USW Raises Questions about Treasury's $125 Billion Investment in Financial Firms

Taxpayers Dramatically Overpay for Government Stake in Goldman Sachs and Other Financial Firms

Contact: Toby Kreidler (412) 562-2451

(Pittsburgh) – In a letter sent today to U.S. Treasury Secretary Henry M. Paulson, United Steelworkers (USW) President Leo W. Gerard raised questions about the prudence of Treasury investments of $125 billion of taxpayers’ money into nine financial institutions, including the firm which Paulson recently headed, Goldman Sachs.

An analysis prepared by the Union, which was attached to the letter, uses traditional Wall Street valuation techniques to demonstrate that the Treasury’s investment in Goldman and the other firms was worth approximately half of the price paid and that the other half was a gift to the firms’ shareholders. The analysis was done by comparing Treasury’s investment to one made just twenty days earlier by Warren Buffett.

“This behavior is simply outrageous,” said Gerard. “Half the money is invested and the other half of the public’s money is gifted to institutions after they paid out hundreds of billions in undeserved bonuses and shareholder dividends and engaged in reckless speculation.”

“This is no different than if you paid me $10,000 for a car for which no one else would pay more than $5,000,” writes Gerard. “You bought it for $5,000 and gifted me the other $5,000.”

“In my world such gifts are rarely offered to working people.”

For entire letter and comparison of Berkshire Hathaway and USD Treasury Investments in Goldman Sachs, please click here.

For just the comparison of Berkshire Hathaway and USD Treasury Investments in Goldman Sachs, click here.

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