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Long IslandPolitics

Fund in Goldman probe gave Cuomo nearly $100,000

John A. Paulson, president of Paulson & Co.

John A. Paulson, president of Paulson & Co. (Dec. 16, 2009) Credit: Rick Maiman

A billionaire hedge fund manager and his firm who have become central figures in the investigation of banking giant Goldman Sachs gave Attorney General Andrew Cuomo nearly $100,000 in political contributions -- but Cuomo says he won't return the money for now.

State campaign records show John A. Paulson -- head of the Paulson & Co. hedge fund mentioned in the Securities and Exchange Commission civil complaint against Goldman Sachs -- joined others in his firm to give money to Cuomo since 2008. Records show the total includes $26,000 directly from Paulson and $55,000 from Paolo Pellegrini, a former hedge fund manager at the Manhattan-based firm.

Paulson's firm was mentioned prominently last week in the SEC civil complaint. It alleged that Goldman deceived clients into buying mortgage securities secretly put together by Paulson's hedge fund, which profited from their decline in value. Goldman denies the charges, and Paulson's firm has not been charged with any wrongdoing.

Political aides to Cuomo, who is expected to seek the Democratic nomination for governor, said he won't be returning any campaign funds from Paulson.

"Like most campaigns, the Cuomo campaign returns funds when there are findings of wrongdoing by a donor, and the Paulson firm has not been accused of any wrongdoing," said Cuomo campaign spokesman Josh Vlasto.

A spokesman for Paulson's firm, Armel Leslie, declined to comment on specific political contributions to Cuomo and other politicians.

A report on Politico.com said that a few weeks before the SEC complaint, Paulson hosted a Manhattan fundraiser for New York Sen. Charles Schumer, whom he called "one of the few members of Congress that has consistently supported the hedge fund industry." The amount raised for or contributed to Schumer was not known.

"John Paulson is a lifelong resident of New York City and supports candidates based on keeping the United States the financial and economic capital of the world," Leslie said. Paulson also owns a 10.4-acre Southampton estate, which he bought last year for $40 million.

A spokesman for Schumer declined to comment Monday on the Politico report.

While Cuomo's office hasn't commented about whether it will be conducting a criminal probe in the Goldman matter, critics of Wall Street's influence in politics say Cuomo should return the money from Paulson if his office decides to jump into this case. The attorney general has the power to bring criminal charges in such matters.

"He should return the money to avoid even the appearance of impropriety if he's close to an investigation," said Robert Weissman, president of Public Citizen, a nonprofit watchdog group in Washington, D.C. He said the question about political contributions from Paulson's firm should be part of a broader public debate about campaign financing and its impact on government oversight of Wall Street.

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