When Paulson left Goldman Sachs to head the Fed he had to cash out of his Goldman stocks to avoid any conflict of interest (yeah right.) But because of generous rules designed to "not disuade" top Wall St. talent from moving into the public sector, capital gains taxes are waived in this situation! His cash out right before he joined the Fed was $500 million dollars tax free!Paulson filed to sell 3.23 million shares in a shelf offering of Goldman Sachs stock according to a prospectus filed with regulators. Based on the bank's closing price of $152.50 on Thursday, the stock is worth about $492 million.
The banking chieftain is unloading the shares to adhere to conflict-of-interest rules....
Interestingly, under U.S. government ethics rules, while Paulson is required to sell the shares, he is also exempt from paying taxes on any capital gains on the sale if he obtains a certificate of divestiture. The rule granting the exemption is designed to make sure prospective government employees who own a lot of stock are not dissuaded from joining the government. Earlier this week, the Economist magazine estimated the rule eliminate a tax liability of up to about $200 million for Paulson." So the guy who practically pioneered these mortgage related assets while heading Goldman Sachs, and then got a $500 million tax free cash out to go run the Fed where he did nothing to stop the very shell game he helped design, is now going to be granted unlimited power (with no oversight) to "fix" the problem with a blank check from US taxpayers.
Something tells me there aren't going to be any punitive measures against any execs.
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Something tells me there aren't going to be any punitive measures against any execs.
- jim 9-21-2008 5:42 pm