beech)