WASHINGTON -- Eyebrows at the Treasury were raised last Tuesday when Secretary Henry M. Paulson Jr. named a major Democratic fundraiser to an important advisory role. On the next day, eyebrows were still elevated when Under Secretary Robert K. Steel participated in an event spearheaded by Bill Clinton's two Treasury secretaries.
A longtime Republican office holder now in the Bush administration noted these developments and e-mailed a fellow Republican outside the government: "This leads some to wonder whether this Treasury has become the pre-placed Hillary Clinton team." If she is elected president, it is presumed Sen. Clinton will want her own Treasury team. But she cannot be too unhappy with George W. Bush's current lineup there.
For a president who in 2001 brought faithful fellow Texans with him to Washington and named Republican activists to key posts, Bush's lame-duck Cabinet has virtual non-partisans heading three important departments. Defense Secretary Robert Gates is an intelligence professional and career bureaucrat. Attorney General-designate Michael Mukasey spent his career as a prosecutor and judge. But while Gates and Mukasey look like non-partisan civil servants, Paulson comes over as politically androgynous.
In his third try, Bush found the heavyweight Treasury secretary he desired in multi-millionaire investment banker Paulson. The tradeoff is that the former Goldman Sachs CEO does not act or sound much like a conservative Republican to the GOP remnant at the Treasury. "It's not in Hank Paulson's DNA," one official told me. Is he loyal to Bush? "Hank is for Hank," he replied.
Paulson marched to his own drummer last Tuesday by naming Eric Mindich, chairman of Eton Park Capital Management, to head the Asset Managers' Committee of the President's Working Group on Financial Markets. A former Goldman Sachs colleague of Paulson's, Mindich is a top-level Democratic fundraiser. He was in Sen. John Kerry's inner circle for the 2004 presidential campaign and backs Sen. Barack Obama for 2008.
Republicans in the administration were amazed that the White House acquiesced in appointing a Democratic activist to lead a group "to develop best practices" for asset managers. These critics wonder why President Bush did not ask Paulson why he could not name a Republican financier for this position. I posed the question last week, and a Treasury spokesman replied that "we were looking for somebody who is well respected in the industry" to fill what is "not really a political position." By that measure, no Treasury job can be considered political.
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