The U.S. Secretary of Shady Land Deals

Judith Burns of Dow Jones’ MarketWatch reports on the latest shareholder activism from our friends Steve Milloy and Tom Borelli over at the Free Enterprise Action Fund:

Goldman [Sachs’] donation of 680,000 acres of remote Chilean forest in 2004 continues to chafe the pro-business Free Enterprise Action Fund, which says the gift hasn’t benefited Chile or Goldman shareholders. Fund managers, who raised concerns about the deal at Goldman’s 2006 meeting, petitioned the Wall Street investment bank on Friday to have its board review the gift next year as part of a broader study of Goldman’s “sustainability” projects.


Goldman’s decision to donate the land to a preservation group appears “inconsistent with its own environmental policy,” which calls for creating value for shareholders through market-based approaches, including sustainable forestry, according to the Free Enterprise Fund petition. It also questions the value to shareholders from the deal, saying the tax deduction Goldman received is far less than the $150 million of annual revenues that might have been possible under a “sustainable” forestry plan. Chile itself would be better off with such an approach, which would have brought jobs and industry to a depressed local economy, the petition states.

At the center of this questionable land deal is the former chairman of both Goldman Sachs and The Nature Conservancy, current Treasury Secretary Henry Paulson. We made a point of raising similar concerns about Paulson in May, during his confirmation.