Interesting Reading: Paulson’s ’06 Ethics Agreement And ’08 Goldman Waiver


Earlier today we told you about the near-constant phone contact between then-Treasury Secretary Henry Paulson and his successor as Goldman Sachs CEO, Lloyd Blankfein, during the height of the financial crisis last September.

Now, we’ve obtained from the Treasury Department Paulson’s ethics agreement, in which he pledged not to participate in matters involving Goldman Sachs, and the waiver to that agreement granted by White House counsel Fred Fielding. You can read the agreement here and the waiver here.

Of the dozens of phone calls between Paulson and Blankfein, 26 occurred before Paulson requested and obtained a waiver to deal with matters relating to Goldman Sachs, the New York Times reported Sunday. The content of the calls is unknown. But two were the morning of Sept. 17, a day after the AIG bailout, which ultimately handed Goldman $13 billion of taxpayers’ money — before Paulson obtained the ethics waiver.

In Paulson’s ethics agreement, written after President Bush plucked him from Goldman to be Treasury Secretary, all but two of eight pages mention Goldman. He concludes it by saying “these steps will ensure that I avoid even the appearance of a conflict of interest.”Paulson pledged: “As a prudential matter, I will not participate in any particular matter involving specific parties in which The Goldman Sachs Group, Inc. (“Goldman Sachs”) is or represents a party for the duration of my tenure as Secretary of the Treasury, unless my participation is in accordance with 5 CFR 2635.502(d).”

(That section of the federal code allows for exemptions to be granted under certain circumstances.)

The ethics waiver of September 17, 2008, signed by White House counsel Fred Fielding, allowed Paulson to participate in matters relating to Goldman. Fielding concludes — “prudential matters” apparently aside — that Paulson’s interest in the Goldman pension plan “is not so substantial as to be likely to affect the integrity of your services to the Government.”

Paulson pledged in his ethics agreement: “I will not participate in any particular matter that directly and predictably affects Goldman Sachs’ ability or willingness to pay its obligations under the Pension Plan to me, unless I first obtain a waiver or a regulatory exemption applies.”

While selling his stock in Goldman, Paulson kept his Goldman pension benefits when he became Treasury Secretary.

The Times reported that Paulson “specifically said that he would avoid any substantive interaction with Goldman executives for his entire term unless he first obtained an ethics waiver,” but it’s not clear when or where this promise was made.