Skip to comments.Chuck Schumer fund-raiser John Paulson is key figure in Goldman Sachs fraud case, records reveal
Posted on 04/25/2010 8:30:02 PM PDT by neverdem
WASHINGTON - One of New York Sen. Chuck Schumer's top recent fund-raisers is a key figure in the Goldman Sachs fraud case, a review of federal campaign records reveals.
John Paulson, leader of the $33 billion hedge-fund firm Paulson & Co., helped Democrat Schumer collect nearly $100,000 in the first three months of this year. Schumer is running for a third term in November.
The Securities and Exchange Commission says Paulson's company helped assemble a bunch of bad mortgage securities for Goldman Sachs and bet they would tank, while Goldman found buyers who got soaked for $1 billion.
The SEC has not accused Paulson of wrongdoing, but alleges Goldman knew the securities were risky and misrepresented them to investors.
Paulson's role in the alleged shenanigans has not prompted Schumer to refund the cash from his stockpile of nearly $22 million. But it has rung alarm bells.
"Through the years, our general practice has been to return funds when there is a determination of wrongdoing," said Schumer spokesman Brian Fallon. "That hasn't occurred here, but we will continue to monitor this case."
Paulson has said, "We didn't do anything wrong here." Goldman is fighting the charges.
Schumer, the third-most-powerful Democrat in the Senate and a member of the Finance and Banking committees, is a key player in financial reforms under debate in Congress.
Schumer's camp made it clear that it had no qualms about passing the hat among big-bucks donors who are likely to feel the impact of reforms.
The money - a total of $95,300 from 21 Paulson workers and seven of their spouses - was given in advance for an April 5 fund-raiser at the Friars Club in Manhattan.
A spokesman for the firm would only say that John Paulson held the event because he "supports candidates based on keeping the United States the financial and economic capital of the world."
Paulson was more explicit in an invitation to the cash clutch that was first reported by Politico.com.
Schumer "has been one of the few members of Congress that has consistently supported the hedge fund industry, on important issues such as financial regulation, carried interest \[a lower tax rate for hedge-fund manager profit-sharing\], and investor rights," Paulson wrote.
The senator is hardly the only politician to feel Paulson's love. Andrew Cuomo, the state attorney general and presumed candidate for governor, also has raked in nearly $100,000 from him since 2008, and also does not plan to return it unless Paulson is found to have done wrong, said campaign spokesman Josh Vlasto.
Government watchdogs say relationships like Schumer's with Paulson are all too common - and perfectly legal - in a system in which the rich can buy access to policymakers.
Paulson's donations over the years have tilted Republican, which shows he's focused on money, not on political ideals, said Dave Levinthal, a spokesman for the Center for Responsive Politics.
"This is not about any ideology he has but the bottom line of his financial interests," said Levinthal.
Schumer's top donors have long been Wall Street financiers, but many of them have complained lately that he is turning his back on them after the 2008 economic meltdown.
Schumer crashed Indy Mac bank by spreading a rumor. The company failed.
bout 9 months later John Paulson, Soros, Micheal Dell and JD Flowers together bought the wreckage or Indy Mac.
What did they get?
A mtg bank recapitalized by Uncle Sam.
Billions in tax loss carry fowards into the future.
The Democrat party is a wholly owned subsidiary of Goldman Sachs. Some GOP state AG should indict GS or at least file a civil suit.
Soros, Flowers and Paulson are hedge fund operators who made money by:
1. Shorting Indy Mac as Schumer wiped the company out by rumor. They could have made billions.
2. Buy it on the cheap with Feds recapitalizing it and very little down.
3. Tax loss carry forwards in the billions which are essentially tax credits.
WASHINGTON — The Federal Deposit Insurance Corp. reached a preliminary agreement to sell the remains of IndyMac Bank — one of the biggest bank failures in U.S. history — to a team of high-profile investors, suggesting there is private money willing to invest in troubled banks if the government agrees to shoulder heavy losses.
Bloomberg News/Landov Christopher Flowers The investment team, which includes affiliates of private-equity chieftain Christopher Flowers, hedge-fund investors George Soros and John Paulson, and computer mogul Michael Dell, will contribute $1.3 billion in capital toward a purchase of IndyMac Federal Bank. The investor group and the government also agreed to share losses on IndyMac’s portfolio of troubled mortgages, which will likely reach into the billions of dollars.
(Excerpt) Read more at online.wsj.com ...
I feel dirty just reading this!
Also, if memory serves, Indy Mac was run by conservatives.
I can’t believe there is nobody in NY willing to run against theis vicious, corrupt prick.
Each one of these financial companies were tee’d up by the short hedge funds. Raham and Gorlnick and their buddies at Fannie and Freddie made sure all the crap mortgage risk was in all banks. Caused by CRA lawsuits forcing banks to lend to anyone and everyone.
They all knew the cancer was there and waited until the late summer of 2008 to spring the trap with the hedge funds - Soros, Flowers, John Paulson, Steven Coehen (SAC), David Shaw and others. Hedge funds OWN the senate. Chealsea works at a hedge fund.
Supposedly Larry Kudlow is mulling it over. There’s plenty of time.
When the *#@! are we going to put these crooks in jail where they belong?
And I don’t mean Club Fed, either. Devil’s Island would be too good for them!
Great posts! Chuck Schemer should be in prison.
........that in New York, Both the Gillibrand seat AND the Schumer seat are up for re-election?
Hopefully SOMEDODY will run against Chuckie, as well as for the Gillibrand seat.
Some noteworthy articles about politics, foreign or military affairs, IMHO, FReepmail me if you want on or off my list.
Yes he should be.
I'll drink a gleeful toast like I did when the Liberal Lyin' of the Senate, POS-of-all-Pieces-of-Sh*t - ted kennedy kicked it, and display the same, albeit temporarily, sh*t-eating grin this left-wing, un-American jackal displayed often, when he finally goes (one way or another), and God...
HE NEEDS TO GO!!!!!!!!!!!!!!!!!!!