Tuesday, October 20, 2009

Bizarre: Paulson Held Secret Meeting with Goldman Sachs Board in Moscow

In his new book,Too Big To Fail, Andrew Ross Sorkin has this juicy tale:

When Paulson learned that Goldman’s board would be in Moscow at the same time as him, he had [Treasury chief of staff] Jim Wilkinson organize a meeting with them. Nothing formal, purely social — for old times’ sake.

For fuck’s sake! Wilkinson thought. He and Treasury had had enough trouble trying to fend off all the Goldman Sachs conspiracy theories constantly being bandied about in Washington and on Wall Street. A private meeting with its board? In Moscow?

For the nearly two years that Paulson had been Treasury secretary he had not met privately with the board of any company, except for briefly dropping by a cocktail party that Larry Fink’s BlackRock was holding for its directors at the Emirates Palace Hotel in Abu Dhabi in June.

Anxious about the prospect of such a meeting, Wilkinson called to get approval from Treasury’s general counsel. Bob Hoyt, who wasn’t enamored of the “optics” of such a meeting, said that as long as it remained a “social event,” it wouldn’t run afoul of the ethics guidelines.

Still, Wilkinson had told [Goldman chief of staff John] Rogers, “Let’s keep this quiet,” as the two coordinated the details. They agreed that Goldman’s directors would join him in his hotel suite following their dinner with Gorbachev. Paulson would not record the “social event” on his official calendar…

“Come on in,” a buoyant Paulson said as he greeted everyone, shaking hands and giving bear hugs to some.

For the next hour, Paulson regaled his old friends with stories about his time in Treasury and his prognostications about the economy. They questioned him about the possibility of another bank blowing up, like Lehman, and he talked about the need for the government to have the power to wind down troubled firms, offering a preview of his upcoming speech.
Re-read the last paragraph about what they talked about. For Paulson, scheming with his Goldman cronies is a social event.


  1. "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public."

    Adam Smith said that in 1776.

    What I don't understand is how he knew about Goldman alumni back then!

  2. No question,Paulson is a perfect "Organization Man." But Sorkin seems clueless. In an interview about his book he actually said he believes Paulson saved the US from a Great Depression. Which suggests he is sincere about the title of his book, he actually believes Goldman, et al are too big to fail. Given this attitude his book could be a tiresome repetition of news stories.

  3. Efinancial,

    How do you think Sorkin would've had access to a story like this if the insiders weren't sure he'd be a total dupe patsy that'd write it all up in a positive light afterward?