John Kasich's Wall Street ties could haunt 2016 bid (2015)

Ohio Gov. John Kasich loves talking about his record in office, his knack for balancing the budget and his controversial decision to back Medicaid expansion.

But there's one part of his resume he's less inclined to discuss: the years he spent as a senior executive at Lehman Brothers.

Kasich joined Lehman's investment banking division as managing director in 2001, working there until the firm's collapse in September 2008 unleashed global panic and served as the catalyst for the financial crisis.

The Republican governor's past work at arguably the most deeply vilified Wall Street firm -- so despised that in the aftermath of the crisis, some people referred to the bank simply as the "L word" -- is likely to serve as rich fodder for political attacks if Kasich were to become a serious contender for the GOP's presidential nomination. His banking background is particularly ripe for scrutiny and criticism in the 2016 cycle, as populist, anti-Wall Street sentiment is fueling support for a number of candidates on both sides of the political aisle.

Lehman is back in the news with its disgraced former CEO, Richard Fuld, ending his years of silence with unapologetic and at times feisty remarks ("Why don't you bite me?" Fuld replied when a moderator at a conference in New York asked why he didn't simply ride into the sunset after Lehman's fall).

Kasich worked as managing director of Lehman Brothers' investment banking division in Columbus, Ohio, until the bank went under in 2008. "I wasn't involved in the inner workings of Lehman, I was a banker. I didn't go to board meetings or go and talk investment strategy with the top people. I was nowhere near that," Kasich told the Dayton Daily News in 2010. "That's like, it's sort of like being a car dealer in Zanesville and being blamed for the collapse of GM."

Kasich denying but he's lying.

“In a report in The Columbus Dispatch, a Lehman official said Kasich had “board level and CEO relationships where he helped not only open the door for Lehman Brothers, but he also was a key member of the deal team providing advice.”

Huge Lehman Brothers payouts report recalls Gov. Kasich's time at firm

Kasich was managing director of Lehman/s Columbus, Ohio investment banking division until the bank went under in 2008 but says "I wasn't involved in the inner workings of Lehman, I was a banker. I didn't go to board meetings or go and talk investment strategy with the top people." But he/s lying b/c a report in The Columbus Dispatch, quotes a Lehman official who said Kasich had “board level and CEO relationships where he helped not only open the door for Lehman Brothers, but he also was a key member of the deal team providing advice.”

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What does Kasich know about this?

The best book on the 2008-9 crisis was “The Sellout,” by Charles Gasparino. He traces several threads:

- How the investment banks (Merrill, Lehman, Bear Stearns) had leveraged themselves into near-death experiences before

- How US government policies virtually forced banks to make low-down payment mortgages to buyers with sub-standard credit, forcing up prices

- How securitization meant these sub-standard loans could be bundled up and sold far and wide (w/ great losses to the buyers)

- How the ratings agencies gave this crap AAA ratings

- How the sales incentives to create mortgage-backed securities led to incredible short term behavior on the part of investment bankers

- How AIG (insurance) screwed up by guaranteeing many of these in Credit Default Swaps....etc, etc, etc.

It took an unholy confluence of events—government policy, investment banker greed, and last, but not least, securitization to create the perfect storm.....and swamped taxpayers w/ billion dollar bailouts.

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