Thursday, March 19, 2009

Let's think again of how Jeb and Lehman cost Florida bigtime

In Wednesday's NY Times, this article:
New Jersey Sues Over Its Lehman Losses - DealBook Blog -
served as a reminder of how Florida got ripped off in the same way. Has Florida sued? Not mentioned in the article, though California was cited as having sued before New Jersey.

Where are we? Why no suit?

New Jersey is out $180 million thanks to the collapse of Lehman. Florida also lost many millions, though a light search doesn't reveal how much. There is an interesting similarity between Florida and New Jersey, in that both states had a board of officials supposedly overseeing the operation of the fund -- like the money market funds we ordinary citizens have been forced to use by our friendly banks -- where revenue was parked until needed by local governments to pay their staff and other obligations. In Florida it's the State Board of Administration. New Jersey calls it the State Investment Council. Here's a quote from the Times story about that board:

State Senator Joseph Pennacchio, a Republican who has been critical of both Lehman and the State Investment Council, told The Times in an interview that it made sense to sue. But he also called for legislative hearings into the council’s investment practices and said that the council included three former Lehman executives and the wife of a former Lehman executive.

“That raises our level of suspicion and cynicism about the whole deal,” Mr. Pennacchio told The Times. “It makes sense to go after Lehman. But we also want to know if people on the council did things they should not have done.”

I'd like to know the same kind of stuff about our Florida counterpart. It's deeply suspicious because Jeb Bush was on that board and then when he left the governor's office he became a well-paid consultant to Lehman.

Jeb, are you refunding your bonuses?

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