Henry Paulson, the the Treasury Secretary, was accused of bullying Bank of America (BAC) chief executive Ken Lewis, into completing a buyout of Merrill Lynch which subsequently turned into a financial disaster for the bank and almost cost Lewis his job. Paulson's behavior was consider inappropriate by a number of members of Congress.
It turns out the the Lewis matter was not Paulson's only slip. An exclusive report in The New York Times, says that Paulson often talked to the CEO of Goldman Sachs (GS) during the credit crisis. Goldman got TARP bailout money. Paulson was the investment bank's former CEO. The newspaper writes, "Paulson spoke to many Wall Street executives during that period, he was in very frequent contact with Lloyd C. Blankfein, Goldman's chief executive." He obtained waivers from the White House to approve the conversations, but, of course, the content of the calls may never be known.
Paulson's actions during the credit crisis were those of a man who believed that aggressive intervention was the only way to handle a catastrophe that nearly brought down the American financial system. Based on Congressional testimony, Fed chief Ben Bernanke was also active in conversations about Bank of America and other troubled companies. Some in Congress believe that he also crossed the line.
Did Paulson act according to high ethical standards? That may never be known, but his character will be questioned long after he is gone.
Douglas A. McIntyre is an editor at 24/7 Wall St.