Is Paulson a Good Pick? Shareholder Advocates Don't Think So

This morning President Bush named Goldman Sachs CEO Henry Paulson as Treasury Secretary. So far, one conservative group has already come out against Paulson’s nomination. According to the Free Enterprise Action Fund, Paulson has advocated environmental policies in direct conflict with the interests of Goldman Sachs shareholders. These include donations from Goldman Sachs to groups like Nature Conservancy. Paulson is chairman of the board of directors of The Nature Conservancy, co-chairman of the Asia/Pacific Council of The Nature Conservancy and chairman emeritus of The Peregrine Fund Inc.  According to the FEA Fund, shareholders of Goldman Sachs (pdf):

While [Goldman Sachs’] Environmental Policy and Chilean land donation are consistent with, and may promote the agendas of the Nature Conservancy and Wildlife Conservation Society, they may not be consistent with, or promote shareholder value – CEO Paulson’s primary job.

Moreover, we understand that Goldman’s company policies generally prohibit personal interests, including those involving family members, from improperly conflicting with firm business interests. Goldman’s company actions should instead rely on sound business, economic and scientific analyses, and not the personal social and political interests of executives. Such conflicts of interest may reduce shareholder value.

Steve Milloy, director of FEA Fund, said, "President Bush should withdraw the nomination of Goldman Sachs CEO Henry Paulson for Treasury Secretary. While CEO of Goldman Sachs, Paulson oversaw Goldman’s participation in questionable practices including use of Goldman Sachs corporate assets to advance personal and family interests, and involvement in the Fannie Mae scandal. At a time when Republicans in Washington are mired in scandal, Hank Paulson is the last guy I’d want to be Treasury Secretary."