Third Kasich call for Lehman in dispute

Strickland camp sees 'deception'; challenger sees 'pathetic attacks'

Thursday, July 22, 2010 11:12 PM

By Mark Niquette and Darrel Rowland
THE COLUMBUS DISPATCH

Gov. Ted Strickland is questioning the credibility of Republican challenger John Kasich's accounts about his work at Lehman Brothers, citing a new revelation that contradicts Kasich's previous statements.


Kasich's campaign said the allegations surrounding the newly divulged Kasich contact with Ohio's public pension systems are not true, calling them "more pathetic attacks from a failed governor."

Earlier this year, Kasich's campaign said the former congressman was involved only in arranging meetings for Lehman staffers on Feb. 28, 2002, with the Ohio Police & Fire Pension Fund and Ohio Public Employees Retirement System. The campaign said that Kasich, a former managing director for Lehman, never approached any other Ohio government entity about doing business with Lehman.

But the State Teachers Retirement System told The Dispatch today that Kasich also personally called to pitch Lehman Brothers in mid-2002. Kasich said he doesn't remember the phone call, which Strickland questions.

"Was it a mistake or was it a decision to withhold full disclosure?" Strickland asked. "I don't know, but I think it is a question that is relevant and should be asked and there should be an explanation."

Editor's note:  John Kasich avoided the question of his Tax Statements at a radio "TownHall" on WRFD 880 back in 2009
Aaron Pickrell, Strickland's campaign manager cited the new revelation as part of a "pattern of deception."

"With every story that has emerged about Congressman Kasich's time at Lehman Brothers, he has offered an excuse, mitigating his responsibility there, but he has refused to come clean with Ohioans," Pickrell said during a news conference at Strickland's Downtown campaign headquarters. "Given this repeated and consistent deception, it is clear that Congressman Kasich is hiding the truth."

Kasich said such charges represent "desperate tactics" by Strickland and wondered: "Do these folks have anything good to say about themselves?"

Kasich's explanation for the newly revealed call: "I don't remember the conversation. I don't even think it lasted 10 minutes from what I know. I'm saying I didn't know that it happened, or I would've told you."

Kasich staff members point out that they volunteered the fact two months ago that Kasich had contact with Ohio PERS, even though officials at that fund initially couldn't find any record of it. That shows that Kasich has nothing to hide, they say.

Alan Muench. of the teachers system real-estate investment division, said in an internal STRS e-mail: "John Kasich called me to try to pitch Lehman's brokerage services to sell our mall portfolio in mid-2002. It was less than a 10 min conversation."

The work eventually went to a Lehman competitor.

Why that contact was not divulged despite earlier requests by The Dispatch and others for information on all Kasich contacts with the pension fund was not immediately clear.

Strickland's campaign also pointed to records showing that Kasich introduced John Dwyer, who worked in Lehman's Chicago office, to Ohio's pension funds in 2002. The campaign said newly discovered records show that Dwyer tried to pitch "toxic assets" on Aug. 25, 2008, three weeks before Lehman filed for bankruptcy.

Lehman Brothers had to know at the time it was in trouble, so it was questionable to be pitching the investment, said Stephen Buser, a professor emeritus of finance at Ohio State University who spoke at the Strickland news conference.

But Kasich said he had no knowledge of the solicitation two years ago.

Strickland has hammered at Kasich's "Wall Street values" and the former congressman's lack of details about what he did and how much he made at Lehman Brothers, whose collapse helped fuel the country's financial crisis.

Kasich has defended his tenure at Lehman and uses part of his first television ad currently airing to say, "I didn't run Lehman Brothers."

Dispatch Senior Editor Joe Hallett contributed to this story.

mniquette@dispatch.com

drowland@dispatch.com