IBT, By Matthew Cunningham-Cook, David Sirota, and Andrew Perez, August 19
For Florida taxpayers, the move by the administration of then-Gov. Jeb Bush to forge a relationship with Lehman Brothers would ultimately prove disastrous. Transactions in 2005 and 2006 put the Wall Street investment bank in charge of some $250 million worth of pension funds for Florida cops, teachers and firefighters. Lehman would capture more than $5 million in fees on these deals, while gaining additional contracts to manage another $1.2 billion of Florida’s money. Then, in the fall of 2008, Lehman collapsed into bankruptcy, leaving Florida facing up to $1 billion in losses.
But for Jeb Bush personally, his enduring relationship with Lehman would prove lucrative. In 2007, just as he left office, Bush secured a job as a Lehman consultant for $1.3 million a year, Bloomberg reported.
Weeks after Bush took the Lehman job, the Florida State Board of Administration (SBA) — a three-member body that makes investment decisions about state pension funds and whose ranks had recently included one Jeb Bush — gave Lehman additional business: SBA purchased $842 million worth of separate investments in Lehman’s mortgage-backed securities. Over the course of one year from June 2007 to June 2008, the SBA would shift an additional $420 million of pension money into the same fund in which the state had begun investing under Bush.
In short, during Bush’s first year working for Lehman, his former colleagues in Tallahassee, the state capital, moved vast sums of Florida pension money into the doomed Wall Street investment bank, even as warnings about its financial troubles began to emerge.