WASHINGTON - Republican gubernatorial candidate John Kasich tried to persuade two state pension
funds in 2002 to invest with Lehman Brothers while he was the managing director of the investment
banking house's Columbus office.
In a reply to questions from
The Dispatch, Kasich campaign officials acknowledged that the former congressman helped
arrange the two meetings between Lehman officials and representatives of the Ohio Police and Fire
Pension Fund and the Ohio Public Employees Retirement System, known as OPERS.
Kasich campaign officials said in a statement that "these meetings did not result in business
for Lehman Brothers, and John earned no commission from this or any other public sector business."
Kasich never approached any other Ohio governmental entity about doing business with Lehman, the
campaign said.
"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."
Democratic Gov. Ted Strickland's campaign has used Kasich's role as a Lehman executive to try to
discredit the challenger.
The meetings took place on the same day more than six years before Lehman Brothers collapsed in
the fall of 2008.
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. There is no evidence to
contradict Kasich's assertion.
Nor is there evidence that Kasich continued to ply the pensions for business.
Questions about whether Kasich attempted to win Lehman business from the state emerged last
month when Rep. Mary Jo Kilroy, D-Columbus, revealed at a House hearing that the five state pension
funds had seen their Lehman holdings decline in value by $480 million between 2007 and the end of
2008. Using a different method of calculation, the five pension funds put the losses from Lehman
Brothers closer to $221 million.
In preparing for the hearings, Kilroy asked the pension funds in March for "the names of all
individuals who acted on behalf of Lehman transactions" from 1999 through 2009. Kilroy insisted she
was not trying to find out whether Kasich had any role in the state investments with Lehman.
"I don't know what John Kasich's job was at Lehman Brothers," Kilroy said. "I wanted to see what
the effect was on the savings, the pensions, which in many cases are the life savings of Ohio's
civil servants."
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 $14.3million 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.
Dispatch Public Affairs Editor Darrel Rowland and reporters James Nash and Alan Johnson
contributed to this story.
jtorry@dispatch.com
