When Congressman John Kasich left the U.S. House of Representatives in 2001, after representing Ohio’s conservative 12th District in Washington for 18 years, he joined Lehman Brothers for a hefty salary. Lehman Brothers hired him to use his political access, cultivated over a lifetime as a political person who rose to chairman of the House Budget Committee, to generate lucrative business from Ohio investment entities, especially cash-rich retirement pension funds.
Citizen Kasich was in his element, getting all buddy-buddy with Lehman’s CEO at the time, Dick Fuld. Fuld loved Kasich and Kasich loved Fuld until Lehman collapsed, helping trigger the meltdown on Wall Street that immediately morphed into the Great Recession, which Ohio under Gov. Kasich has yet to emerge from in a real meaningful “turnaround” way.
“Fuld is an awesome guy,” Kasich said in a published report. “He is the kind of guy you want to go into battle with. He is a great leader. I like people who are really smart and who are great leaders,” said Kasich, who worked at Lehman for six years before turning his political attention to running for Ohio governor in 2010. But when Lehman and Fuld crashed, Kasich, as was his custom, ditched the alter-ego CEO he was so enthused with at the time. To Kasich’s credit, he passed the SEC’s Series 7 test allowing him to sell Lehman Brothers investment products.
Kasich brought in business for Lehman, parlaying his Washington years and experience into big paydays for Lehman. Lehman gained business from Ohio’s public funds. Those funds ultimately lost hundreds of millions of dollars on Lehman products. John Kasich told Reuters at the time that blaming him for running Lehman into the ground is akin to blaming a gas station owner for the BP oil spill. “It is like there are ghosts or goblins in the closet, but when you open it, there’s nothing there,” he said.
And what does this have to do with Eric Cantor’s move to Wall Street, following his defeat this year in his Virginia congressional district primary? Cantor’s move was explained best by Massachusetts’ Senior U.S. Senator Elizabeth Warren. In an interview with Katie Court at Yahoo, the crusader against Wall Street excess and privilege said, “How wrong can this be that basically what’s happening here is that people work in Washington and man, they hit that revolving door with a speed that would blind you and head straight out into the industry.” Warren, whose name is increasingly mentioned as a potential national candidate for Democrats in 2016, knows why politicos like Kasich and Cantor move to high-paying jobs on Wall Street. It’s not, she said, “because they bring great expertise and insight but because they’re selling access back in to their former colleagues who are still writing policy, who are still making laws.”
Kasich’s well-learned tactic to take credit for good things while removing himself when bad things happen was on full display in his work at Lehman Brothers. John Kasich denied making calls to Ohio-based entities for Lehman, and refused to say if he played any role in Lehman pitching its risky products to Ohio funds in the firm’s waning days. Even when Lehman’s chief financial officer Erin Callan came to Columbus to pitch deals, Kasich was no where to be found. “When people came to Ohio, they didn’t report to me,” he told one reporter. His cover story is that his introductions to Ohio officials did not result in any business for the firm.
John Kasich and Eric Cantor, two master politicos who dislike government but who have spent most of their professional careers working in it and milking it for what they could get out of it, know where the money is, and it’s not helping people in the “shadows,” Kasich’s famous but foggy metaphor for poor and middle-class people struggling to make a living for themselves and their families. Cantor will make millions in his new job. Kasich has already made his millions from Lehman.
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