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The Bird-Watching Businessman

The Nation

Treasury secretary nominee Henry M. Paulson Jr. chairs the Nature Conservancy as well as Goldman Sachs.

May 31, 2006|Jim Puzzanghera | Times Staff Writer

WASHINGTON — As a three-decade Wall Street veteran and chairman of one of the nation's premiere investment banks, Henry M. Paulson Jr. makes a living watching markets.

But it's his hobby of watching birds that is already causing problems for his nomination as the nation's next Treasury secretary.

An ardent environmentalist, Paulson is expected to be questioned during confirmation hearings about his role as chairman of the Nature Conservancy, and whether he adequately cleaned up the organization's land sale and tax break practices. Another potential sticky issue: a decision by Goldman Sachs, the investment house Paulson heads as chairman and chief executive, to donate 680,000 acres of land in a remote section of Chile to an environmental group with ties to his son.

Although it may create some uncomfortable moments at the witness table, Paulson's involvement as an environmentalist is unlikely to derail his nomination. Nonetheless, it does suggest a maverick is underneath the picture of a pro-administration businessman.

"He just does those things that appeal to him," said longtime friend E. David Coolidge III, managing director of Chicago-based William Blair & Co. "In his position there's lots of options and lots of demands on his time, but instead of doing the things that a lot of Wall Street executives might do, he goes bird-watching."

Although Paulson appears largely in step with fellow Republicans, strongly advocating tax cuts and free trade, he has on occasion chartered an independent course. The Nature Conservancy, for example, supports the Kyoto Protocol, an international treaty to address global warming that the Bush administration opposed.

Asked about Paulson's apparent views on global warming, White House Press Secretary Tony Snow said Bush was "not afraid to have people who disagree with him."

In the aftermath of corporate accounting scandals at Enron and other companies, while many executives griped about proposed burdensome rules, Paulson said the scrutiny was well deserved. To restore investor confidence, he argued, major changes in corporate governance were needed.

As Treasury secretary, Paulson would not only advocate for the administration's tax and trade policies, he also would be a vocal supporter of globalization, not the most popular position to champion in Washington.

"In the U.S., we have benefited more from free trade and global competition than any country in the world," he told the Wall Street Journal in April.

On Monday, Paulson called the United States' market "truly a marvel," but cautioned that the country must take steps to maintain its competitive edge.

But some conservatives said they were concerned about his close ties to environmentalists.

"I'm worried about the access that radical environmentalists would have at Treasury," said Peter Flaherty, president of the National Legal and Policy Center, a conservative nonprofit group.

When rumors of a Paulson nomination surfaced last month, an online alert by the Land Rights Network read: "DANGER!!! The United States Treasury Department may be taken over by The Nature Conservancy's Chairman, Mr. Henry Paulson!!!" It called the Nature Conservancy "the world's most powerful and scandal-plagued environmental group."

Paulson's business career has been less volatile. He has worked at Goldman Sachs since joining its Chicago office in 1974. Since 1999, he has led the firm, which is becoming something of a pipeline for senior executives taking top jobs in Washington.

White House Chief of Staff Joshua B. Bolten worked there. So did Democratic New Jersey Gov. Jon Corzine, who ran the firm along with Paulson before leaving for a successful Senate run. Robert E. Rubin, Treasury secretary in the Clinton administration, also once headed the firm.

Raised on a farm in Barrington, Ill. outside of Chicago, Paulson, 60, grew up wanting to be a forest ranger but changed his mind after leaving to attend Dartmouth College in New Hampshire. At 6 feet 1 and 198 pounds, Paulson became a football star, earning All-Ivy League honors in 1967 as an offensive lineman

After earning his MBA from Harvard University in 1970, Paulson worked in Washington, first as a staff assistant to the Defense secretary and later at the Nixon White House, before leaving for Goldman Sachs.

Paulson rose through the company ranks, earning a reputation for hard work and devotion to clients, sometimes taking helicopters between appointments so he wouldn't waste time in traffic.

He became co-chairman and chief executive officer in 1998, running the firm with Corzine, and led Goldman Sachs through its initial public offering. On Monday, Corzine called his former colleague "an intelligent and diligent businessman."

Paulson's time off is usually spent outdoors. His wife, Wendy, leads bird-watching expeditions in New York's Central Park and around the world. Paulson often travels with her. In 2004, he told Fortune magazine he still loved wild animals, and was partial to snakes.

"He loves to hike, he loves being outdoors, he's a great fisherman and is just real animated any time he's outside," said Nature Conservancy Chief Executive Steven J. McCormick.

Now, Paulson is heading for the wilds of Washington.

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