Monday, November 17, 2008

Grassely's Probe of Ex-Goldman Execs at Treasury Could Lead Directly to Paulson

Obviously, the political winds have shifted, Senator Chuck Grassely is calling for an investigation of ex-Goldman execs at Treasury. FT reports:

A senior Republican senator is seeking an investigation into potential conflicts of interest among former Goldman Sachs executives serving at the US Treasury and whether any officials exceeded their authority by implementing a controversial tax change without the approval of Congress.

Chuck Grassley, the most senior Republican on the Senate finance committee, asked Eric Thorson, inspector-general of the Treasury, to investigate the "independence" of several Treasury officials who formerly worked at Goldman Sachs and serve as advisers to Treasury secretary Hank Paulson, the former chief executive of the Wall Street bank.

Mr Grassley said in a letter to Mr Thorson that there was reason to be concerned that “relationships” between the officials and board members at two merging banks, Wells Fargo and Wachovia, gave the “appearance of preferential treatment”.

Mr Grassley singled out Robert Steel, a former Goldman official who worked under Mr Paulson at the Treasury before he became chief executive of Wachovia...

Mr Grassley, who has a reputation for aggressively uncovering and pursuing tax evasion, has a previous working relationship with Mr Thorson, who served as chief investigator for the Senate finance committee and whom Mr Grassley once praised for having “integrity and courage”.
Since ex-Goldman CEO and current Treasury Secretary Paulson signed and approved the tax change, this investigation is headed right at Paulson.

For background on this developing story, read my October 6 post, Pigs At The Trough: Behind The Citigroup, Wachovia, Wells Fargo Circus.

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