The largest recipient [of bailout funds] turned out to be just what earlier financial reporters had said was rumored: Mr. Paulsonâ€™s own firm, Goldman Sachs, headed the list.
It was owed $13 billion in counterparty claims. So hereâ€™s the picture thatâ€™s emerging. Last September, Treasury Secretary Paulson, from Goldman Sachs, drew up a terse 3-page memo outlining his bailout proposal. The plan specified that whatever he and other Treasury officials did (thus including his subordinates, also from Goldman Sachs), could not be challenged legally or undone, much less prosecuted. This condition enraged Congress, which rejected the bailout in its first incarnation.
It now looks as if Mr. Paulson had good reason to put in a fatal legal clause blocking any clawback of funds given by the Treasury to AIGâ€™s counterparties.
When is the FBI gonna start prying open Goldman’s books?