The week after Lehman Brothers went bankrupt, Treasury Secretary Paulson called both Goldman Sachs CEO Lloyd Blankfein and a Wachovia director to urge them to consider a Goldman-Wachovia merger, Vanity Fair reports in a press release announcing a book excerpt by Andrew Ross Sorkin that will appear in its November issue:
Sorkin reports that Warren Buffett was also contacted about investing in the merged company, but told a banker at Goldman that it would never happen. "By tonight the government will realize they can't provide capital to a deal that's being done by the former firm of the Treasury secretary with the company of a former vice-chairman of Goldman Sachs and former deputy Treasury secretary," Buffett said. "There is no way. They'll all wake up and realize, even if it was the best deal in the world, they can't do it."
The press release has some interesting stuff, as does a Q and A with Mr. Sorkin on the Vanity Fair site. The Q and A gets into detail about how exactly Mr. Paulson operated: "when Hank Paulson called that Wachovia board member and said, 'You need to strongly consider doing this deal'—those were the words he used—when the board member got off the phone, a lot of people in the room thought, 'Ah, this is not him urging us to do this. This is a command performance.'" It sheds some light on the question raised here earlier "What did the government say or do to give the bosses the impression they were being forced?" As an aside, the New York Times can't be terribly pleased that Mr. Sorkin, who it employs, is breaking this news on the Vanity Fair Web site rather than in its own pages.
