Lehman Brothers managing director John Kasich kicks back in
the plush leather chair in his corner office high atop 3 World Financial Center
and starts weighing in on his latest investment-banking deal.
“It’s a small company in the health-care space,” he says.
“Today, we set up a call with the C.E.O. and C.F.O. Tomorrow,
I’ll be pitching them with our senior banker in Columbus.
It’s a private placement that will lead to an I.P.O. We are down to the eighth
or ninth inning.”
In his power blue suit, with a snappy little cell phone
attached to his belt, the 49-year-old Mr. Kasich certainly looks like an
investment banker. But there’s something about the boom of his voice-a
caucus-meeting baritone-and the way he bounds down the hall to shake a
reporter’s hand that still reeks of Washington, D.C.
Yes, it is that John Kasich. For a time in the mid-1990′s,
the Ohio Congressman was something of a C-Span celebrity-chairman of the House
Budget Committee during the Gingrich years, the architect of the 1997 budget
agreement that led to today’s budget surplus. For a while there, he was even a
blip-albeit a very small one-on the radar of the Republican 2000 Presidential
Then he kind of disappeared. He did not seek reelection and
instead decided to do something besides politics with his life. Now he commutes
a few times a month from Columbus, Ohio,
where he lives with his wife and twin 20-month-old daughters, and tucks into
Lehman Brother’s corner office to talk about mergers and acquisitions in the
For a guy who was once Newt Gingrich’s right-hand man and
went head-to-head with Bill Clinton on the budget, he admits there’s a certain weirdness to it all.
“Never in my life did I think that I’d be spending time on
zero-convert coupon bonds,” he says with a smile. Zero-convert what? “It’s
where you don’t want to pay anybody anything, and you get to a certain strike
price and they can convert and buy stock.”
So don’t mistake Mr. Kasich for a rain-making Vernon
type-happy to swoop into the city for a few power lunches and the discreet
phone call or two. He has already passed his Series 7 (the multi-hour test that
all in the securities industry must pass), and now, his sleeves rolled up, Mr.
Kasich is ready to do some deals.
“A lot of people thought that when I came here, I would be a
politician,” he says. “But I wanted to do banking. If you were to look at all
the Washington types that came to
Wall Street, how many do you think took the Series 7? No one expected this.”
For Mr. Kasich, it all came together quickly. He met Lehman
Brothers chairman and chief executive Dick Fuld at the tail end of his Presidential
run. His hat was in hand at the time, given the perilous financial state of his
campaign, but he and Mr. Fuld hit it off nevertheless. When he finally pulled
the plug on his Presidential effort, he started a round of calls to people
concerning his next move.
“I had reached the top of the mountain in D.C.,” he said.
“And I didn’t want to head down the other side.”
So when Mr. Fuld made him an offer to come to Lehman
Brothers, he jumped. “Fuld is an awesome guy,” Mr. Kasich enthuses. “He is the
kind of guy you want to go into battle with. He is a great leader. I like
people who are really smart and who are great leaders.”
It’s been remarked often that Mr. Kasich’s bouncy, almost
childlike enthusiasms-he was thrown off the stage at a Grateful Dead Concert,
and he and his close friend Gary Condit once jumped into a mosh pit at a Pearl
Jam concert-have been something of a double-edged sword for his political
career. It gave him a nice common touch (he never lost an election), but when
it came time to take his act to the national level, the pundits begin calling
for more gravitas.
Mr. Kasich snorts. “The issue was money-M-O-N-E-Y. If I’d
had more of that, I would have had all the gravitas”-he fairly spits out the
word-”in the world. And you know what? If you look ‘gravitas’ up in the
dictionary, it doesn’t exist.”
It does, actually, but no matter: Gravitas has never been a
prerequisite for investment-banking success. In the true spirit of the master
legislator he once was, Mr. Kasich talks much of relationships, teamwork and
the symphonious merging of the two.
Already, he says, his friendship with venture-capital bigwig
Mark Kvamme at Sequoia Capital has helped Lehman Brothers’ private-equity team
get into a few early-stage portfolio investments. But more than anything, Mr.
Kasich just wants to be one of the guys. “When I walk into a room and the
bankers start talking about financing, I want to be part of that discussion,”
he says earnestly. “The other day I was with a health-care banker, talking
about one of our big targets. He was saying the key is financing. I said,
‘True, but we should really think about doing some M&A for them, too.’”
Frank Quattrone he may not be, but this is just the
beginning, and Mr. Kasich seems to be enjoying the learning. And his peers at
Lehman are duly impressed. “I’m finally calling him a banker now,” chuckles Mr.
Kasich’s boss, managing director Gary Weinstein. “He’s got the lingo down; he’s
got the drive down. No doubt about it: He has added enormous value.”
The son of an outer-Pittsburgh mailman, Mr. Kasich has
always been a bit impatient for the next frontier. He escaped the steel-town
drudgery of his childhood by attending Ohio
State, became a state senator in Columbus,
and in 1982 was elected to Congress, where he soon hitched his star to Newt
Gingrich and his revolutionary band.
With a savvy eye for the C-Span camera, Mr. Kasich
presciently made himself a budget expert and, before it was chic, began
extolling the virtues of a balanced budget and fiscal rectitude. As chairman of
the House Budget Committee, his timing was perfect: A triangulating President
Clinton bought into his patter, and by 1997 a budget deal was done.
In 1998, following his reelection, Mr. Kasich turned his eye
toward Iowa and New
Hampshire. He was God-fearin’ (born again in 1987,
after his parents were killed in a car crash), a budget wonk, and willing to
grip and grin until the cows came home. Nevertheless, there was a
green-eyeshade quality to his campaign, and his voice on the big stage seemed
less authoritative than tinny.
Without any money to speak of, he called it quits in July
1999 and was the first Republican candidate to line up behind George W. Bush.
Everyone assumed he was angling for a spot on the ticket or perhaps even a
Cabinet slot. But Mr. Kasich was ready to move on.
“People have a hard time understanding how someone walks
away from politics,” he says. “Frankly, it amazes me. I’m not saying I’m done
with it; I’m just not addicted to it.”
Perhaps not. And certainly the
story of a politician licking his wounds on Wall Street after a disappointment
on the national stage is an old one. Think of Richard Nixon as a corporate
lawyer in the mid-1960′s.
Yet, like so many of the others, the move doesn’t exactly
make Mr. Kasich a New Yorker. Technically, he works half-time for Lehman,
though he says he’s putting in 40-hour weeks talking to other bankers and
clients. Working out of Columbus
with two assistants, he flies into the city a couple of times a month to meet
with New York–based bankers. On his last trip, he stayed in the Soho Grand.
“The most exciting thing that I’ve done in the city was having dinner in Little
Italy and then walking back on my own to my hotel in Soho,”
Out of the D.C. loop, Mr. Kasich must have a strong view or
two about the budget surplus, the hottest political topic in Washington
right now. How does it feel to see the surplus you crafted wither away? “I
don’t see the future of politics revolving around these issues,” he says.
“That’s not how people get elected; that’s not how people lead. I think
President Bush is doing a fine job, but I think he needs to take his case to
the people. They ought to pay down the debt and preserve Social Security, and
that’s about all I have to say about it.”
It certainly does seem that a flame still flickers deep in
Mr. Kasich’s belly. He maintains a Columbus-based P.A.C. called the New Century
Project and has a gig as a talking head on Fox News, just so people don’t
forget him. In 2008, Mr. Kasich thinks he will be tanned, rested and ready, and
having done his time on Wall Street-having finally rubbed up close against all
those big-money guys-he just might be able to scrape together enough cash to
make a meaningful run at it.
“If I can fix my fund-raising problems, I will run again,”
Mr. Weinstein says he will vote for him. And then there’s
his new mentor, Mr. Fuld. Bill Clinton had Bob Rubin, Mr. Bush had Donald
Marron-could Dick Fuld be his man to shake the Wall Street money tree?
“That’s not the way I think about it,” says Mr. Kasich.
“Right now, I work for him. I do think, though, that most people here would be
happy to see me do well [as a Presidential candidate] again. But it’s not
something I run around thinking about.”
The phone rings, and Mr. Kasich quickly reaches for it: “4:10? O.K., I’ll be right down.” It’s the
chairman’s office-a slot with the C.E.O. has freed up.
“It’s time for me to wrap up,” he says. “I’ve got to go and
And, just like that, he is gone.
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