Former U.S. Treasury Secretary Henry Paulson talked often to the head of Goldman Sachs at the height of the credit crisis but did not actively seek to help the bank he once ran, a spokeswoman for Paulson said on Saturday.

The New York Times on Saturday reported records of two dozen conversations between Paulson and Goldman chief executive Lloyd Blankfein the same week last September that rival bank Lehman Brothers collapsed and insurer American International Group -- closely connected to Goldman -- was rescued with public funds.

Goldman was a major beneficiary of the AIG bailout, receiving nearly $13 billion in counterparty payments ultimately funded by taxpayers, according to AIG disclosures in March.

The company insists that it was fully collateralized and hedged against those positions in the event of an AIG failure, so it had no material economic exposure to the bailout.

Paulson's spokeswoman Michele Davis confirmed the telephone conversations with Blankfein took place but denied Paulson had any intention of helping Goldman specifically.

Suggesting that AIG was saved for the sake of one firm is as ridiculous as saying firemen put out a fire in a skyscraper to protect just one of the thousands of people in the building, Davis said in a statement.

Goldman has come under fire from some lawmakers and public interest groups 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.


Paulson asked Treasury and White House lawyers for a waiver from an ethics ban on contacting his former firm, as officials feared that Wall Street was facing a total collapse.

The Times said the waiver was granted on September 17, the day after the AIG bailout was announced and the day after he received a phone call from Blankfein.

Following Lehman's failure and the acquisition of Merrill Lynch (by Bank of America) that prevented its failure, officials feared the same crisis of confidence might spread to the remaining investment banks, Morgan Stanley and Goldman Sachs, Davis said.

If Morgan Stanley were to fail, Secretary Paulson and the other regulators believed that Goldman Sachs, as the last remaining investment bank, might fail as well.

If the government needed to intervene on Goldman, Paulson needed to be able to actively engage in finding a solution, she added.

The September 16-21 telephone records, which the Times said it obtained under a Freedom of Information Act request, showed that Paulson spoke much more frequently with Blankfein than he did other Wall Street executives during a week in which the world stood on the brink of financial collapse.

He spoke with John Mack, CEO of Morgan Stanley, which was in a more tenuous situation, 12 times over the same period.

Paulson and Blankfein spoke three times before the waivers were granted and five times on September 17, the New York Times said.

Paulson spent 32 years at Goldman Sachs and preceded Blankfein as CEO before becoming Treasury secretary in 2006.

The records also show frequent phone calls with Timothy Geithner, the current Treasury secretary who was head of the New York Federal Reserve, Fed Chairman Ben Bernanke, and congressional leaders.

A Treasury Department spokeswoman declined to comment.

Davis said the volume of calls to Blankfein reflected in part the need to keep abreast of market developments such as frozen money market mutual funds and address a crisis of confidence in the remaining investment banks.

A Goldman spokesman told the New York Times that Blankfein spoke with the Paulson about Lehman Brothers' troubled London operations and disarray in the money markets.

At a July 16 congressional hearing, lawmakers angrily asked Paulson to explain changes in U.S. 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.

(Additional reporting by Glenn Somerville; Editing by Eric Beech)