Where Was Jeb?
A government money market debacle unfolding in Florida is raising questions about former governor and presidential brother Jeb Bush's possible involvement in the mess.So Florida's former popular governor was at least a third responsible for the bad securities from Lehman Brothers who then hired Jeb after he left office. Sounds familiar doesn't it. But cheer up Florida - your probably not the only ones who were taken.
Florida froze withdrawals from a state investment fund earlier this week when local governments withdrew billions of dollars out of concern for the fund's financial stability.
In the past few days, municipalities have withdrawn roughly $9 billion, nearly a third of the $28 billion fund (which is similar to a money market fund) controlled by the Florida's State Board of Administration (SBA). The run on the fund was triggered by worries that a percentage of the portfolio contained debt that had defaulted.
A majority of this paper was sold to SBA by Lehman Brothers. Bush, as the state's top elected official, served on a three-member board that oversaw the SBA until he retired as governor in January. In August, Bush was hired as a consultant to the bank. Lehman spokesperson Kerrie Cohen, speaking on behalf of Bush, said they had no comment and would not say when the bank had sold Florida the paper. SBA did not return calls.
Edward Siedle, a former Securities and Exchange Commission attorney who investigates money management wrongdoing and has worked on behalf of several Florida public pension funds, thinks this is just the tip of the iceberg. He expects problems with defaulting debt to crop up in public funds across the country, especially in states with disclosure laws weaker than Florida's.