WASHINGTON, June 27 /PRNewswire/ -- As politicians and the media fail
to scrutinize Treasury Secretary nominee Henry M. Paulson, Jr., serious
questions about Paulson's actions as CEO of Goldman Sachs are raised in
"The Great Chilean Land Steal?," a new report from the Free Enterprise
Education Institute (http://www.FreeEnterpriser.com).
What was the land deal all about?
In 2002, investment bank Goldman Sachs acquired 680,000 acres in Tierra
del Fuego, Chile from Bellevue, WA-based Trillium Corporation through a
distressed debt auction. Goldman subsequently donated the land to create a
nature preserve. The two environmental groups benefiting from this
transaction -- the Nature Conservancy (TNC) and Wildlife Conservation
Society (WCS) -- both have close personal ties to Goldman CEO Hank Paulson.
Why is this news now?
Shareholder groups only recently uncovered apparent irregularities
surrounding the land deal. These groups have made multiple inquiries since
January 2006 but Goldman continues to leave key questions unanswered. Now
that CEO Paulson has been nominated to head the U.S. Treasury, the American
people have a right to know whether he may have improperly furthered his
personal interests using Goldman assets and whether or not his company,
Goldman Sachs, was fully straightforward about the land deal.
What could be wrong with Goldman donating land for a nature preserve?
In principle, nothing. The shareholder groups' objections aren't based
on Goldman's decision to make a land donation but on Paulson's close
personal ties to these particular beneficiaries; how he may have personally
benefited from the donation; how Goldman may have misrepresented the
donation to shareholders to whom the $35 million asset truly belonged;
conflicting valuations on the land; whether or not Goldman's board
conducted due diligence on the deal; and whether the donation was even the
best conservation outcome for the land in question.
Many observers who hailed the donation do not realize that:
* One month after Goldman announced the land donation, Paulson was
elevated to chairman of The Nature Conservancy (TNC);
* At its March 31, 2006 annual shareholder meeting, Goldman failed to
acknowledge the full role of TNC in the transactions, including a large
payment to the group according to TNC's tax records;
* Paulson's son is a trustee/advisor for WCS, the group that received the
land. WCS also happens to be an "organizational partner" of Paulson's
* Goldman may have made misleading statements on several occasions to
shareholders, media and the public regarding the facts and circumstances
of the land transactions;
* Trillium, the land's owner, had the blessings of independent
conservation experts for a pioneering sustainable forestry project which
would have already preserved 70% of the land;
* Opposition from "deep ecology-inspired" activists delayed Trillium's
project for 9 years and caused the financial strain that made the land
vulnerable to take-over in the first place;
* "Deep ecology" activists believe that there must be a cessation to
* TNC was known to closely follow financing difficulties faced by
companies under fire from activists in Chile and had previously taken
over distressed lands similar to Trillium's;
* A 2005 Colgate University study concluded that the land was neither "of
national park caliber" nor suitable for ecotourism as claimed by
Trillium's environmental opponents and that the blocking of Trillium's
sustainable forestry project was a significant blow to global
* Goldman's intervention may have actually been bad for the environment
since it helped deprive the world of a desperately needed example of
sustainable forestry; and
* Goldman's donation was certainly bad for companies wishing to embrace
"green" business models since it helped undermine a company that had
made a huge investment in much-needed sustainable development.
For more information, read The Great Chilean Land Steal? by the Free
Enterprise Education Institute (http://www.FreeEnterpriser.com).
SOURCE Free Enterprise Education Institute