Not a good day for the Kasich campaign.
The Columbus Dispatch (R-Ohio) details how in 2002 Lehman Bros. used it’s Columbus office manager, John Kasich, and his political connections to attempt to take over the entire management of the PERS and State Police and Fire pensions.
“John’s work at Lehman Brothers wasn’t focused on the public sector but on helping entrepreneurs and private companies raise capital to expand and grow,” Rob Nichols, a Kasich campaign spokesman, said in the statement. “At the request of a New York-based colleague, he was glad to help arrange two introductory meetings, and then his colleagues took things from there.”
In 2002, Kasich was one of nine Lehman Brothers executives who spoke to the Ohio Police and Fire Pension Fund about the company absorbing the pension’s bond portfolio, which had been managed by another firm, according to the pension fund. Documents don’t detail Kasich’s role in the discussions, but a pension fund spokesman confirmed that Lehman did not get any business as a result.
Kasich’s campaign said his efforts then did not lead to state pension funds investing with Lehman Brothers in later years, which ended in multimillion losses.
However, Lehman Bros. didn’t walk away completely empty-handed either. At some point, Lehman Bros. did get work managing certain investments for these pension funds.
According to state records, the Lehman holdings of OPERS declined in value from $441.4 million in 2007 to $73.3 million at the end of 2008. The police and fire fund had 14 separate investments managed by Lehman Brothers that declined in value from the purchase price of $14.3 million to $2.4 million in 2008.
“The long-term nature of these investments and the ongoing bankruptcy proceedings make it difficult to calculate the exact amount of economic damages incurred by Ohio’s public pension funds that are attributable to the September 2008 bankruptcy of Lehman Brothers Holdings Inc.,” said Joshua Rosenblum, a Kilroy spokesman.
Now, the Kasich campaign wants you to believe that Kasich’s role in introducing these Lehman Bros. executives from New York in 2002 had nothing to do with Lehman Bros. being responsible for losing millions in state pension funds by investing in toxic assets in 2008.
Of course, the Kasich campaign offers no other explanation how Lehman Brothers got such contracts, and how his help in introducing the heads of those pensions to his co-workers at Lehman Brothers is just a coincidence that bears no relation to Lehman Bros. being in charge of investments that resulted in massive losses.
I mean, the Kasich campaign wants you to believe that this 2002 meeting had absolutely nothing to do with the subsequent business Lehman Bros. did get with these very same pension funds that lost millions under Lehaman’s “management.” And despite the fact that Kasich used his political star power to set these introductions up and was the top Lehman Bros. executive in Columbus, he had no idea or role with Lehman’s poor investments of State pension funds.