Hold Paulson Accountable

John Berlau, who directs the Center for Investors and Entrepreneurs at the Competitive Enterprise Institute, has a great op-ed on Henry Paulson, President Bush’s disastrous Treasury Secretary.

It begins:

As much as President Obama is criticized, legitimately, for federal meddling in business and dictating who should serve on the auto industry boards, conservatives and others must never forget that it was Bush administration Treasury Secretary Henry Paulson that made the federal government go where it had never gone before in its dealing with private corporations. It was heartening that the House Oversight and Government Reform Committee has now held a bipartisan hearing in which Paulson was at last held to some account.

The fact is, Paulson exceeded his authority as Treasury Secretary on numerous occasions. When the government took over AIG in September, longtime company leader Hank Greenberg was locked out of negotiations, and Paulson replaced AIG’s CEO with Edward Liddy, who Paulson served with on the board of Goldman Sachs when Paulson was CEO.

[…] Paulson strongly pressured healthy banks to take government money and give the government ownership stakes in the institutions, implicitly threatening negative regulatory actions if they didn’t take the deal. […]

But the most disturbing allegation is the one that the committee explored regarding Paulson and others including Federal Reserve Chairman Ben Bernanke pressuring the Bank of America CEO to deceive his shareholders and not report the extent of losses at Merrill Lynch at the time BofA was considering acquiring it. […]