The Service Employees International Union claims that GOP gubernatorial candidate John Kasich, a former Lehman Brothers executive, "got rich, while Ohio seniors lost their pension money" in an ad that makes a weak attempt to connect Kasich to the pension losses.
It’s true that Kasich, who’s running against Democratic Gov. Ted Strickland, made a hefty sum working for the financial firm in 2008, the same year it collapsed. And he admits to setting up meetings between Lehman and state pension officials. But the very newspaper articles SEIU cites as support for the ad say the pension representatives didn’t invest with the now-bankrupt firm as a result of those meetings in 2002.
Losses Pinned on Kasich
The ad says that "Kasich pressured Ohio pension officials to invest in Lehman Brothers. Then Lehman Brothers collapsed and Ohio seniors lost $480 million." That suggests that pension officials invested in Lehman because of Kasich. But that’s not true.
Kasich, who was also a U.S. representative from 1983 to 2001, worked in Lehman’s Columbus, Ohio, office as a managing director and set up meetings between company officials and two Ohio pension funds in 2002. The Kasich campaign told the Columbus Dispatch about those meetings with the Ohio Police and Fire Pension Fund and the Ohio Public Employees Retirement System, and SEIU’s ad cites that article as support for its claims. But the article also says there’s no evidence that the meetings led to any business for Lehman. In fact, it says a spokesman for the Ohio Police and Fire Pension Fund confirmed that the fund didn’t do business with Lehman because of the meeting.
Columbus Dispatch, May 12: 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.
The ad leaves out that information.
SEIU cites another Dispatch article that says the State Teachers Retirement System also told the newspaper that Kasich had called the pension fund to pitch Lehman Brothers in mid-2002. Kasich said he doesn’t remember the phone call, and the Dispatch reported that "the work eventually went to a Lehman competitor." Based on the support for this ad, it would be more accurate for SEIU to say that "Kasich unsuccessfully tried to get Ohio pension officials to invest in Lehman Brothers."
The second Dispatch article also describes a somewhat complicated connect-the-dots claim being made by the Strickland campaign. It says that the campaign pointed to "newly discovered records" showing that a colleague of Kasich, John Dwyer, tried to sell what the campaign called "toxic assets" to Ohio pension funds in 2008, less than a month before Lehman collapsed. We repeatedly have asked the Strickland campaign for more information on these "records," but we haven’t yet received a response. However, as described by the campaign, they show actions by Kasich’s colleague, not the gubernatorial candidate himself.
Seniors Lost How Much?
The ad says that "Ohio seniors lost $480 million," but they didn’t actually lose that money. The Associated Press reported in April that "Ohio’s public pension funds took a $480 million hit in investments managed by Lehman Brothers as the banking giant collapsed." But the article also said that figure was a decline in market value, not actual losses on the stock market.
A spokeswoman for the Ohio Public Employees Retirement System, which took the biggest hit among the state pension funds, told the AP that the figure represented the decline in value of Lehman-held investments from 2007 to 2008 and didn’t take into account whether assets had been bought or sold. The Dispatch has reported that the five state pension funds involved estimated losses of about $221 million, using a different calculation.
While the Strickland campaign and its supporters — SEIU has endorsed the governor — play up Kasich’s career with Lehman Brothers, Kasich has downplayed it. The video clips in the beginning of this ad are correct: In an ad released this summer, Kasich said that he "worked in a two-man office in Columbus." In 2008 appearances on Fox News, however, he characterized his job as work "on Wall Street."
–Lori Robertson, with Lara Seligman