The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled-dry American empire, reads like a Who's Who of Goldman Sachs graduates.

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Precise details of the deal couldn't be learned. Some on Wall Street think Goldman could buy $1 billion of the tax credits, which would allow the bank to offset a portion of its profit. It is unclear how much of a discount Goldman is offering to pay. One person familiar with the potential transaction said Goldman could line up other investors for the deal as well.

Nearly every major business decision at Fannie Mae and Freddie Mac is vetted or directed by the government. Officials at both firms have complained about their contradictory missions -- they are at once private companies and tools of public policy.

The Goldman talks are emblematic of these conflicts: A deal that could help Fannie Mae might also be politically unpalatable.

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The Treasury Department has purchased $45.9 billion in preferred stock in Fannie Mae since it took over the company last year to pump money into the firm, giving taxpayers a substantial stake in the firm.

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A key issue will be how much of a discount Goldman plans to pay for the tax credits, especially if the terms are seen as generous to the bank.

Washington officials are likely to look at the deal with a skeptical eye. One reason: Approving it could further the perception that policy makers have taken steps in the last year that aided Goldman above other banks. For many in Washington still in the grip of populist fervor, Goldman has become a symbol of how Wall Street's recovery has outpaced that of Main Street, at taxpayer expense.

The Federal Reserve waived normal rules to allow Goldman and Morgan Stanley to quickly become bank holding companies last year, protecting them from some of the financial-market trauma that befell Bear Stearns and Lehman Brothers. The government injected $10 billion into Goldman through the Troubled Asset Relief Program. The bank was also helped by the bailout of American International Group Inc., through contracts Goldman had with the giant insurer.

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"As we see American workers' dreams of retirement being delayed and postponed and vanquished, and we see them losing their homes, as we see them losing their small businesses, we see record profits over at Goldman Sachs," Rep. Luis Gutierrez (D., Ill.) told Treasury Secretary Timothy Geithner at a congressional hearing Thursday.

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