When Edward C. Forst '82 left Goldman Sachs this summer to become Harvard's first executive vice president, it appeared he had left the finance world behind—until an old friend called.
"We had a fabulous three weeks with him," University President Drew G. Faust in an interview Friday afternoon. "Then the secretary of the treasury called and said I need to draft him to come save the nation."
Forst is helping Secretary of the Treasury Henry M. Paulson, his erstwhile Goldman colleague, draft the controversial $700-billion bailout plan that is currently being considered by Congress, Faust said.
Faust said that though Forst would be in Washington for weeks as a temporary consultant and "can't exactly say when" he'll return, the executive vice president is still plugged into events at Harvard.
"He's still completely engaged here," she said. "He calls me at 11 at night from the Treasury Department and he doesn't get any sleep."
Still, Faust added, plans for potential administrative reorganization—such as whether to keep the vice president for finance position—may be on hold until the crisis abates.
"That decision has not been made yet and it may be postponed slightly," she said, "because he's saving the world."
Forst was not immediately available for comment.
Before coming to Harvard, Forst served as the global head of Goldman's investment management division, joining the bank's elite management company in 2004. He became a Goldman partner in 1998, Paulson's first year leading the firm.
Paulson left Goldman in 2006 to become President Bush's treasury secretary.
Paulson's embattled bailout plan—intended to bolster confidence in faltering U.S. financial institutions—would allow the federal government to purchase up to $700 billion of difficult-to-sell securities in an effort to cleanse the country's ailing financial system.
The proposal for this unprecedented government intervention in the market follows a series of financial shocks in recent weeks, including the failure of Lehman Brothers, the government takeover of mortgage giants Fannie Mae and Freddie Mac, the largest government bailout to date, an $85-billion loan to the American Insurance Group, and most recently, the failure Washington Mutual and its subsequent takeover by federal officials in the largest bank failure in U.S. history.
While the initial response to Paulson's plan was favorable, and key lawmakers had signaled their support, it has taken flack from academic economists and the media in recent days. And despite support from Democrats in Congress, who have reached an agreement with Paulson about the general framework of the bailout, House Republicans have attacked the plan, saying that the legislation unfairly exposes taxpayers to billions of dollars of losses.
—Staff writer Clifford M. Marks can be reached at email@example.com.
—Staff writer Nathan C. Strauss can be reached at firstname.lastname@example.org.