The “Gorilla” of Wall Street and The Governor of Ohio were very buddy, buddy once upon a time. In the years preceding the housing bubble going pop, this Wall Street “Gorilla” made a fortune running Lehman Brothers before his name, as Bloomberg News said recently about Dick Fuld as he reemerges from national ignominy over the meltdown on Wall Street, “became synonymous with the hubris that preceded the financial crisis and the chaotic years that followed.”
Known for his brusque style, Mr. Fuld found a kindred spirit and bosom buddy in John R. Kasich, whose similarly brusque style apes that of Mr. Fuld and has become a prominent feature of his tempestuous personality, which ranges from off-putting jerk to sunny optimist, depending on his audience and the circumstance.
Kasich Apes Fuld
In the lead up to the Great Recession of 2007-2009, the worst economic catastrophe since the Great Depression of the 1930s, Dick Fuld, the former CEO of Lehman Brothers, hired citizen Kasich as a rainmaker investment banker to bring Ohio business to the storied investment banking firm. Congressman Kasich converted his nine-terms in the U.S. House into a lucrative private career that included hosting his own Fox News political talk show, “The Heartland,” and substituting on occasion on “The Factor,” hosted by Bill O’Reilly, Fox’s loudest conservative megaphone. Kasich’s 18 years in Washington and his TV star power of the day likely factored into why Fuld brought him on-board at Lehman Brothers, where he spent six years as a managing director of the firm’s investment banking division.
Pundits at the time in 2010 thought Mr. Kasich’s long-stay at Lehman Brothers would wear poorly with people who were fearful of casino-style banking tactics like derivatives and credit-swaps that Lehman used that tanked the company and the national economy. Sadly, Ohio has not fully recovered from those days as job growth under the Kasich Administration has been poor. His string of 30 consecutive months of underperforming the national average bears witness to his floundering.
In much the same way Gov. Kasich said last year how much he “loves” New Jersey Gov. Chris Christie, he once loved Dick Fuld. Kasich ladled on the praise for the “Gorilla” in a 2001 interview in the New York Observer, saying he’s “an awesome guy” and “a great leader.” Kasich credited Dick Fuld for bringing him to Lehman Brothers. But good times only last so long, and when Lehman tanked, Kasich dumped on Fuld after he became toxic. Congressional hearings investigating the collapse at Lehman Brothers found huge fault with Fuld’s multimillion-dollar salary, and for his failure to guide the company away from risky subprime mortgage loans and other bad debt. Kasich likes to cozy up to success and successful people, so when Fuld fell on hard time, Kasich quickly distanced himself from the great leader he once thought so awesome.
Fuld hired John Kasich to match-make relationships between Lehman Brothers and Ohio interests, which he did with some retirement pension funds. Kasich got paid pretty penny, but the funds he shopped got bilked to the tune of about $400 million. John Kasich said through a spokesman about Fuld and the firm, that he was “deeply disappointed with Lehman Brothers’ top management and their decisions.” Kasich, of course, failed to mention when his deep disappointment started and whether his disappointment was deep enough to bring it to the attention of Fuld or any other top manager at Lehman, but that’s just basic Kasich communication style to leave out the most important part.
It’s no secret that John Kasich loves jumping in front of a parade, if he can benefit from it, which he did with the Tea Party Movement in 2010. He also knows how to hide in plain sight when parades make wrong turns, as he did with the collapse of Lehman Brothers. The governor’s handy but flimsy excuse at the time for the firm’s failure was that he wasn’t involved with underwriting of mortgage-backed securities or with the proprietary real-estate investments which led to Lehman’s bankruptcy. Kasich also inferred that since he didn’t receive a bonus or any special severance package, his hands were clean. Gov. Kasich portrayed himself as innocent after he left Lehman in September of 2009, just another face in the crowd of 30,000 workers employed at Lehman Brothers who worked years to build up equity only to see it disappear when the firm crashed and Wall Street melted in its wake.
After refusing to release his tax returns in 2010, citizen Kasich finally agreed to give media a few minutes to look at only one year. Speculation at the time was that Mr. Kasich was earning hundreds of thousands of dollars a year, with one estimate that he made $1 million or more confirmed by that single tax return and the limited time reporters had to review it.
Gorillas In The Mist Of Lehman Brothers
Now, after almost seven years of living in the shadows, Richard S. Fuld Jr. is back in the light. Gorillas in the mist of Lehman Brother’s collapse, Kasich and Fuld continue to ape each other as leaders unapologetic for the time they spent on Wall Street at Lehman. In a report in the New York Times, Mr. Fuld said Lehman could have survived if the Federal Reserve had allowed it to, then deflected blame for the crisis onto policy makers instead of bankers. “There was very little regulation or market supervision,” Mr. Fuld said, the Times reported. Meanwhile, Gov. Kasich has made getting government buden off the backs of business a central core of his Administration’s belief system.
John Kasich learned a lot working at Lehman Brothers. He learned to leverage heavily, which he’s did with state liquor and Ohio Turnpike revenues, bonding them out for decades in exchange for fast cash today. While doing deals at Lehman Brothers, Gov. Kasich met and worked with John Minor, who he brought on-board to run JobsOhio, the super secret agency that doles out funds to create jobs. Unfortunately for Ohio, under Mssrs. Kasich and Minor, as measured by the W.P Carey School of Business at Arizona State University, the Buckeye State is tops among the bottom dozen states in job creation.
It’s not beyond the imagination for Mr Kasich, for those who know him, that it would be just his in-your-face style, should he be elected the next President of the United States, that he’d nominate his “awesome” mentor and “great guy” employer, Richard Fuld, to be secretary of the treasury. Getting the band back together.