By Robert D. Novak
Monday, October 1, 2007; A19

Eyebrows at the Treasury were raised last Tuesday when Secretary Henry M. Paulson Jr. named a major Democratic fundraiser to an important advisory role. The next day, eyebrows were still elevated when Undersecretary Robert K. Steel participated in an event spearheaded by Bill Clinton's two Treasury secretaries.

A longtime Republican officeholder now in the Bush administration noted these developments and e-mailed a fellow Republican outside the government: "This leads some to wonder whether this Treasury has become the pre-placed Hillary Clinton team." If she is elected president, it is presumed that Clinton will want her own Treasury team. But she cannot be too unhappy with George W. Bush's lineup there.

For a president who in 2001 brought faithful fellow Texans with him to Washington and named Republican activists to key posts, Bush's lame-duck Cabinet has virtual nonpartisans heading three important departments. Defense Secretary Robert Gates is an intelligence professional and career bureaucrat. Attorney General-designate Michael Mukasey spent his career as a prosecutor and judge. But while Gates and Mukasey look like nonpartisan civil servants, Paulson comes across as politically androgynous.

In his third try, Bush found the heavyweight Treasury secretary he desired in multimillionaire investment banker Paulson. The trade-off is that the former Goldman Sachs chief executive does not act or sound much like a conservative Republican to the GOP remnant at the Treasury. "It's not in Hank Paulson's DNA," one official told me. Is he loyal to Bush? "Hank is for Hank," the official replied.

Paulson marched to his own drummer last Tuesday by naming Eric Mindich, chairman of Eton Park Capital Management, to head the asset managers' committee of the President's Working Group on Financial Markets. A former Goldman Sachs colleague of Paulson's, Mindich is a top-level Democratic fundraiser. He was in Sen. John Kerry's inner circle for the 2004 presidential campaign and backs Sen. Barack Obama for 2008.

Republicans in the administration were amazed that the White House acquiesced in appointing a Democratic activist to lead a group "to develop best practices" for asset managers. These critics wonder why President Bush did not ask Paulson why he could not name a Republican financier for this position. I posed the question last week, and a Treasury spokesman replied that "we were looking for somebody who is well respected in the industry" to fill what is "not really a political position." By that measure, no Treasury job can be considered political.

That includes the position of Bob Steel, undersecretary for domestic finance. Last Wednesday, Steel participated in a roundtable discussion on "recent financial market disruptions" at the liberal Brookings Institution. Former Treasury secretary Robert Rubin headed the panel, which included two of his Clinton administration associates: his successor as secretary, Lawrence Summers, and former deputy secretary Roger Altman.

Steel surely did not feel out of place as a Republican stranger in the Democratic paradise at Brookings, for he is no Republican. Brought to the Treasury by Paulson a year ago, Steel is a retired Goldman Sachs vice chairman who worked at the firm with Rubin and Paulson. Federal Election Commission records show no political contributions made by Steel since the 2002 cycle, when he gave exclusively to Democrats (including Sen. Charles Schumer of New York). Steel, who is chairman of the board of trustees of Duke University in Durham, N.C., contributed to the North Carolina Democratic Party and its Senate candidates, Dan Blue and Erskine Bowles.

Although Paulson was a generous Republican contributor and prodigious Bush fundraiser (over $100,000) in the 2004 cycle, his earlier political giving was more varied. He contributed to Bill Clinton in 1992, Democrat Bill Bradley's 2000 presidential campaign, the feminist Emily's List and Wall Street's favorite Democrat, Schumer. Most of the Paulson family's Democratic contributions come from the secretary's wife, Wendy, who has supported Hillary Clinton.

All this was known to Bush in May 2006 when he tapped Paulson as a Treasury chief who would command respect on Wall Street. It should be no surprise, then, that he is regarded in his own administration less as a true Republican secretary than as a transition to the next Democratic Treasury -- a trademark of a lame-duck regime.

¿ 2007 Creators Syndicate Inc.