Hedge Funds Politics & Regulation

Congressman questions if Paulson helped charity to goose subprime bet

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A $15 million 2007 donation to help homeowners fight foreclosure is now the subjection of an investigation.

The House Committee on Oversight and Government Reform is investigating Paulson & Co.’s relationship with the Center for Responsible Lending, to which the firm donated $15 million in 2007 to help homeowners fight off foreclosure, but which may have helped the organization expand activities that could have enhanced the profits of Paulson's subprime bets.

The committee is investigating Paulson’s ties to the CRL, as it believes that the organization helped escalate the subprime mortgage debacle. In a May 26 letter to John Paulson (PDF of letter here), Darrell Issa (R –CA), the Congressional committee’s ranking member,