Dartmouth alumnus and investment banker Ken Wilson ’69 retired from Goldman Sachs last week to serve as an advisor to Secretary of the Treasury Henry Paulson ’68, a former Goldman Sachs CEO. The Wall Street Journal first reported three weeks ago that Wilson, who assumed his new post on Thursday, would join the Treasury, but neither Goldman Sachs nor the Treasury Department confirmed the announcement until late last week.
Wilson will serve without pay as a short-term contractor to the Treasury until the end of President George Bush’s term in January 2009 and will provide Paulson with “in-depth analysis on financial markets” as the Treasury responds to current turbulence in the financial sector, Brookly McLaughlin, a Treasury Department spokeswoman, told The Dartmouth on Monday.
“We considered a broad range of people,” McLaughlin said. “Wilson was picked based on his markets expertise and dedication to public service.”
Paulson’s tenure as Secretary of the Treasury has been marked by the collapse of the housing and mortgage markets, prompting the Treasury to work to stabilize financial institutions that invested heavily in mortgages. On July 30, Bush signed a bill authorizing the Treasury to bail out the government-sponsored mortgage companies Fannie Mae and Freddie Mac. These companies, which have lost billions of dollars in recent months, hold more than half of the country’s $12 trillion in mortgage debt.
Wilson’s knowledge of financial institutions will be a valuable resource to Paulson, McLaughlin said. As head of Goldman Sach’s financial institutions group, Wilson helped the company to avoid investing in high-risk subprime mortgages, according to The Wall Street Journal. Such investments had brought other investment banks, such as Bear Stearns, to the brink of bankruptcy.
Wilson has also advised other finance companies hit hard by the mortgage crisis, such as Wachovia and National City Corp, The Journal reported.
Paulson and Wilson first met during their days at the College. Paulson helped to bring Wilson to Goldman Sachs, and the two still go fishing in the Bahamas together every year, The Wall Street Journal reported.
Wilson was waiting to go through airport security when Bush personally called to offer him the job, according to The Wall Street Journal.
“I felt it would be obnoxious to call him Mr. President in an airport security line, so I just called him George,” Wilson said in an interview with The
Wall Street Journal. “I told him I was interested in the job but hadn’t fully thought it through yet.”
Wilson moved to Goldman Sachs in 1998 from the investment bank Lazard, Freres & Co.
He also served as a Special Forces officer during the Vietnam War.