John Kasich and Lehman, Cont.

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John Kasich, a former GOP congressman and onetime Lehman Brothers managing director, is running for governor of Ohio against incumbent Democrat Ted Strickland. He wants you to know he was just “one of 700” managing directors at the failed investment bank:

The fact that Kasich feels obligated to address his work at Lehman means that Strickland’s “He’s an outsider” attacks must be working. Eric Kleefeld says Kasich “clearly…wants to change the subject back to the bad economy.” The problem, of course, is that Lehman Brothers and the bad economy are inextricably linked in most people’s minds. So it’s going to be hard for Kasich to talk jobs without talking about his old one. 

Clearly there’s plenty of blame to go around for the financial crisis. But the idea (promoted by Kasich here) that you had to actually be running Lehman to bear some responsibility for its behavior is madness. I know it really hurts bankers‘ feelings when people suggest that Wall Street might have, you know, played a role in its own near-collapse. But it’s true! And let’s be honest about what Kasich was doing when he was working for Lehman in Columbus, Ohio. While he spent most of his time working with the private sector, he clearly did some work trying to convince state pension funds to trust Lehman with their money. 

It’s not even clear to me why state pension funds should be playing the stock market in the first place. Stocks clearly aren’t a safe bet (Ohio funds later invested at least $100 million with Lehman in unrelated deals), and people’s retirements are at stake. But state pension funds have a ton of money, and Wall Street banks like Lehman have a huge incentive to try to get the fees that come from investing that kind of money.

So a lot of the interactions between pension funds and Wall Street (or Wall Street’s middlemen) look kind of sleazy. The Wall Street firms (or their middlemen) hire former politicians or officials to talk up their old buddies (like they did with Kasich). Alternatively, they just go ahead and give big campaign donations to the politicians who oversee the funds—a move that even the SEC thinks looks a lot like pay-to-play

Meanwhile, it’s abundantly clear that Kasich worries about Ohio voters knowing the full extent of the state’s Lehman losses. In June, the Associated Press obtained an email sent by a Kasich campaign employee in which the employee asked an Ohio pension fund executive to be sure to explain that “not all the money it lost was a result of the Lehman bankruptcy.” Lehman is Kasich’s albatross, and it’s not going away with one ad.

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WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

If you can, please support the reporting you get from Mother Jones—that exists to make a difference, not a profit—with a donation of any amount today. We need more donations than normal to come in from this specific blurb to help close our funding gap before it gets any bigger.

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