John Paulson: Let Me Clean Up This Mess I Made

Does it count as philanthropy when you give to fix problems from which you have profited in the past? First, John Paulson made a fortune profiting from home foreclosures. Then, he padded his tax returns by giving to a nonprofit that provides financial consulting to prevent investors from making decisions that lead to home foreclosure.

He personally took home $3.7 billion dollars in 2007 by trading subprime mortgages in what popular culture now knows as "The Greatest Trade Ever." That same year, Paulson gave $15 million to the Center For Responsible Lending: a non profit organization dedicated to providing legal aid to help people avoid purchasing death-prone home loans. Congress blew some steam about launching an investigation into a potential conflict of interest, but nothing came of it.

To his credit, Paulson has made other, less questionable philanthropic investments since:

  • In 2009, he and his wife Jenny gave $20 million to NYU's Stern School of Business. $5 million set up the Alan Greenspan Chair in Economics and the John A. Paulson Professor of Finance and Alternative Investments. $11 million bolstered construction and renovations on the campus through the campus's "Concourse Project." Financial aid and scholarships account for the remaining $4 million.
  • In 2010, he gave $15 million to build a maternity hospital in Guayaquil, Ecuador, named for his father Alfred.
  • That same year, the Paulsons pledged an annual €500,000 (about $610,000) for at least three years to a program for exchange students in the art departments at NYU and the Sorbonne in Paris. Carla Bruni, wife of former French president Nicolas Sarkozy, runs the program.

What's next? In the past few weeks, both Reuters and Bloomberg slammed Paulson with negative prophesies about his financial health. Keep in mind, however, that Paulson is worth a breathtaking $15.5 billion. You have to wonder how much someone who just purchased a $49 million ranch from a Saudi Arabian prince actually cares about what the media says.

Assuming Jenny and John Paulson do continue to give more in the future, it appears as though they prefer to do so in large chunks and to causes relevant to NYU.