Jeb Bush Shagged Florida

Atrios has what looks very much like the goods on Jeb Bush, courtesy of Bloomberg News:

What Stipanovich, 58, hadn't told his boss, Florida Chief Financial Officer Alex Sink, was that Lehman Brothers was the same firm that had sold the state fund $842 million of mortgage- backed debt in July and August. Those securities defaulted within four months, and totaled more failing debt than any other bank sold the state, Florida records show. "At the time, I never knew it was Lehman Brothers that actually sold us these investments,'' Sink says.

Sink also was unaware that former Florida Governor Jeb Bush, who incorporated Jeb Bush & Associates in February 2007, a month after completing his second term, had been hired as a consultant to Lehman Brothers in June. Bush is the brother of President George W. Bush.
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"Lehman and the other big players in the market decided they didn't like this stuff in their own accounts,'' Sink says. "Where did they drop it and who did they dump it to? It looks questionable to me.''

Joseph Mason, a former U.S. Treasury official and now a finance professor at Drexel University in Philadelphia, says Wall Street had few takers for its subprime-tainted debt. "When they couldn't sell it to more-sophisticated investors, they found less-sophisticated investors like local government investment pools,'' he says.

More from the Bloomberg article:

Stipanovich, who ran the State Board of Administration which manages $184 billion, was hired in 2000. Two of his three personal references came from then-Governor Bush's top aides.

"An outstanding individual capable of significant contributions to the board,'' Sally Bradshaw, Bush's chief of staff, wrote about Stipanovich.
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On June 14, Bear Stearns announced it would liquidate two of its hedge funds, holding more than $4 billion in assets, because their subprime holdings were collapsing. * * *

At about the same time, Bush and his new company won a consulting contract from Lehman Brothers, according to Lehman spokesman Randall Whitestone, who declined to say how much Bush is being paid.
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On July 2, Lehman Brothers sold Lombardi $250 million of one-month commercial paper from a structured finance company called KKR Atlantic Funding Trust yielding 5.37 percent, state records show. KKR Atlantic was rated A-1+ by Standard & Poor's and Prime-1 by Moody's.

It matured, and on Aug. 2, Lehman Brothers sold Lombardi $200 million of one-month KKR Atlantic paper yielding 5.53 percent. It was downgraded to default by Fitch Ratings on Oct. 8, and Not Prime, or junk, by Moody's on Oct. 29.

From July 3 to July 9, Lehman Brothers sold the pool $153 million of commercial paper from another structured finance company called Ottimo Funding yielding 5.36-5.38 percent.

Lehman Brothers spokeswoman Cohen says there's no link between Bush and Lehman's sale of debt to Florida. "Bush is a member of the Lehman Brothers private equity advisory board and his company has been retained by the firm for consulting and advisory services,'' she says. The former governor declined to comment.
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Craig Holman, of Washington-based nonprofit public interest group Public Citizen, disputes Lehman Brothers' view. "That defies credibility,'' says Holman, who lobbies for ethics in government. "It's a clear conflict of interest. Bush is a consultant to the company selling bad investments to the same agency on which he served as a trustee until January.''

It's past time for Mr. Jeb Bush to disclose the details of his contract with Lehman Brothers.

DEPT. OF AMPLIFICATION

Reform Begins Right Behind You, John MCain
9-15-08