Infobox US Cabinet official
name=Henry M. Paulson
United States Secretary of the Treasury
term_start=July 3, 2006
George W. Bush
John W. Snow
birth_date=birth date and age|mf=yes|1946|03|28
Dartmouth College, Harvard University
Republican (United States)
Henry Merritt "Hank" Paulson Jr. (born March 28, 1946) is the
United States Treasury Secretaryand member of the International Monetary FundBoard of Governors. He previously served as the Chairmanand Chief Executive Officerof Goldman Sachs.
Early life and family
Born in Palm Beach,
Florida, to Marianna Gallaeur and Henry Merritt Paulson, a wholesale jeweler, [cite web
accessmonthday= |accessdaymonth= |accessyear= |author= |authorlink= |coauthors= |year= |month= |format=
work=Ancestries of Miscellaneous "Celebrities"
pages= |language= |doi= |archiveurl= |archivedate= |quote= ] he was raised in
Barrington Hills, Illinois. He was raised as a Christian Scientist. [Patricia Sellers, [http://www.pbs.org/wsw/news/fortunearticle_20031229_01.html Hank Paulson's secret life, The CEO of Goldman Sachs is passionate about banking. But he's also obsessed with snakes, tarantulas, and coral reefs.] , Public Broadcasting Service, "Wall Street Week with Fortune" feature, December 29, 2003.] Paulson attained the rank of Eagle Scout in the Boy Scouts of America.cite book | last = Townley | first = Alvin | authorlink = | coauthors = | origdate= 2006-12-26|url= http://www.thomasdunnebooks.com/TD_TitleDetail.aspx?ISBN=0312366531| title = Legacy of Honor: The Values and Influence of America's Eagle Scouts | publisher = St. Martin's Press| location = New York| pages= pp. 178-188, 196| id = ISBN 0-312-36653-1 |accessdate= 2006-12-29] cite web | last = Ray | first = Mark | authorlink = | coauthors = | year =2007 | url =http://www.scoutingmagazine.org/issues/0701/a-what.html | title =What It Means to Be an Eagle Scout | format = | work =Scouting Magazine| publisher =Boy Scouts of America | accessdate = 2007-01-05]
A star athlete at Barrington High School, Paulson was a champion wrestler and stand out football player, graduating in 1964. Paulson received his
Bachelor of Artsin English from Dartmouth Collegein 1968; [cite news | last=Belser | first=Alex | title=Paulson '68 to lead Treasury | date=May 31, 2006 | publisher=The Dartmouth | url=http://www.thedartmouth.com/article.php?aid=2006053101010] at Dartmouth he was a member of Phi Beta Kappaand Sigma Alpha Epsilonand he was an All Ivy, All East, and honorable mention All Americanas an offensive lineman.
He met his wife Wendy during his senior year. The couple have two adult children, Henry Merritt III and Amanda Clark, and became grandparents in June 2007. They maintain homes in
Washington, DCand Barrington Hills, Illinois.
In 1970 Paulson received a
Master of Business Administrationdegree from Harvard Business School. [cite web
title=02138 § Henry Paulson
accessmonthday= |accessdaymonth= |accessyear= |author= |last= |first= |authorlink= |coauthors= |date= |year= |month= |format=
work=02138 - The World of Harvard
publisher= |pages= |language= |doi= |archiveurl= |archivedate= |quote=HBS ... MBA 1970 ]
Paulson was Staff Assistant to the
Assistant Secretary of Defenseat The Pentagonfrom 1970 to 1972.The Nature Conservancy (2006). [http://www.nature.org/pressroom/leadership/art11950.html Henry M. Paulson, Jr.] .] He then worked for the administration of U.S. President Richard Nixon, serving as assistant to John Ehrlichmanfrom 1972 to 1973.
Goldman Sachsin 1974, working in the firm's Chicagooffice for Manmeet Taneja. He became a partner in 1982. From 1983 until 1988, Paulson led the Investment Banking group for the Midwest Region, and became managing partner of the Chicago office in 1988. From 1990 to November 1994, he was co-head of Investment Banking, then, Chief Operating Officer from December 1994 to June 1998; [Goldman Sachs (2006). [http://www.gs.com/our_firm/investor_relations/financial_reports/docs/prospectus_usa_multipage/USA/Management.html Goldman Sachs Group, Inc - Management] .] eventually succeeding Jon Corzine(now Governor of New Jersey) as its chief executive. His compensation package, according to reports, was US$37 million in 2005, and US$16.4 million projected for 2006.Forbes (2006). [http://www.forbes.com/lists/2006/12/VY36.html Henry M. Paulson, Jr.] .] His net worth has been estimated at over US$700 million.Paulson has personally built close relations with Chinaduring his career. In July 2008 it was reported by " The Daily Telegraph" that: "Treasury Secretary Hank Paulson has intimate relations with the Chinese elite, dating from his days at Goldman Sachs when he visited the country more than 70 times." [ [http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/16/ccusdebt116.xml US faces global funding crisis, warns Merrill Lynch - Telegraph ] ]
Tenure at and later relationship with Goldman Sachs
In 2004, at the request of the major Wall Street investment houses, including
Goldman Sachs, then headed by Paulson, the U.S. Securities and Exchange Commissionagreed unanimously to release the major investment houses from the net capital rule, the requirement that their brokerages hold reserve capital that limited their leverageand risk exposure. The complaint that was put forth by the investment banks was of increasingly onerous regulatory requirements -- in this case, not U.S. regulator oversight, but European Union regulationof the foreign operations of US investment groups. In the immediate lead-up to the decision, EU regulators also acceded to US pressure, and agreed not to scrutinize foreign firms' reserve holdings if the SEC agreed to do so instead. The 1999 Gramm-Leach-Bliley Act, however, put the parent holding companyof each of the big American brokerages beyond SEC oversight. In order for the agreement to go ahead, the investment banks lobbied for a decision that would allow "voluntary" inspection of their parent and subsidiaryholdings by the SEC.
During this repeal of the net capital rule, SEC Chairman
William H. Donaldsonagreed to the establishment of a risk management office that would monitor signs of future problems. This office was eventually dismantled by Chairman Christopher Cox, after discussions with Paulson. According to the New York Times, "While other financial regulatory agencies criticized a blueprint by Mr. Paulson, the [new] Treasury secretary, that proposed to reduce their stature — and that of the S.E.C. — Mr. Cox did not challenge the plan, leaving it to three former Democratic and Republican commission chairmen to complain that the blueprint would neuter the agency." [ [http://www.nytimes.com/2008/10/03/business/03sec.html "Stephen Labaton, "Agency’s ’04 Rule Let Banks Pile Up New Debt"] New York Times, October 2, 2008]
In late September 2008, Chairman Cox and the other Commissioners agreed to end the 2004 program of voluntary regulation.
Treasury Secretary nomination
Paulson was nominated by U.S. President
George W. Bushto succeed John Snow as the Treasury Secretary on May 30, 2006. [White House (2006). [http://www.whitehouse.gov/news/releases/2006/05/20060530.html President Bush Nominates Henry Paulson as Treasury Secretary] . Retrieved June 29, 2006.] On June 28, 2006, he was confirmed by the United States Senateto serve in the position.Associated Press (2006). [http://www.nytimes.com/aponline/washington/AP-Treasury-Paulson.html?hp&ex=1151553600&en=852ed97a977c03e0&ei=5094&partner=homepage Senate Approves Paulson as Treasury Secretary] .] Paulson was officially sworn in at a ceremony held at the Treasury Department on the morning of July 10, 2006.
Paulson's three immediate predecessors as CEO of
Goldman Sachs— Jon Corzine, Stephen Friedman, and Robert Rubin— each left the company to serve in government: Corzine as a U.S. Senator (later Governor of New Jersey), Friedman as chairman of the National Economic Council(later chairman of the President's Foreign Intelligence Advisory Board) under President George W. Bush, and Rubin as both chairman of the NEC and later Treasury Secretary under President Bill Clinton. [White House (2006). [http://www.whitehouse.gov/news/releases/2006/06/20060628-4.html President Commends Senate for Confirming Henry Paulson as Treasury Secretary] . Retrieved June 29, 2006.]
Acts as Treasury Secretary
Paulson has quickly distinguished himself from his two predecessors in the Bush administration by formally identifying the wide gap between the richest and poorest Americans as an issue on his list of the country's four major long-term economic issues to be addressed, highlighting the issue in one of his first public appearances as Secretary of Treasury. [
The Christian Science MonitorAugust 3, 2006 [http://www.csmonitor.com/2006/0803/p03s03-usec.html New Treasury head eyes rising inequality] . Retrieved August 3, 2006.]
Paulson has conceded that chances were slim for agreeing on a method to reform Social Security financing, but said he would keep trying to find
bipartisansupport for it. " [http://newsmax.com/archives/articles/2007/2/2/212410.shtml Paulson: Social Security Reform Hopes Slim] ". Reuters, February 3, 2007.]
He also helped to create the
Hope Now Allianceto help struggling homeowners during the subprime mortgage crisis. [cite press release |title= HOPE NOW Alliance Created to Help Distressed Homeowners |url= http://www.fsround.org/media/pdfs/AllianceRelease.pdf |publisher= Hope Now Alliance|date= 2007-10-10 |accessdate=2008-09-24]
Views Expressed by Paulson as Secretary of the Treasury
In Spring 2007, Secretary Paulson told an audience at the
Shanghai Futures Exchangethat "An open, competitive, and liberalized financial market can effectively allocate scarce resources in a manner that promotes stability and prosperity far better than governmental intervention." [ cite news |title = China Shuns Paulson's Free Market Push as Meltdown Burns U.S.| url = http://www.bloomberg.com/apps/news?pid=20601087&sid=aCl7bFUJzWRk| publisher = Bloomberg.com| date = 2008-09-24 | accessdate = 2008-09-25]
In August 2007, Secretary Paulson explained that U.S. subprime mortgage fallout remained largely contained due to the strongest global economy in decades. [Citation| last =Lawder | first = David | title = Paulson sees subprime woes contained | newspaper = The Boston Globe| date =August 1, 2007 | url =http://www.boston.com/business/articles/2007/08/01/paulson_sees_subprime_woes_contained/]
On July 20, 2008, after the failure of
Indymac Bank, Paulson reassured the public by saying, “it's a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation.” [ cite news |title = Treasury Secretary Insists Banks Are Safe| url = http://cbs5.com/national/henry.paulson.economy.2.775329.html| publisher = CBS News| date = 2008-07-20 | accessdate = 2008-09-23]
On August 10, 2008, Secretary Paulson told NBC’s Meet the Press that he had no plans to inject any capital into
Fannie Maeor Freddie Mac. [cite news| first =John | last = Brinsley | title = Paulson Says No Plans to Add Cash to Fannie, Freddie |url =http://www.bloomberg.com/apps/news?pid=20601087&sid=aULVZ2mAF9es&refer=home| publisher = Bloomsberg Worldwide| date =August 10, 2008 | accessdate = 2008-09-23] On September 7, 2008, both Fannie Mae and Freddie Mac went into conservatorship. [ cite news | first = James B., III | last = Lockhart | title = Statement of FHFA Director James B. Lockhart | url = http://www.ofheo.gov/newsroom.aspx?ID=456&q1=0&q2=0 | publisher = Federal Housing Finance Agency | date = 2008-09-07 | accessdate = 2008-09-23]
Leader of U.S. government economic bailout efforts of 2008
Paulson was the designated leader of the Bush administration's efforts in 2008 to nationalize the cost of bad loans made by financial institutions.
Through unprecedented intervention by the U.S. Treasury, Paulson led government efforts to avoid a severe economic slowdown. He pushed through the
conservatorshipof government agency mortgage giants Fannie Maeand Freddie Mac. Working with Federal Reserve Chairman Ben Bernanke, he influenced the decision to create a credit facility (bridge loan & warrants) of US$85 billion to American International Group so it would avoid filing bankruptcy.
In late September of 2008, Paulson, along with Ben Bernanke and
Christopher Cox, led the effort to help financial firms by agreeing to use US$700 billion dollars to purchase bad debt they had incurred. [Joelle Tessler, [http://news.yahoo.com/s/ap/20080919/ap_on_bi_ge/financial_meltdown_paulson;_ylt=AhIiQHKdYKHlbVj1pF.kj99v24cA Paulson oversees historic government intervention] , Associated Press, 2008-09-19] Discussing his decision to take action, Paulson said: “It just happened dramatically. There was only one way that we could reassure the markets and deal with a very significant and broad-based freezing of the credit market. There was no political calculus. It was overwhelmingly obvious.” [cite news |first=Peter |last=Baker |authorlink= |coauthors= |title=A Professor and a Banker Bury Old Dogma on Markets |url=http://www.nytimes.com/2008/09/21/business/21paulson.html |work=New York Times |publisher= |date=2008-09-20 |accessdate= ]
On September 19, 2008, Paulson called for the U.S. government to use hundreds of billions of Treasury dollars to help financial firms cleanup nonperforming mortgages that threaten the liquidity of those firms. [cite news |first=Jeanne |last=Sahadi |authorlink= |coauthors= |title=Rescue cost: Hundreds of billions |url=http://money.cnn.com/2008/09/19/news/economy/paulson_plan_cost/index.htm |work=CNNMoney.com |publisher= |date=2008-09-19 |accessdate= ] Due to his leadership and public appearances on this issue, the press labeled these measures the "Paulson financial rescue plan" or simply the Paulson Plan. [ cite news |title = "Paulson plan"| work =
Google Newssearch |url=http://news.google.com/news?hl=en&as_epq=&as_oq=&as_eq=&num=100&lr=&as_filetype=&ft=i&as_sitesearch=&as_qdr=all&as_rights=&as_occt=any&cr=&as_nlo=&as_nhi=&safe=off&q=paulson-plan&um=1&ie=UTF-8&sa=N&tab=wn ]
With the passage of
H.R. 1424, he became the manager of the United States Emergency Economic Stabilization fund.
Conflict of interest claims
Some have suggested Paulson's plan may potentially have some conflicts of interest, since Paulson is the former CEO of
Goldman Sachs, a firm that may benefit from the plan. [cite web
last = Herbert
first = Bob
authorlink = Bob Herbert
title = A Second Opinion?
publisher = "
The New York Times"
url = http://www.nytimes.com/2008/09/23/opinion/23herbert.html?hp
accessdate = 2008-10-10] Paulson has no direct financial interest in Goldman, however, since he sold his entire stake in the firm prior to becoming Treasury Secretary, pursuant to ethics law. [cite web
last = White
first = Ben
title = Details of a Rescue Plan Are Unclear, but Some Already Benefit
publisher = "
The New York Times"
url = http://www.nytimes.com/2008/09/20/business/20winners.html?fta=y
accessdate = 2008-10-10] The proposed bill would give the United States Treasury Secretary unprecedented powers over the economic and financial life of the U.S.. Section 8 of Paulson’s plan states: “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.” [cite news |first=Rachel |last=Beck |authorlink= |coauthors= |title=Transparency key to bailout success |url=http://ap.google.com/article/ALeqM5gca54s0LCP-1CIz0sSK5QWjOCzbgD93CKMNG0 |work=Associated Press |publisher= |date=2008-09-23 |accessdate=2008-09-23]
Paulson has been described as an avid nature lover. [cite news | last=Somerville | first=Glenn | title=Paulson brings Wall Street luster to Treasury | date=May 30, 2006 | publisher=Yahoo! News | url=http://news.yahoo.com/s/nm/20060530/bs_nm/economy_paulson_dc_3] He has been a member of
The Nature Conservancyfor decades and was the organization's board chairman and co-chair of its Asia-Pacific Council. In that capacity, Paulson worked with former President of the People's Republic of China Jiang Zeminto preserve the Tiger Leaping Gorgein Yunnanprovince.
Paulson is also on the Board of Directors of the
Peregrine Fund; was the founding Chairman of the Advisory Board of the School of Economics and Management of Tsinghua Universityin Beijing; and, previously served as chairman of the influential trade group, the Financial Services Forum.
Notable among the members of Bush's cabinet, Paulson has said he is a strong believer in the effect of human activity on
global warmingand advocates immediate action to decrease this effect. [cite news | last=Heilprin | first=John | title=A global warming believer in Bush Cabinet | date=June 2, 2006 | publisher=Associated Press | url=http://www.libertypost.org/cgi-bin/readart.cgi?ArtNum=144182]
As an environmental leader and philanthropist, Paulson while at Goldman Sachs, oversaw the corporate donation of 680,000 forested acres on the Chilean side of Tierra del Fuego, which led to criticisms from Goldman shareholder groups [ [http://www.humanevents.com/article.php?id=15481 Treasury Nominee Hank Paulson Needs to Answer Some Questions] ,
Human Events, 2006-06-13] . He further donated US$100 million of assets from his wealth to conservancy causes. He pledged his entire fortune for the same purpose at death. [ [http://www.independent.co.uk/news/business/news/paulson-plans-to-donate-163410m-fortune-to-environmental-causes-432346.html Paulson plans to donate £410m fortune to environmental causes] , The Independent, 2004-01-16] He has also been considered someone who can influence world and business leaders to think beyond the bottom line. [Mark Brandon. [http://sustainablelog.blogspot.com/2006/06/environmental-cred-for-bush-treasury.html Environmental Cred for Bush Treasury Nominee] , Sustainable Log ( Blogspot)]
* [http://www.pbs.org/wsw/news/fortunearticle_20031229_01.html Fortune Magazine: Hank Paulson's secret life]
* [http://www.theglobeandmail.com/servlet/story/RTGAM.20060530.wpaulsonside0530/BNStory/Business AP story: Paulson picks bird watching over golf]
* [http://www.ustreas.gov/organization/bios/paulson-e.html Paulson's biography from the Treasury Department]
* Paulson on China: [http://china.usc.edu/ShowArticle.aspx?articleID=827 October 2007] , [http://china.usc.edu/ShowArticle.aspx?articleID=844 November 2007]
* [http://www.vote-smart.org/bio.php?can_id=68484 Project Vote Smart - Secretary Henry M. Paulson Jr.]
* [http://www.newsmeat.com/ceo_political_donations/Henry_Paulson.php Henry Paulson's federal campaign contributions]
###@@@KEY@@@###U.S. Secretary box
John W. Snow
start= July 10, 2006
president= George W. Bush
department= Secretary of the Treasury
NAME=Paulson, Henry Merritt "Hank"
United States Secretary of the Treasury
DATE OF BIRTH=March 28, 1946
PLACE OF BIRTH=
Palm Beach, Florida, United States
DATE OF DEATH=
PLACE OF DEATH=
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