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.

Neel Kashkari, acting interim assistant secretary for financial stabilization at the Treasury Department, raises his right hand and swears to tell the truth to the House Domestic Policy Subcommittee during a hearing on Capitol Hill March 11, 2009 in Washington, DC. Kashkari answered questions about the TARP, or Troubled Asset Relief Program, and heard complaints from both Republicans and Democrats that few people know where exactly the money is being spent. 
National Journal
Shane Goldmacher
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Shane Goldmacher
March 30, 2014, 8 a.m.

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.

“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.

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