COLUMBUS — Republican John Kasich likes to tell voters in his campaign for governor that as an investment banker at Lehman Brothers, he was part of the team that took Internet giant Google Inc. public in 2004.
“My job was to travel the country, figure out to strengthen businesses and try to get hired to do it. So I spent a ton of time in the Silicon Valley. I was involved in the team, part of the team that took Google public,” he said of his nearly eight years at Lehman Brothers.
But a closer look at the 2004 Google deal, which Kasich touts as evidence that he is prepared to be Ohio’s top executive, raises questions about just what Kasich’s role was in one of the hottest stock deals of the decade.
Google hired 28 underwriting banks with Morgan Stanley and Credit Suisse First Boston as the lead underwriters and Lehman coming in fifth in the pecking order, according to documents filed with the Securities and Exchange Commission.
Kasich’s former boss at Lehman Brothers, Gary Weinstein, said the company “didn’t play a significant role” in Google’s Initial Public Offering, or IPO. Weinstein, who had been Lehman Brothers’ global chief administrative officer of investment banking, said the former Ohio congressman knew the founders of Google and pitched the idea of Lehman joining the second- or third-tier underwriting team .
“He was instrumental in helping Lehman gain the role that they got with Google and their IPO,” Weinstein said. “ They weren’t one of the lead underwriters or managers or co-managers (of the IPO.)”
Google’s corporate public relations office declined to comment.
Other than the Google IPO, Kasich has tended to downplay his Lehman Brothers experience: His biography on his campaign website doesn’t mention his eight years there and when Gov. Ted Strickland and other Democrats try to tie him to the unethical, failed management at Lehman, Kasich fights back.
“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 no where near that,” Kasich said in March. “That’s like, it’s sort of like being a car dealer in Zanesville and being blamed for the collapse of GM.”
Lehman Brothers collapsed in September 2008 and triggered a near economic meltdown on Wall Street. Earlier this year, a bankruptcy examiner issued blistering criticism of Lehman’s top management for using accounting gimmicks to mask the perilous state of its finances.
“I think this is a pretty clear case of him wanting to have it both ways,” said Strickland campaign spokeswoman Lis Smith. Kasich portrays himself as a Wall Street mover and shaker when it suits him but the equivalent of a small town car dealer at other times, she said.
“So, which one was it? What this underscores is the need for him to be truthful and open and transparent about what he did at Lehman Brothers.”
Kasich served as a managing director in Lehman’s investment banking division and had offices in Columbus and New York. Weinstein and Kasich both say Kasich worked primarily out of Columbus.
In 2008, Lehman paid him $614,892 in salary and bonus but Kasich has declined to release his earnings information for prior years.
Weinstein said Kasich knew nothing of banking when he arrived at Lehman fresh off his 18 years as a Congressman from Ohio.
“It was tough going in the beginning because he didn’t know anything about Wall Street or investment banking. So we spent hours with me tutoring him,” Weinstein said.
Weinstein speaks highly of Kasich, who he said worked hard and turned out to be a “very persistent and effective” employee.
Rob Nichols, press secretary for the Kasich campaign for governor, said his boss was “quick to recognize the power of Google,” and that he and his colleagues at Lehman Brothers worked with a team of banks that “helped Google raise the capital to grow and expand and become the essential tool it is today.”
Kasich is “proud of what he accomplished,” at Lehman Brothers, said Nichols, and was angry and frustrated after “learning about the misdeeds, bad judgment and greed that infected the company’s top ranks.”
Kasich met Lehman Brothers Chairman and Chief Executive Richard Fuld during his run for president in 2000. When Kasich ended his campaign, Fuld offered him a job on Wall Street, according to a 2001 article in The New York Observer.
Back then, according to The Observer, Kasich called Fuld an “awesome guy” and “the kind of guy you want to go into battle with. He is a great leader.”
But nowadays, Kasich says his complimentary comments about Fuld had to do with how the chief executive treated Lehman employees after the 9/11 attacks destroyed the firm’s Manhattan offices.
“Fuld, to his everlasting credit, told people we would not be defeated, we would not be denied and when other banks were trying to steal all of our business by saying Lehman had imploded and was gone, he didn’t let the employees ever think that,” Kasich said. “I’m very disappointed in what has happened. It has cost me money. It has cost a lot of families money. I mean, they were, they did not have their, they did things that in my opinion were irresponsible.”
Contact this reporter at (614)224-1624 or lbischoff@DaytonDailyNews.com.
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