As Felix Salmon argues--conspiracy theories can become conspiracy truths. Take Hank Paulson. He apparently felt no compunction in sharing information with Goldman Sachs and other Wall Streeters, information from which they could have profited (as presented in the last posting).
Maybe there should be rules against the use of "insider information," not just for members of Congress, but for all those people who gain valuable information from their positions of power within the government including the Treasury Secretary.
Ethical standards need to be spelled out and reinforced.
Turns out the 'Government Sachs' conspiracy theorists were right all along
In a shocking article published in Reuters, Felix Salmon confirmed what the so-called conspiracy theorists have said all along: former Secretary of the U.S. Treasury Hank Paulson was giving insider tips to his cronies at Goldman Sachs and other Wall Street titans which directly benefited them.
The article is entitled, “Hank Paulson’s inside jobs,” emphasizing the fact that this wasn’t some one-off lapse of ethics on Paulson’s part, but instead a disturbingly regular practice.
For those who are unaware, Paulson was the CEO and chairman at Goldman Sachs from 1999-2006 and he clearly provided them with actionable information that epitomizes the plague upon our economy, and the greater global economic system, that is crony capitalism.
However, this isn’t quite a brand new revelation given the fact that in October of 2009 Andrew Ross Sorkin exposed that Paulson met with the entire Goldman Sachs board in a hotel suite in Moscow at the end of June 2008.
Salmon covered this at the time, after Sorkin’s book was released, which detailed the meeting held after the Goldman Sachs boys had dinner with Mikhail Gorbachev.
At the time the Treasury chief of staff Jim Wilkinson told Goldman Sachs chief of staff John Rogers, “Let’s keep this quiet,” indicating that despite the fact that the Treasury’s general counsel Bob Hoyt claimed “it wouldn’t run afoul of the ethics guidelines,” they were well aware that wasn’t the case.
Hoyt said that it was acceptable so long as it was solely a “social event”, but unsurprisingly, Paulson didn’t record the so-called “social event” in his official calendar.It is undeniable that these individuals knew very well what they were doing, and clearly they had no misgivings whatsoever.
During the Moscow meeting Paulson spoke of “the need for the government to have the power to wind down troubled firms, offering a preview of his upcoming speech,” according to Sorkin.
This wasn’t just a friend going over a speech with some old pals, as everyone knows the words of the Treasury Secretary heavily affect global markets almost instantly, just like speeches by the likes of Ben Shalom Bernanke, the Chairman of the Board of Governors of the private Federal Reserve.
Getting this kind of information ahead of time is critical, and through Sorkin’s writing it is clear that Paulson enlightened them as to the situation with Lehman Brothers, giving Goldman Sachs an unfair advantage over those who didn’t happen to have someone on the inside.
Read the rest of the article here