Gov Crist asks whether Lehman may have hired Jeb Bush to gain influence to sell bad debt to Florida

[seafan]

Finally. NOW, we're getting somewhere.


It's about time some heavy scrutiny comes to pass, on Jeb Bush's role at Lehman Brothers, in ripping off Florida's public investment fund last year.



For background:


State's bad deals under scrutiny

By Sydney P. Freedberg and Connie Humburg, Times staff writers
May 30, 2008

In July and August of 2007, the state agency that manages billions of dollars in public investments bought at least $2.3-billion in securities from three Wall Street firms.

Within just weeks, financial rating firms began downgrading those investments — a development that diminished their value and touched off a series of aftershocks at the State Board of Administration:

• In February, the U.S. Securities and Exchange Commission asked the SBA to turn over a mountain of records on the investments. The SEC wants to know if the state agency mishandled the investments and the Wall Street firms made improper sales.

• In April, an audit ordered by the SBA's board of trustees found widespread problems in five of the investment funds managed by the agency. Some of the securities' sales were improper, the audit said, and oversight was lax.

• Now, a legal showdown may be near. Lawyers hired by the SBA have concluded they have grounds to sue the Wall Street firms, and the state's Office of Financial Regulation — a watchdog agency that supervises financial institutions — has issued subpoenas.

"The taxpayers should be wondering about a whole array of issues around this situation,'' said Florida Chief Financial Officer Alex Sink, who has pushed for investigations of the debacle.

The SBA manages $159.6-billion in assets in 33 funds. The largest is the state's retirement and pension fund for 1.1-million public employees, retirees and their family members. The agency also handles investment accounts for the Florida Lottery, the state's hurricane catastrophe fund and a local government fund where nearly a thousand counties, cities, school districts and other local entities keep surplus cash.

The agency, which employs about 160 people, is governed by a three-member board of trustees who also make up a majority of Florida's Cabinet — the governor, the attorney general and the chief financial officer.

.....

Florida's Sunday Editorials: Time to take a hard look at Jeb's role in FL investment fund debacle, December 23, 2007



More from the Times:

At the center of the controversy are three Wall Street giants that offer brokerage services to the SBA: JPMorgan Chase, Credit Suisse and Lehman Brothers.
Between December 2006 and December 2007, records show, a bulk of the now-suspect investments — 42 percent — was sold to several SBA funds by Lehman Brothers.

Lehman Brothers hired former Gov. Jeb Bush as a consultant in June 2007 — five months after he left office and the SBA board of trustees. In July and August, Lehman sold many of the securities that were soon downgraded.

Earlier this week, Bush repeated earlier statements that he played no role in the Lehman Brothers sales.
"I was not involved in these investments by the State Board of Administration,'' Bush said in an e-mail. "The decisions were made by the SBA when I was no longer governor. In my role as a consultant to Lehman Brothers, I have absolutely nothing to do with any sales or trading related to the State Board of Administration.
"Markets across the globe have been affected by subprime mortgage issues. The Florida Cabinet and State Board of Administration are doing the right thing by working to protect the remaining local government investment pool participants.''

Stipanovich, the former executive director, was appointed by Bush and the other two trustees in 2002. He did not return three calls for comment. Stipanovich is the brother of J.M. "Mac'' Stipanovich, a prominent GOP lobbyist who advised Bush's 1994 gubernatorial campaign.

.....

Under Florida's CFO Alex Sink, this probe is advancing quickly toward litigation.

Sink, who became chief financial officer in January 2007, noted that Florida has a longstanding relationship with Lehman Brothers. She said she has no evidence of wrongdoing by the firm or Bush.
But Sink said she wonders if the Wall Street firms dumped tainted securities on Florida and other states.
"I believe I read that Lehman had decided in December of '06 that they wanted to reduce their own firm's exposure to these types of investments,'' Sink said. "It just makes you wonder if they're going to reduce their exposure, then they have to sell off their investments to some other purchasers.''

Gov. Charlie Crist, who has been a trustee since 2003 when he became attorney general, agreed with Sink. He said the state is aggressively pursuing how the investments "were sort of dumped on Florida. ...Who knows, there could have been fraud involved in that.''

.....

Crist singled out the three Wall Street firms and KKR Financial, an affiliate of Kohlberg Kravis Roberts & Co., the giant buyout firm. KKR Financial issued huge amounts of risky, short-term debt that the three Wall Street firms sold to the SBA.

The governor said he understands that the Wall Street firms tried unsuccessfully to sell some of the "investments that went south'' to other states. So why did the SBA buy them? he asked.

Crist also said that Bush was an honorable person and that he couldn't believe he would ever be "involved in anything nefarious.'' But he suggested that Lehman Brothers may have hired Bush to try to gain influence with the SBA.

"I hope that he wasn't sort of used,'' Crist said.

.....

Jeb Bush, was used?? Hardly, Governor.

This isn't the first time SBA has faced charges of unwise investments. In 2002, the agency lost $280-million on Enron stock, some of it bought while other investors were unloading it.

.....

Jeb Bush was Governor in 2002.

.... said Charles Grice, a former Federal Reserve official who advises companies on financial regulatory issues. "This is like passing out a grenade at a cocktail party, and Florida got caught holding the grenade.''

.....

Did someone say Jeb Bush and ENRON?

Why, Jeb was neck deep in THAT debacle in Florida as well.


There seems to be a troubling pattern here.




And, in honor of Octafish's research on this **troubling pattern** by the Bush Family: Know your BFEE: They Looted Your Nation’s S&Ls for Power and Profit

[blondeatlast]

1. Shades of the Lincoln Savings debacle? McCain has to be involved somehow.

Remember that many of the key players in the Florida recount arrived via the Enron jet, too.

These guys are up to their hair plugs in corruption. Sadly, it's up to the bloggers to find the connections; the m$m needs a root job, eyebrow wax, and a pedicure.

[seafan]

2. Both McCain and Jeb Bush are involved in Vicki Iseman/Carnival Cruise/Katrina contracting scheme

More connections that needn't fall off the radar screen....


Well, well. Jeb Bush is also connected to Alcalde & Fay (Vicki Iseman's firm), February 21, 2008

[blondeatlast]

3. Kickety. I just saw "Recount" finally this AM and am still sick to my stomach.

We can't let these bastards do it again, please.