In Troubled Times, Paulson Seeks Out Old Friends

Critics of Henry Paulson's effort to put together a financial bailout worry that the Treasury secretary is getting too much of his advice from aides who were his colleagues at Goldman Sachs, where he was the CEO before joining the Bush administration in 2006. Paulson has recruited three former Goldman execs—Ken Wilson, Ed Forst and Dan Jester—in recent weeks to help him create and execute a bailout plan. A fourth, retiree Steven Shafran, is one of Paulson's "senior advisers." Treasury spokeswoman Michele Davis said Wilson and Jester joined Treasury as advisers in August; Forst, who left Goldman this summer to become a senior administrator at Harvard, joined Paulson's crisis squad in September. "This is a time when the American people need all the experts at Treasury that they can get," Davis said, adding that the ex-Goldmen are getting paid "de minimis" as "contractors."

Administration critics expressed concern that Paulson's team is heavy with Wall Street expertise but short on Main Street perspective. A senior commercial banker, who asked for anonymity discussing bailout politics, said that the relationship between the investment business, which will be a major beneficiary of any bailout, and the Treasury team is "very incestuous." A GOP congressional adviser, who also asked for anonymity, said Paulson's Goldman-heavy kitchen cabinet "narrow[s] their window of input." Democrats also have close ties to Goldman. Ex-Treasury secretary Robert Rubin, a top adviser to Barack Obama, was the investment firm's co-chairman until 1993. According to OpenSecrets.org, the Obama campaign has received about $690,000 from Goldman-affiliated donors. The Obama campaign says it "receives advice from a wide range of economic experts."