-- Treasury Secretary Henry Paulson is accustomed to making big changes in a hurry.
When he was named chief operating officer of Goldman Sachs in 1994, he had to relocate to Manhattan from Chicago, where the salesman and executive known as "The Hammer" had risen rapidly through the ranks producing new clients for the investment bank.
Within days, his wife, Wendy, had looked at dozens of apartments and narrowed the list to two. Paulson, cellphone pressed to his ear, spent about five minutes apiece striding through the units, signaled his preference, then immediately winged off on an international business trip.
Tuesday, Paulson is spearheading an unprecedented global change as the Bush administration point man for the proposed $700 billion bailout of the U.S. financial industry as the economy reels from the credit crisis sparked by the national real estate slump and spiraling mortgage failure rates. He's scheduled to testify about the plan at a Senate Banking Committee hearing Tuesday.
The plan, crafted with Fed Chairman Ben Bernanke, an academic, softer-spoken Sundance Kid to Paulson's dealmaking Butch Cassidy, has brought him rock-star-like praise, along with mounting questions for the virtually unchecked power over the bailout fund penciled in for the Treasury secretary and his successors.
To hear those who know him tell it, there's no one more suited for the job.
"He's very tenacious," says Peter Fahey, a friend and retired Goldman Sachs partner who has known Paulson from their undergrad days at Dartmouth.
Fahey, noting that Paulson won All-East football honors as an offensive tackle despite an estimated 195-pound frame considered small for the position, cites one key to his friend's success on the gridiron and in professional life: "He does not take no for an answer."
The nation hasn't faced such high financial stakes since the Great Depression after the 1929 stock market crash.
In recent weeks, Lehman Bros. collapsed in bankruptcy. The government bailed out Fannie Mae, Freddie Mac and insurance giant AIG. Bear Stearns and Merrill Lynch were forced into abrupt sales. And credit markets remained all but paralyzed until last week's announcement of the bailout plan seemed to at least temporarily calm the chaos.
The most prominent public face leading Washington's rescue effort is a 62-year-old father of two, former Eagle Scout, Wall Street multimillionaire, teetotaling Christian Scientist and passionate wildlife advocate.
Paulson earned an MBA from Harvard University. He went on to work in the White House and the Defense Department during the waning years of the Nixon administration before landing at Goldman Sachs and rising to the top job.
Paulson successfully led Goldman's transition to a publicly traded company. He also took a personal hand in Goldman's recruiting, ensuring that Northwestern University's Kellogg Graduate School of Management, where he long served on an advisory board, sent many of its top graduates to the investment bank.
"The man really cares about excellence," says Dipak Jain, the school's dean.
Paulson ranked among the highest-paid Wall Street CEOs, collecting about $30 million a year in salary and equity-based compensation in the mid-2000s, says Paul Hodgson at The Corporate Library proxy research firm.
Hodgson criticized several private investment funds that Goldman Sachs set up for executives and their spouses, or entities owned or controlled by employees. In 2006, for instance, Paulson received a $7.4 million distribution from one of the funds, according to Securities and Exchange Commission filings.
The mammoth salary and other Goldman Sachs payouts enabled Paulson and his wife to become one of the nation's top benefactors of wildlife causes. They ranked 18th on The Chronicle of Philanthropy's 2006 list of America's Most-Generous Donors, based on $100 million the couple donated to Goldman Sachs' charitable causes and the Bobolink Foundation, a Chicago organization they founded to aid conservation.
"He's a very keen conservationist," says Peter Jenny, a friend who is CEO of The Peregrine Fund, a group devoted to saving falcons and other raptors.
Paulson, a previous member of the organization's board, has kept favorite photos of the fierce-looking birds in his offices, Jenny says.
He also managed to combine his love of wildlife with his business skill. He chaired The Nature Conservancy, one of the world's largest environmental organizations, when it faced a Senate investigation several years ago after a Washington Post investigation disclosed questionable financial practices by the group.
Paulson cut the size of the board in half to 21 members, revamped the committee structure and made sure all key strategy moves went before the full board, says former COO Stephanie Meeks. "Hank guided the organization through a difficult period," she says. "The Nature Conservancy came out a much stronger organization."
Describing conservation causes as Paulson's true "life's work," Fahey says his friend probably planned to turn to that work full time after his Wall Street career. But in 2006, President Bush sought him for Treasury secretary.
Paulson initially declined. It's not hard to understand why. His immediate Bush administration predecessors in the job, Paul O'Neill and John Snow, had what were widely considered to be minor accomplishments. Paulson agreed to serve only after White House chief of staff Josh Bolten, a Goldman Sachs alumnus, convinced him he'd have real influence over national economic policy.
Since his appointment, Paulson has done just that in a role that is becoming even more important as Bush's low approval ratings and waning presidency limit his effectiveness.
But former SEC chief accountant Lynn Turner contends that Paulson has grabbed responsibilities for securities and investment policy that should be handled by Washington's market regulator, not the Treasury Department.
Additionally, some critics think his failure to pressure China more to loosen its undervalued currency, the yuan, has hurt the economy and contributed to the record U.S. trade deficit with China of $256 billion last year.
"If Paulson had wanted to really do something, he would have been serious about dealing with the Chinese currency issue," says Clyde Prestowitz, founder of the Economic Strategy Institute and a former Commerce Department official during the Reagan administration.
Despite the criticism, Paulson is a financial expert and is persuasive in private meetings, even though he is a sometimes halting public speaker. That can be a drawback as Congress moves closer to a vote on the bailout plan, because the White House lacks a compelling spokesman who can explain the stakes and reassure voters.
On a political level, Democrats and Republicans respect Paulson, who, more than most Bush administration officials, has been willing to reach across party lines to negotiate deals. House Financial Services Chairman Barney Frank, D-Mass., Monday said he is "very impressed" with Paulson's performance.
Target for criticism
But as the financial crisis has dragged on, and the White House has asked Congress to take tougher and tougher votes, some lawmakers' confidence in both Paulson and Bernanke has waned.
Senate Banking Committee Chairman Chris Dodd, D-Conn., is among those who voice concern that the bailout plan would give Paulson and his successors too much power because drafts circulated so far specifically omit any provision for court or congressional oversight.
"The idea that we're going to turn over $700 billion to one individual … is asking an awful lot," Dodd said over the weekend. On Monday, Dodd proposed changes that would limit the bailout to one year instead of two and create an oversight board to keep an eye on Treasury asset purchases and sales.
Even GOP presidential candidate John McCain, while describing Paulson as "a person I admire and respect a great deal," said Monday at a Pennsylvania campaign stop, "Never before in the history of our nation has so much power and money been concentrated in the hands of one person."
"This arrangement makes me deeply uncomfortable. And when we're talking about a trillion dollars of taxpayer money, 'trust me' just isn't good enough," McCain said.
Supporters say Paulson will listen to the criticism, then do what he does best, negotiate a deal that wins approval, however grudging.