|Henry M. Paulson|
July 3, 2006 – January 20, 2009
|President||George W. Bush|
|Preceded by||John W. Snow|
|Succeeded by||Timothy Geithner|
|Born||March 28, 1946
Palm Beach, Florida
|Political party||Republican Party|
|Children||Henry Merritt Paulson III
Amanda Clark Paulson
|Alma mater||Dartmouth College (B.A.)
Harvard Business School (M.B.A.)
In 2008, Time named Paulson as a runner-up for its Person of the Year 2008, saying, with reference to the Global Financial Crisis of 2008: "if there is a face to this financial debacle, it is now his."
He is currently a fellow at Johns Hopkins University's School of Advanced International Studies (SAIS).
 Early life and family
Paulson was born in Palm Beach, Florida, to Marianna (née Gallauer) and Henry Merritt Paulson, a wholesale jeweler. He was raised in Barrington Hills, Illinois, as a Christian Scientist. Paulson attained the rank of Eagle Scout in the Boy Scouts of America.
A star athlete at Barrington High School, Paulson was a champion wrestler and stand-out football player, graduating in 1964. Paulson received his B.A. in English from Dartmouth College in 1968; at Dartmouth he was a member of Phi Beta Kappa and Sigma Alpha Epsilon and he was an All-Ivy, All-East, and honorable mention All American as an offensive lineman.
He met his wife Wendy Judge, a Wellesley College graduate, during his senior year. The couple have two adult children, sports-team owner Henry Merritt Paulson III, more commonly known as Merritt Paulson, and journalist Amanda Paulson. The Paulsons became grandparents in June 2007. They maintain homes in Washington, DC and Barrington Hills.
 Early career
Paulson was Staff Assistant to the Assistant Secretary of Defense at The Pentagon from 1970 to 1972. He then worked for the administration of U.S. President Richard Nixon, serving as assistant to John Ehrlichman from 1972 to 1973, during the events of the Watergate scandal for which Ehrlichman was convicted, and sentenced to prison.
 Goldman Sachs
He joined Goldman Sachs in 1974, working in the firm's Chicago office under James P. Gorter. 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; eventually succeeding Jon Corzine (who went on to become a United States Senator and then 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. His net worth has been estimated at over US $700 million.
Paulson has personally built close relations with China during 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."
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 Commission agreed unanimously to release the major investment houses from the net capital rule, the requirement that their brokerages hold reserve capital that limited their leverage and risk exposure. The complaint put forth by the investment banks was of increasingly onerous regulatory requirements—in this case, not U.S. regulator oversight, but European Union regulation of 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 company of 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 subsidiary holdings by the SEC.
During this repeal of the net capital rule, SEC Chairman William H. Donaldson agreed 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 Treasury Secretary Mr. Paulson proposing 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."
In late September 2008, Chairman Cox and the other Commissioners agreed to end the 2004 program of voluntary regulation.
 U.S. Secretary of the Treasury
Paulson was nominated on May 30, 2006, by U.S. President George W. Bush to succeed John Snow as the Treasury Secretary. On June 28, 2006, he was confirmed by the United States Senate to serve in the position. Paulson was officially sworn in at a ceremony held at the Treasury Department on the morning of July 10, 2006.
Each of Paulson's three immediate predecessors as CEO of Goldman Sachs — Jon Corzine, Stephen Friedman, and Robert Rubin — 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.
Paulson identified 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.
Paulson was known to have persuaded President George W. Bush to allow him to spearhead U.S.-China relations and initiated and led the U.S.-China Strategic Economic Dialogue, a forum and mechanism under which the two countries addressed global areas of immediate and long-term strategic and economic interest.
 Notable statements
In Spring 2007, Secretary Paulson told an audience at the Shanghai Futures Exchange that "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."
In August 2007, Secretary Paulson explained that U.S. subprime mortgage fallout remained largely contained due to the strongest global economy in decades.
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.”
On August 10, 2008, Secretary Paulson told NBC’s Meet the Press that he had no plans to inject any capital into Fannie Mae or Freddie Mac. On September 7, 2008, both Fannie Mae and Freddie Mac went into conservatorship.
 Credit Crisis of 2007-2009
 Lehman's bankruptcy
The support given by Federal Reserve Board, Under Ben Bernake and Treasury, with Paulson at helm, in acquiring of Bear Stearns by J.P Morgan and $200bn facility made available to Fannie Mae and Freddie Mac. There was a great deal of criticism of this decision in congress by both Republicans and Democrats. When Barclay's Bank required support for acquiring Lehman Brothers, both Geithner and Paulson were reluctant. Instead, they pressured Lehman's into chapter 11 bankruptcy, believing the effect wasn't systemic.
"Well, as you know, we're working through a difficult period in our financial markets right now as we work off some of the past excesses. But the American people can remain confident in the soundness and the resilience of our financial system." 
This proved to be a colossal miscalculation, as the money markets began to free-fall between September 15, 2008 and September 19, 2008.
 U.S. government economic bailout 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 which he said were aimed at avoiding a severe economic slowdown. He pushed through the conservatorship of government agency mortgage giants Fannie Mae and 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 2008, Paulson, along with Bernanke, led the effort to help financial firms by agreeing to use US$700 billion dollars to purchase bad debt they had incurred. He faced criticism from economists for initially refusing to consider injecting large amounts of cash into financial institutions directly by purchasing stock, an option which other countries in similar circumstances had pursued. This was the option favored by Bernanke, and the one that was eventually followed.
On September 19, 2008, Paulson called for the U.S. government to use hundreds of billions of Treasury dollars to help financial firms clean up nonperforming mortgages threatening the liquidity of those firms. Because of his leadership and public appearances on this issue, the press labeled these measures the "Paulson financial rescue plan" or simply the Paulson Plan.
With the passage of H.R. 1424, Paulson became the manager of the United States Emergency Economic Stabilization fund.
Documents obtained by government watchdog group Judicial Watch reveal that in an October 13, 2008, meeting with executives from 9 major American banks, Paulson told bankers that they would be forced to accept government bailout money, whether they wanted it or not. One of the documents, a talking points memo, gave bankers the ultimatum: "If a capital infusion is not appealing, you should be aware that your regulator will require it in any circumstance." The logic was that if everybody were forced to accept the money, then doing so would destigmatize the process in an attempt to avoid threatening the already-eroded market confidence in some of the weaker banks.
During the financial crisis, Paulson found time to enjoy a ski vacation in Colorado, where he conducted work involving the nation’s financial crisis over the telephone.
 Conflict of interest claims
It has been pointed out that Paulson's plan could potentially have some conflicts of interest, since Paulson was a former CEO of Goldman Sachs, a firm that may benefit largely from the plan. Economic columnists called for more scrutiny of his actions. Questions remain about Paulson's interest, despite the fact that he had no direct financial interest in Goldman, since he had sold his entire stake in the firm prior to becoming Treasury Secretary, pursuant to ethics law. The Goldman Sachs benefit from AIG bailout was recently estimated as USD 12.9 billion and GS was the largest recipient of the public funds from AIG. Creating the collateralized debt obligations (CDO's) forming the basis of the current crisis was an active part of Goldman Sach's business during Paulson's tenure as CEO. Opponents[who?] argued that Paulson remained a Wall Street insider who maintained close friendships with higher-ups of the bailout beneficiaries. If passed into law as originally written, the proposed bill would have given the United States Treasury Secretary unprecedented powers over the economic and financial life of the U.S. Section 8 of Paulson’s original plan stated: "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." Some time after the passage of a rewritten bill, the press reported that the Treasury was now proposing to use these funds ($700 billion) in ways other than what was originally intended in the bill.
 Career after public service
Since leaving his role as Treasury Secretary, Paulson has joined the Paul H. Nitze School of Advanced International Studies at Johns Hopkins University as a distinguished visiting fellow, and a fellow at the university's Bernard Schwartz Forum on Constructive Capitalism. His memoir, On the Brink: Inside the Race to Stop the Collapse of the Global Financial System, was published by Hachette Book Group on February 1, 2010.
 Civic activities
Paulson has been described as an avid nature lover. He has been a member of The Nature Conservancy for 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 Zemin to preserve the Tiger Leaping Gorge in Yunnan province.
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 University in Beijing; and, previously served as chairman of the influential trade group, the Financial Services Forum.
During his tenure as CEO of Goldman Sachs, Paulson oversaw the corporate donation of 680,000 acres (2,800 km2) on the forested Chilean side of Tierra del Fuego, bringing criticism from Goldman shareholder groups. He further donated to conservancy causes US$100 million of assets from his wealth, and has pledged his entire fortune for the same purpose upon his death.
 Further reading
- Fortune Magazine: Hank Paulson's secret life
- Vanity Fair: Todd S. Purdum on Henry Paulson
- Stewart, James B., "Eight Days: the battle to save the American financial system", The New Yorker magazine, September 21, 2009.
- Paulson, Hank, On the Brink. London, Headline, 2010. ISBN 9780755360543
- ^ Fox, Justin (December 17, 2008). "Henry Paulson - Person of the Year 2008 - TIME". Time.com. http://www.time.com/time/specials/2008/personoftheyear/article/0,31682,1861543_1865103_1865105,00.html. Retrieved September 15, 2009.
- ^ Battle, Robert (August 23, 2006). "untitled". Ancestries of Miscellaneous "Celebrities". Ancestry.com. http://freepages.genealogy.rootsweb.com/~battle/celeb/paulson.htm. Retrieved October 11, 2008.
- ^ Patricia Sellers, 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.
- ^ Townley, Alvin (2007) [December 26, 2006]. Legacy of Honor: The Values and Influence of America's Eagle Scouts. New York: St. Martin's Press. pp. 178–188, 196. ISBN 0-312-36653-1. http://www.thomasdunnebooks.com/TD_TitleDetail.aspx?ISBN=0312366531. Retrieved December 29, 2006.
- ^ Ray, Mark (2007). "What It Means to Be an Eagle Scout". Scouting Magazine. Boy Scouts of America. http://www.scoutingmagazine.org/issues/0701/a-what.html. Retrieved January 5, 2007.
- ^ Belser, Alex (May 31, 2006). "Paulson '68 to lead Treasury". The Dartmouth. http://www.thedartmouth.com/article.php?aid=2006053101010.
- ^ "02138 § Henry Paulson". 02138 - The World of Harvard. http://www.02138mag.com/people/385.htmlM. Retrieved October 11, 2008. "HBS ... MBA 1970"
- ^ a b The Nature Conservancy (2006). Henry M. Paulson, Jr..
- ^ Goldman Sachs (2006). Goldman Sachs Group, Inc - Management.
- ^ a b Forbes (2006). Henry M. Paulson, Jr..
- ^ "US faces global funding crisis, warns Merrill Lynch". The Daily Telegraph (London). July 16, 2008. http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/16/ccusdebt116.xml. Retrieved May 4, 2010.
- ^ "Stephen Labaton, "Agency’s ’04 Rule Let Banks Pile Up New Debt" New York Times, October 2, 2008
- ^ White House (2006). President Bush Nominates Henry Paulson as Treasury Secretary. Retrieved June 29, 2006.
- ^ Associated Press (2006). Senate Approves Paulson as Treasury Secretary.
- ^ White House (2006).President Commends Senate for Confirming Henry Paulson as Treasury Secretary. Retrieved June 29, 2006.
- ^ The Christian Science Monitor August 3, 2006 New Treasury head eyes rising inequality. Retrieved August 3, 2006.
- ^ "Paulson: Social Security Reform Hopes Slim". Reuters, February 3, 2007.
- ^ Hope Now Alliance (October 10, 2007). "HOPE NOW Alliance Created to Help Distressed Homeowners" (PDF). Press release. http://www.fsround.org/media/pdfs/AllianceRelease.pdf. Retrieved September 24, 2008.
- ^ "China Shuns Paulson's Free Market Push as Meltdown Burns U.S.". Bloomberg.com. September 24, 2008. http://www.bloomberg.com/apps/news?pid=20601087&sid=aCl7bFUJzWRk. Retrieved September 25, 2008.
- ^ Lawder, David (August 1, 2007). "Paulson sees subprime woes contained" ([dead link]). The Boston Globe. http://www.boston.com/business/articles/2007/08/01/paulson_sees_subprime_woes_contained/.
- ^ "Treasury Secretary Insists Banks Are Safe". CBS News. July 20, 2008. http://cbs5.com/national/henry.paulson.economy.2.775329.html. Retrieved September 23, 2008.
- ^ Brinsley, John (August 10, 2008). "Paulson Says No Plans to Add Cash to Fannie, Freddie". Bloomsberg Worldwide. http://www.bloomberg.com/apps/news?pid=20601087&sid=aULVZ2mAF9es&refer=home. Retrieved September 23, 2008.
- ^ Lockhart, James B., III (September 7, 2008). "Statement of FHFA Director James B. Lockhart". Federal Housing Finance Agency. http://www.ofheo.gov/newsroom.aspx?ID=456&q1=0&q2=0. Retrieved September 23, 2008.
- ^ James B Stewart, ‘Eight Days – The battle to save the American financial system’ The New Yorker (September 21, 2009) http://www.newyorker.com/reporting/2009/09/21/090921fa_fact_stewart
- ^ ibid
- ^ http://www.slate.com/id/2200291
- ^ Joelle Tessler, Paulson oversees historic government intervention, Associated Press, September 19, 2008
- ^ Krugman, Paul, 'Gordon Does Good', New York Times, Oct 12, 2008
- ^ Muolo, Paul (2009). $700 Billion Bailout (book). New York: John Wiley and Sons. p. 23. ISBN 9780470462560.
- ^ Sahadi, Jeanne (September 19, 2008). "Rescue cost: Hundreds of billions". CNNMoney.com. http://money.cnn.com/2008/09/19/news/economy/paulson_plan_cost/index.htm.
- ^ ""Paulson plan"". Google News search. 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. [not in citation given]
- ^ Lepro, Sara (June 14, 2009). "Documents: Paulson forced 9 bank CEOs into bailout". Associated Press (San Francisco Chronicle). http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/05/14/financial/f060259D69.DTL. Retrieved June 14, 2009.
- ^ http://www.law.com/jsp/cc/PubArticleCC.jsp?id=1202434333481. Retrieved 06/10/2010.
- ^ Herbert, Bob (September 22, 2008). "A Second Opinion?". The New York Times. http://www.nytimes.com/2008/09/23/opinion/23herbert.html?hp. Retrieved October 10, 2008.
- ^ White, Ben (September 19, 2008). "Details of a Rescue Plan Are Unclear, but Some Already Benefit". The New York Times. http://www.nytimes.com/2008/09/20/business/20winners.html?fta=y. Retrieved October 10, 2008.
- ^ http://www.businessweek.com/the_thread/economicsunbound/archives/2009/03/german_and_fren.html#more
- ^ Beck, Rachel (September 23, 2008). "Transparency key to bailout success". Associated Press. http://ap.google.com/article/ALeqM5gca54s0LCP-1CIz0sSK5QWjOCzbgD93CKMNG0. Retrieved September 23, 2008. [dead link]
- ^ Dunbar, John (October 25, 2008). "Uses for $700 billion bailout money ever shifting". Associated Press. http://biz.yahoo.com/ap/081025/meltdown_evolving_bailout.html. Retrieved October 25, 2008.
- ^ Fox News (2009). Ex-Bush Team Acclimates to Private Life. Retrieved August 9, 2009.
- ^ Hachette Book Group
- ^ Somerville, Glenn (May 30, 2006). "Paulson brings Wall Street luster to Treasury". Yahoo! News. http://news.yahoo.com/s/nm/20060530/bs_nm/economy_paulson_dc_3.
- ^ Heilprin, John (June 2, 2006). "A global warming believer in Bush Cabinet". Associated Press. http://www.libertypost.org/cgi-bin/readart.cgi?ArtNum=144182.
- ^ Treasury Nominee Hank Paulson Needs to Answer Some Questions, Human Events, June 13, 2006
- ^ Paulson plans to donate his £410m fortune to environmental causes, The Independent, January 16, 2004
|Wikimedia Commons has media related to: Henry Paulson|
- Paulson's biography from the Treasury Department
- Paulson on China: October 2007, November 2007
- Project Vote Smart - Secretary Henry M. Paulson Jr.
- Henry Paulson's federal campaign contributions
- Paulson book "On the Brink"
|Chairman and CEO, Goldman Sachs
June 1998 – July 3, 2006
John W. Snow
|United States Secretary of the Treasury
Served under: George W. Bush
July 10, 2006–January 20, 2009