Lehman lobbying senators intensely for state economic post
HARTFORD — David Lehman, the former Wall Street wunderkind who’s taking criticism for the burst housing bubble that led to the Great Recession of 2008, is working intensely this week to woo enough support from state senators to become Gov. Ned Lamont’s economic development commissioner.
While he’s not on the Senate agenda this week for a possible confirmation vote, the former Goldman Sachs executive has scheduled private, face-to-face meetings, particularly with Democratic senators who publicly remain neutral but may be pushing back against the 41-year-old from Greenwich.
“I don’t know what to think,” said state Sen. Gary Winfield, D-New Haven. “At this point, I don’t know if I should say yes. I don’t know if I should say no. I have members of the public who take issue with his nomination.”
Sen. Alex Bergstein, D-Greenwich, supports Lehman’s nomination based on what she knows now, but if new information came to light she might re-evaluate her position. She met with Lehman and his wife for coffee a few weeks ago.
“I think it has yet to be determined whether he made decisions, whether the company made decisions that were imposed on him, I don’t have those details, nor would I speculate as to what they were,” Bergstein said last week. “Really, this comes down to judgment. What is someone’s judgment and their values. Until you know someone really well or until they’ve been tested, it is hard to know.”
“This is not just about numbers and balance sheets, this about people’s lives,” said Bergstein, who recently approved Lehman’s nomination in the Executive and Legislative Nominations Committee.
Senate President Pro Tempore Martin M. Looney, D-New Haven, said his staff has been involved in a deep dive into Lehman’s former role in the financial meltdown.
“Given the controversial actions of Goldman Sachs, we have to do a pretty careful vetting process,” Looney said Monday. “If nothing turns up that directly undermines, contradicts or conflicts what he said to the committee under oath, then the presumption of a favorable vote on the governor’s nomination would carry the most sway.”
Lamont, in Stamford on Monday, reiterated his support for Lehman’s candidacy to head the state Department of Economic and Community Development, stressing that he is taking undue criticism for the recession, from which the state has struggled to extricate for the last 10 years.
Speaking after a transit-related news conference, Lamont said he’s still pushing for Lehman’s confirmation.
“Absolutely,” the governor said. “He’s the guy that’s going to bring jobs to the state; help to grow jobs. He’s really focused on the cities — help(ing) new entrepreneurs get going. He’s the perfect background we need. Very different than usual guys for DECD. Get the state growing.”
Lamont said Lehman, who would also be his top economic policy adviser, is continuing to reach out to senators. Democrats have a 22-14 Senate majority, but opposition from Republicans has not emerged. It would be unusual for a nominee of a first-term governor to be rejected, but several Democrats have voiced skepticism.
“I think there’s going to be a vote very soon,” Lamont said. “I think he’s going to talk to the Senate caucus. He’s calling and talking to all the legislators. You know, he’s not from the old Hartford political class. He comes from a different background, he’s going to have to introduce himself. He’s going to be a great economic development leader for us.”
Meanwhile, opponents are circulating an online petition opposed to Lehman’s candidacy on the Change.org. platform
Lamont has said repeatedly that Lehman was not culpable in the financial crisis of 2007-08, when the mortgage market collapsed. During that time, Lehman was co-head of the Goldman Sachs department that created Goldman’s controversial collateralized debt obligations (CDOs), packages of mortgages the bank sold to others, and bet against at the same time.
A U.S. Senate investigation from 2011 described he practice — which Lehman and others at Goldman called routine hedging — as a conflict of interest.
“The Goldman Sachs case study focuses on how it used net short positions to benefit from the downturn in the mortgage market, and designed, marketed, and sold CDOs in ways that created conflicts of interest with the firm’s clients and at times led to the banks profiting from the same products that caused substantial losses for its clients,” the U.S. Senate report said.
Staff writer Emilie Munson contributed to this report.