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Why the Man Who Ran the Hated Wall Street Bailout Thinks He Can Win Election Why the Man Who Ran the Hated Wall Street Bailout Thinks He Can Win El...

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Why the Man Who Ran the Hated Wall Street Bailout Thinks He Can Win Election

Neel Kashkari wants to be California's governor—and he isn't running from TARP to get there.


(Chip Somodevilla/Getty Images)

Neel Kashkari is speaking over a plate of two over-easy eggs and wheat toast he didn't want to order. We're in a quiet San Francisco café after relocating from a noisier coffee shop down the block. We arrived full, and with drinks in hand (Kashkari, orange juice; his adviser, Aaron McLear, coffee; me, tea). "Guilt order," he says of the eggs. He eats them anyway.

Kashkari has passed through the busy downtown streets and two cafés all but unnoticed. This wouldn't be a problem except that Kashkari is running for governor of California. Among those who would recognize Kashkari—he clocked in at 2 percent in the race's most recent public poll—many would probably know him as the face of one of the most despised laws in modern American history: the bailout of Wall Street. One of its cornerstones was Kashkari's brainchild.


This is the kind of thing most candidates pivot away from as quickly as possible. Not Kashkari. "We're not running away from TARP. No, I'm running towards the TARP," he says of the $700 billion Troubled Asset Relief Program that he helped design and implement. "I own the TARP."

As if a Republican running to unseat a political icon, Gov. Jerry Brown, in one of the nation's bluest states, wasn't hard enough, Kashkari is doing so lugging the kind of baggage that has ended dozens of careers. But the bailout is more than baggage for Kashkari; it's a basis for his candidacy, his singular public-policy achievement when he puts himself before the voters. "This is one of the only examples in recent history where Republicans and Democrats worked together," Kashkari says. "…Isn't that what we all want our leaders to do?" He'll soon find out.



The 40-year-old Kashkari ended up in the eye of the biggest financial storm of the century via a circuitous route. Born in Ohio to Indian immigrants, Kashkari credits the "gift of a good education" for allowing him to end up as an aerospace engineer in California with a master's degree by age 25. He went to business school at the University of Pennsylvania, changed career directions, and landed at Goldman Sachs, where he worked from 2002 to 2006, during the run-up of the housing bubble.

In 2006, he followed Goldman's Hank Paulson to Treasury as a senior adviser. When the nation's financial institutions began to crumble, he was the man charged with buying up their most toxic holdings on the government's dime. It's a job that put him in the hot seat for hours upon hours of congressional savaging. He kept a small note card on the table in front of him as he testified. It read: "The louder he yells, the calmer I shall be."

His sharp, angular features made him the object of fascination. One congressman called him a "chump." Gawker cast him as a "congressional chew toy." Throughout, Kashkari kept his cool. People magazine placed him on 2008's list of sexiest men alive. In his photo, the only signs of hair on his immaculately bald head are glowering black eyebrows, which draw further attention to his eagle-like eyes. "B is for Bailout Guru," his entry read.

The so-called "$700 billion man" doesn't have much of a choice in making it a core rationale for his candidacy. He's refined his bailout pitch to less than 10 seconds. "We hated that we had to do it. We wanted to let all the banks fail. But we had to prevent the Great Depression and we made a profit," he says. "Most people say, 'Wow, that's amazing, I didn't know that.' "


But do they believe him? "Yes, absolutely." Sure, he says, "a lot of people who voted for it lost their seats," but it was also the rare moment of bipartisan unity. "To me, I look at Sacramento and say, if we could get them to work together in Washington for the betterment of the country then we can do it in Sacramento."


Getting to Sacramento could be the hard part. He's trying to challenge the popular Brown, who has overseen the transformation of California's chronic deficits into surpluses and is sitting on $20 million in campaign funds. Kashkari has less than one-twentieth that amount.

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"What you're looking at in this election year is Jerry Brown winning with 65 to 70 percent of the vote—which is unprecedented," says veteran California Democratic strategist Garry South. "That is not a good come-out role for a political career if you're on the receiving end of that."

The malaise of California Republicanism was on full display as party activists gathered for their recent state convention at a Hyatt near San Francisco International Airport. The weekend's theme—"rebuild, renew, reclaim"—not so subtly spoke to their current plight. Times are tough. Republicans are frozen out of statewide office. And in the last gubernatorial race, in 2010, Republican billionaire Meg Whitman spent $170 million only to lose to Brown by 13 percentage points, despite one of the best political climates nationally for Republicans in a generation. The stated goal of many California GOP strategists for 2014 is to top the one-third mark in each chamber of the state Legislature. It is as modest as it is defeatist.

"The Republicans don't have a snowball's chance in hell of winning any of the eight statewide offices," South said of 2014.

Yet Kashkari is running. Matt Rexroad, a GOP strategist in the state, said it makes sense to take a shot now, however long the odds. "California is turning further and further from Republicans all the time," he says. "If you wait four years, you're going to have less of a chance."

Indeed, Kashkari casts his candidacy as much about the future as the present: "I want to rebuild the Republican Party of California."

"I think the contrast between me and Jerry Brown turns stereotypes on their heads," he says. "Now the Republican is the young one, the Republican is the minority, the Republican came from modest upbringing, not the son of a governor." If elected, he would be America's first Hindu governor. "I think a bigger glass-ceiling-breaker will be social libertarian, young social libertarian, minority, as a Republican," he replies.

If it weren't for the bailout (along with his Goldman Sachs tenure and a spotty past voting record), Kashkari has the makings of a moderate Republican political consultant's dream. After only months on the trail, the political neophyte already has the fluidity of an old pol. He speaks in sound bites and stays on message. His campaign's slogan is a perfectly poll-tested "Jobs and education. That's it!" He's young, articulate, and a minority Republican who supports same-sex marriage and abortion rights. He has a presence about him.

"Especially after the 2012 election, I think nationally and in California, people came to view the Republican Party as the party of no, as the party of old white men, the party of the rich, the party of big business," Kashkari says. "None of that is why I'm a Republican. I'm a Republican because I believe economic growth is the most powerful force we have to lift everyone up."

Dan Newman, a Brown campaign strategist, presents Kashkari's biography differently. "He worked at Goldman Sachs. Made millions. Went through the revolving door to Treasury. Handed out billions. Went out the revolving door again and parachutes into California and says I'm ready to run the state," Newman says.

"I think it's a good thing that there's a firm that has a culture that encourages people to want to go serve their country," Kashkari says of Goldman. He hasn't let his banker past stop him from attacking the famously frugal Brown on the trail for being "born into a life of privilege." "By the way, Jerry Brown's sister was a very senior partner at Goldman whose job it was to help states go into debt," Kashkari adds. "My job here in the Bay Area was helping start-up California companies raise money and expand."

The first test of Kashkari's bailout-driven campaign will come well before November. He'll have to dispatch a Republican opponent in June's top-two primary. His chief opponent is Tim Donnelly, a self-styled tea partier who was arrested in early 2012 for trying to bring a loaded gun into an airport. Donnelly got his start as a volunteer for the Minutemen, the border-patrol group, before winning a state Assembly seat on an anti-illegal-immigration platform. Donnelly has no campaign cash to speak of but plenty of verve as he crisscrosses the state to meet tea-party activists and bash Brown, whom he calls "Marxist-progressive parading as a Democrat."

The state's Democratic Party is promoting the bout. They've put up a website pitting "Wall Street" Neel Kashkari versus Tim "Tea Party" Donnelly, complete with Photoshopped shirtless candidates in boxing shorts and gloves.

Kashkari has largely looked past the underfunded Donnelly from the start (he never mentioned him in a 30-minute interview). The most recent poll, from the Public Policy Institute of California, showed Donnelly with 10 percent support and Kashkari at 2 percent. "I think he's actually going to have a hard time beating Tim Donnelly," Rexroad says. "And I don't say that because I don't want him to."


More than two months into his campaign, Kashkari remains a candidate heavy on symbolism. He granted his first television interview, for instance, to Univision, the Spanish-language giant, to send a message to Latinos. A platform of jobs and education—"that's it!"—necessarily leaves many details blank. He has made nods toward poverty, targeting those left behind by California's turnaround (the unemployment rate has dropped 4 percentage points during Brown's term) and inveighed against Brown's pursuit of high-speed rail as a "crazy train" to nowhere.

In the interview, Kashkari named Mitch Daniels of Indiana and Jeb Bush of Florida as two recent Republican governors he would most like to emulate. Of Gov. Scott Walker, who controversially and successfully gutted the labor movement in Wisconsin, Kashkari said, "I really admire his courage."

Asked if he thought Walker's antiunion policies would be good for California, he replied, "I do," though he displayed little appetite to take on the entire California labor movement simultaneously. "I think if I said, well, I'm going to try to reform the compact between the public and all the unions, all at once, I think that that's too big, too big a bite," he said.

He recalls the recent California history of labor uniting to dispatch, first, Gov. Arnold Schwarzenegger's agenda in 2005, and later, Meg Whitman's candidacy in 2010.

Kashkari would rather divide and conquer—and the powerful teachers unions are in his crosshairs. "As I've travelled around the state and I've met with cops and firefighters and nurses. You know what, they're ticked off that their kids are in failing schools. I said, 'Why aren't we making changes?' " Their reply: " 'Oh we know why. Teachers want to make changes. But the teacher union bosses—they're resisting,' " he says. Kashkari vowed his reforms would be "strongly pro-teacher" but wouldn't reveal them just yet. "They're going to upset the status quo," he predicts.


There were many books that covered the financial crisis. Among the ones that Kashkari recommends is Andrew Ross Sorkin's Too Big to Fail, which was later made into a full-length film. "Remember the cast?" he says. "They are all these big-name guys: Paul Giamatti, William Hurt, et cetera. There is no famous bald Indian, right? So they picked this guy [to play my role] nobody had ever heard of before." He largely liked the actor's portrayal of him—with one exception. "He was too soft. He was a nice guy. I'm a nice guy. But I have a sharp edge when I need to have a sharp edge to get things done."

He seems to be saying this is not the same Neel Kashkari who was called a "chump" and a "chew toy." He's the kind of guy who's willing to take on the teachers unions, Jerry Brown—and the bailout.

"I've had somebody ask me, 'Well, how do you justify that you had to work on TARP?' I said, 'Justify that I had to work on TARP? I wrote TARP. I negotiated TARP. And then I ran it for two presidents. What are you talking about?' "

Back when he was at the Republican convention, a bead of sweat had begun to form atop Kashkari's clean-shaved head as reporters pelted him with questions. "You can sense the adrenaline of the reporters feeding off one another," he recalled later. "In those moments, it's just—let them get their adrenaline out and just focus on what we're trying to do." But you could sense that Kashkari's adrenaline was pumping, too, as a Los Angeles Times scribe asked him repeatedly about his Goldman years and whether they undercut his economic agenda. The sweat made its way from the top of Kashkari's head to his ear, before he brushed it away, along with the questions.

He made sure the word "Goldman" never came out of his own mouth. A candidate, after all, can't embrace everything.

This article appears in the March 31, 2014 edition of NJ Daily.

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