I thought Arnold was sleazy and misleading—he was. His protégé, Neel Kashhari is running for Governor with the old Arnold Team, like Aaron McLear. Unlike Arnold who claimed to be a Republican, but denounced the GOP, refused to help Republican candidates, appointed mostly Democrats to his Administration—including the Gray Davis chief of Staff as his chief of Staff, Kashkari is honest from the get go—he tells you he voted for Obama, has never helped the GOP, supports radical anti-woman policies (like the Democrats)
Until he decided he wanted to run for office had he ever attended a State Party convention, gone to a volunteer club meeting, raised money for our candidates? In the past six months, instead of building those relationships (just like Arnold) he has spent smoozing the very rich and big donors—trying to get money, instead of meeting with Republican grassroots leaders. Arnold never spoke to GOP groups and answered non planted questions. The people running Neel ran Arnold, they know how to hide a Democrat in a Republican audience. Is a race for President his next goal?
“Since Kashkari left his job running the global equities division at Pacific Investment Management Co. in January, he has signed up campaign advisers to Mitt Romney and John McCain, met with almost 700 potential donors from around the U.S. and sought policy advice on prisons, education and the economy from such Republican luminaries as former president Bush, Texas Governor Rick Perry, Ohio Governor John Kasich, ex-Florida Governor Jeb Bush and Indiana Governor Mike Pence.”
Kashkari Bets on U.S. Rescue to Fuel Challenge of Brown
By James Nash & Michael B. Marois, Bloomberg, 12/1/13
Neel Kashkari, the former Goldman Sachs (GS) Group Inc. executive chosen by ex-Treasury Secretary Henry Paulson to help rescue the U.S. banking system, is readying a challenge to California Governor Jerry Brown even as the world’s 10th-largest economy reaches its highest level in more than three decades.
Kashkari, 40, who ran the $700 billion Troubled Asset Relief Program under President George W. Bush, has assembled a team of Republican campaign strategists and is talking to potential donors about taking on the 75-year-old Democrat, said Aaron McLear, a spokesman for Kashkari. Brown has raised more than $10 million for a possible re-election run after defeating Meg Whitman, the former EBay Inc. (EBAY) chief executive officer who now runs Hewlett-Packard Co. (HPQ), in 2010.
Former Goldman Sachs Executive Neel Kashkari has assembled a team of Republican campaign strategists and is talking to potential donors about taking on California Governor Jerry Brown. Photographer: Jin Lee/Bloomberg
Returning the California governor’s office to Republican control for the first time since Arnold Schwarzenegger’s term ended almost three years ago would mark a triumph for a party that is eying 36 gubernatorial races in 2014 and has already captured 29 statehouses, the most in 13 years.
“He has great courage and self-confidence,” Paulson said of Kashkari. “He was cool under pressure.”
“This is a guy who really is quite remarkable,” the ex-Goldman Sachs chief executive officer said in an interview. “He’d be an excellent candidate and excellent governor.”
Potential Donors
Since Kashkari left his job running the global equities division at Pacific Investment Management Co. in January, he has signed up campaign advisers to Mitt Romney and John McCain, met with almost 700 potential donors from around the U.S. and sought policy advice on prisons, education and the economy from such Republican luminaries as former president Bush, Texas Governor Rick Perry, Ohio Governor John Kasich, ex-Florida Governor Jeb Bush and Indiana Governor Mike Pence.
Brown, who has gotten a boost from a recovering economy that is producing more tax revenue, is credited with ending chronic budget deficits that plagued the state’s reputation for years and has won California its highest credit rating since 2009. A Federal Reserve Bank of Philadelphia index of California economic data rose to 157.55 as of Oct. 31, its highest level since the index originated three decades ago.
Brown’s approval rating was 55 percent in a University of Southern California/Los Angeles Times poll released Nov. 11, his highest since returning to the governor’s office after first holding it more than 30 years earlier.
Yet Kashkari, who said he voted for President Barack Obama in 2008 and favors the right of women to choose abortion and of same-sex partners to marry, says the state still faces many challenges.
Poverty Rank
“California is ranked near the top in poverty and unemployment and near the bottom in school performance and business climate,” Kashkari, who declined to be interviewed on the record, said in a statement about his possible candidacy.
“Governor Brown is great at managing the status quo, but unfortunately the status quo is devastating for millions of Californians, and no one is representing their interests,” Kashkari said. “If I decide to run, it will be to make sure every Californian has the opportunity to get a quality education and a good job.”
Colleagues and friends describe Kashkari as ambitious and quietly intense, with an inclusive and understated approach that was on display even during the darkest days of the banking crisis.
Smiley Face
A former Treasury Department employee, Jenni Main, then the TARP program’s chief financial officer, remembers e-mailing Kashkari during an especially tense period and being reassured when his reply included a smiley face. Kashkari insisted on inviting everyone to TARP policy meetings, even after the staff swelled from a few employees to about 140, she said.
As a University of Illinois graduate student in 1997, Kashkari helped develop a solar-powered race car, according to a campus newsletter. That interest in automobiles and engineering also showed itself earlier, as did Kashkari’s intellectual curiosity, said Bill Mottice, his seventh-grade teacher in Stow, Ohio, where Kashkari grew up.
“He is interested in problems and solutions,” said Mottice, who has remained in contact with his former student. “Neel is an extremely confident person and always has been.”
If he runs for governor next year, Kashkari would join two Republicans already vying to challenge Brown in November: former Lieutenant Governor Abel Maldonado and state Assemblyman Tim Donnelly, a Tea Party favorite. Democrats outnumber Republicans in California 44 percent to 29 percent.
‘Uphill Race’
“It’s a tremendously uphill race for any Republican challenger facing Brown,” said Dan Schnur, a former Republican campaign strategist who heads the University of Southern California’s Jesse M. Unruh Institute of Politics.
Though Kashkari hasn’t held elective office beyond the Finance Club at the University of Pennsylvania’s Wharton School of Business, he hasn’t shied away from major challenges.
A former Goldman Sachs vice president in San Francisco, Kashkari was 35 years old when Paulson asked him to manage the federal government’s $700 billion rescue plan of U.S. banks that were on the brink of collapse after investing in risky derivatives, a disaster that could have led to a meltdown of the U.S. economy. The Troubled Asset Relief Program was later reduced to $475 billion.
Hired by Pimco at the end of 2009, Kashkari was asked to lead the world’s largest bond fund’s expansion into equities.
‘Big Ask’
“He was fairly new to equities but he was asked to be the head of equities at one of the world’s most renowned bond organizations,” said John Longhurst, who was head of emerging-markets equity research at Pimco when Kashkari worked there. “That’s a big ask for any human being.”
While he hasn’t said whether he will run, he has hired Todd Harris, a veteran Republican strategist who’s worked for McCain and Marco Rubio, and brought on Romney’s campaign pollster Neil Newhouse and Romney’s top policy adviser, Lanhee Chen.
He is already acting like a candidate. His Twitter feed is filled with pictures of him touring California manufacturing plants, talking with school children and delivering speeches to civic organizations.
In his Twitter account, Kashkari criticizes minimum-wage increases as job killers, calls for development of shale-oil resources and refers to himself as a “funny looking bald guy.”
Indian Parentage
When Bush nominated Paulson, then CEO of Goldman Sachs, as Treasury secretary in 2006, Kashkari approached Paulson about a job, Paulson said in a telephone interview. He didn’t know Kashkari at Goldman but was impressed by the then-32-year-old’s “huge interest” in public service, Paulson said. Kashkari, whose parents had emigrated from India, was put in charge of a three-person team to strengthen financial relationships with the country.
Two years later, as banks such as Bear Stearns Companies Inc. and Lehman Brothers Holdings Inc. were on the verge of failing, Paulson tapped Kashkari to lead the effort to stave off the collapse of financial institutions and to stabilize the housing market.
“He had the confidence and the ability to do it,” Paulson said. “Frankly, there weren’t a lot of people raising their hands.”
Kashkari remained in charge of TARP until May 2009, more than three months after Obama took office. He parried skepticism about his relative youth by demonstrating cool under pressure and by methodically exploring options before making decisions, said Phillip Swagel, who was the assistant secretary for economic policy under Paulson and now teaches economics at the University of Maryland.
20-Hour Days
“We were working 20-hour days, sleeping at Treasury,” Swagel said by telephone. “He was all over the details of the things that mattered.”
Kashkari defended the Bush administration’s bank rescue plan in appearances before the Domestic Policy Subcommittee of the House Government Reform Committee, which was led by then-Congressman Dennis Kucinich, an Ohio Democrat who opposed TARP. In a November 2008 hearing, Kucinich suggested that Kashkari was placing banks above taxpayers bearing the risk of the bailouts.
“From what I’ve seen of Neel Kashkari in both public and private conversations, he was one of the most capable people that George Bush had working for him,” Kucinich said in a telephone interview last week. “He’s very bright. I think he’s a good person and I say that as a fan of Jerry Brown.”
Voter Qualms
Brown campaign adviser Dan Newman likened Kashkari to Whitman and Carly Fiorina, both Republican former executives who lost statewide races in 2010. Newman said he’s skeptical that Kashkari could overcome voter qualms about the bank bailouts.
“It’s odd to build a campaign around the claim that giving billions to Wall Street banks was more successful than Social Security, minimum wage, the New Deal and sliced bread,” Newman said by e-mail.
After Kashkari left Treasury, he and his then-wife, Minal, retreated to the three-bedroom house on 20 acres in Truckee, California, near Lake Tahoe, that they purchased in 2005 for $782,500. The Washington Post profiled his “Washington detox” in December 2009 in a story chronicling Kashkari’s work chopping wood and building a shed.
Pimco Hires
The day after the story ran, Pimco, the Newport Beach, California-based firm with $1.97 trillion under management, said it was hiring Kashkari to manage an expansion into stocks.
When Kashkari left Pimco to consider running for office, the firm managed $10 billion in equities, less than 1 percent of its total assets. Three of the firm’s four main stock funds trailed a majority of rivals in 2012, according to data compiled by Bloomberg.
The performance of the funds Kashkari managed was “anemic from the beginning,” said Geoffrey Bobroff, president of Bobroff Consulting Inc. in East Greenwich, Rhode Island. Bobroff, who consults for investment firms, said Pimco never fully committed to stocks or gave Kashkari latitude to do so.
“He came into the equation with limited knowledge of the equity world,” Bobroff said by telephone. “He was given a task at an organization that was predominately, if not exclusively, involved in fixed income.”
Pimco spokesman Daniel Tarman didn’t respond to telephone calls seeking comment.
Divorce Filing
Neel Kashkari filed for divorce from his wife of 10 years on the day before Thanksgiving in 2011, according to a filing in Santa Clara County Court. They jointly own the Truckee home, according to property records. Reached by mobile phone in Mexico, Minal Kashkari said she was vacationing and couldn’t discuss her ex-husband.
Kashkari lives in a rented three-bedroom home in Laguna Beach overlooking a cove by the Pacific Ocean. Neighbors in the Orange County town said they’ve seen him walking his two Newfoundland dogs, Winslow and Newsome, but know little else about him. His home, built in 1920, was assessed this year at $245,120, according to property records. He owns two cars, a 2014 Jeep Grand Cherokee and a 2002 Chevy Tahoe.
Brown is riding a wave of good news as he heads toward announcing whether he will seek another term. He has mostly won broad legislative approval for his agenda since taking office three years ago, with the help of fellow Democrats who control both chambers of the legislature.
Remaining Hurdles
Some hurdles remain. The state’s teachers’ pension has a $73 billion funding gap. California had the fifth highest unemployment rate in the U.S. at 8.7 percent in October, though its rate of decline was exceeded only by Florida in the last year. Almost a fourth of all Californians live below the poverty level, new U.S. Census figures show.
Kashkari’s Treasury Department experience helping rescue the economy may give him some credibility in tackling such issues, USC’s Schnur said.
“Kashkari has a very good argument to make about why his time at TARP should be viewed as a positive rather than a negative,” Schnur said. “The challenge he faces is articulating that argument in 30 seconds or less while it is fairly easy for Brown’s allies to paint him in a very unflattering way.”
