Lehman opposition a political test for Lamont
A political crisis might be brewing for Gov. Ned Lamont as some Democratic members of the Senate say they’ll oppose David Lehman to head economic development and many remain undecided — even if Senate President Pro-Tem Martin Looney supports the nomination.
Lehman hails from Goldman Sachs, where he was a partner and head of global real estate finance until he volunteered to join the Lamont administration. That doesn’t sit well with liberals and populists, since Goldman — and Lehman himself — had a profound role in the mortgage meltdown of 2007-08.
“I cannot in good conscience support an individual who has been involved as a participant in the creation of that economic disaster,” Sen. Saud Anwar, D-South Windsor, said Monday — his first full business day in the General Assembly after a special election victory.
The problem for Lehman and Lamont is not that this or that senator opposes the nomination; no, it’s deeper than that. It’s about a nasty set of fault lines within the party about how to handle a host of econonmic issues.
And it’s about Lamont’s ability to fill a key commissioner’s post at a time when many Democrats say he needs to tax the rich, rather than the middle class, and stop the state’s longtime practice of kowtowing to big corporations.
It’s too strong to say Lehman’s nomination is in jeopardy, as all six Senate Democrats on the nominations committee voted to advance his name last Tuesday, after a 2-hour hearing. Still, Lamont and his top aides, and Lehman, are having to pay more than the usual number of courtesy calls on skeptical Democrats in the Senate, where Lehman’s confirmation could come up for a vote as soon as next week.
Looney, a New Haven Democrat, said he’s been approached by “several” Senate Democrats “who see the connection to Goldman Sachs as being so toxic” that they can’t support Lehman.
“Somebody said, ‘This would be like having someone considered for a high-level banking position who had been an employee of Jesse James or John Dillinger’,” Looney told me Monday morning.
He declined to name any of the opponents.
That characterization of Lehman is harsh considering how many forces came together to foment the housing meltdown a dozen years ago. Goldman Sachs is not the bank that approved millions of mortgages to people who didn’t have the income to qualify, and Goldman Sachs is not the bank, not directly anyway, that inflated a speculative bubble sending home prices to unsustainable levels.
Still, it’s true that the gold-plated investment bank started betting against mortgage-backed securities as early as December, 2006, and continued selling packaged home loans, collecting on other financial institutions’ losses while accepting a federal bailout.
And Lehman was, before his 30th birthday, the co-chief of structured finance, the Goldman arm that created some of the complex instruments the bank deployed.
Looney, in my column Monday, said Lehman’s background warrants extra investigation. But he said he’s inclined to support Lamont’s prerogative to name his own economic development team, absent any new findings that contradict what Lehman has said.
In a normal year, that might be enough to win the day for a new governor. But this year, we’re looking at tolls, Lamont’s proposed $500 million expansion of the sales tax, a bitter, regional battle over gambling, marijuana legalization and health care reform — most of which leave the Democrats less than unified.
Some believe — incorrectly — that as a Wall Street veteran dealmaker, Lehman favors handouts to corporations. And some believe — incorrectly — that his experience is limited to the sorts of high-tension securities trading we see in Hollywood.
In fact, Lehman has broader experience in public infrastructure and real estate development deals, and believes strongly in building cities through a tech-friendly business climate.
Here’s the political problem: Lehman didn’t fare well in a presentation to the House progressive caucus, which is loaded with Wall Street skeptics. That sent his nomination to the Senate rather than the House. And as far as I can tell, the Senate has no outspoken champion for the 41-year-old Greenwich resident.
“I believe the governor and Mr. Lehman himself need to sell the nomination,” Looney said.
With Republican votes included, it’s nearly certain Lehman would win the necessary 18 Senate votes for confirmation. But by tradition, if Looney doesn’t have a majority of the 22 Democrats in favor, he could decline to bring the nomination to a vote.
Looney wouldn’t say how he’d react if that were to happen.
“I’m undecided,” said Sen. Matt Lesser, D-Middletown, who met with Lehman last week and spoke with him by phone Monday. “Other folks are where I am...We want to know why he wants the job.”
Anwar, too, said he’s open to being persuaded by Lehman.
My colleague Ken Dixon spoke with Tom Swan, an influential, progressive advocate as head of the Connecticut Citizen Action Group.
“I am not impressed, and I’ve heard nothing from him that explains how’s he’s going to be about rebuilding the middle class,” Swan told Dixon. “I’m not going to go out a limb on opposing him. Ned should be given a shot. But between this and tax policy, he has to make a lot more moves than Family and Medical Leave and a $15 minimum wage. Working people need to see real improvements in their lives. Regressive tax policies in budget aren’t a way to make that happen.”
See, there’s the specter of rifts haunting Lamont’s bid to install a commissioner of the state Department of Economic and Community Development.
“I had a big fight with my girlfriend about it over the weekend,” said Sen. Will Haskell, D-Westport — a place whose Senator might automatically approve a Wall Streeter in different times.
Who took which side? Haskell wouldn’t say, adding that he’s waiting to speak with Lehman, looking for strong answers to questions that came up in the Progressive Caucus.
Lamont told Dixon on Friday that opponents are seeing the wrong picture after they “googled Goldman Sachs and blamed them for the economic crisis. They’re making a big mistake. This is an incredible young man...working his heart out to turn this state around.”
Lamont added, to Dixon, that blaming Lehman for gambling away the U.S. economy is “a cheap shot from people who aren’t paying attention...He’s a guy that spent a lot of his life looking at the opportunity zones, focusing on economic development. If you want to get jobs here, he’s the guy who can help us do it.”
Just the fact that Lamont is having to mount so ardent a defense of his man is a political lesson for the first-time state elected official.