By James Nashand Michael B. Marois
Neel Kashkari, the former Goldman Sachs Group Inc. executive chosen by ex-Treasury Secretary Henry Paulson to help rescue the U.S. banking system, is readying an elective office challenge to California Gov. 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 (known as TARP) 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.
Kashkari is a native of Stow and a 1991 graduate of Western Reserve Academy in Hudson.
Brown has raised more than $10 million for a possible re-election run after defeating Meg Whitman, the former eBay Inc. chief executive officer who now runs Hewlett-Packard Co., in 2010.
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 eyeing 36 gubernatorial races in 2014 and has already captured 29 statehouses.
“He has great courage and self-confidence,” Paulson said of Kashkari.
“He’d be an excellent candidate and excellent governor.” the ex-Goldman Sachs chief executive officer said.
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 and sought policy advice on prisons, education and the economy from such Republican luminaries as former president Bush, Texas Gov. Rick Perry, Ohio Gov. John Kasich, ex-Florida Gov. Jeb Bush and Indiana Gov. 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.
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.
In a statement about his possible candidacy, he said: “California is ranked near the top in poverty and unemployment and near the bottom in school performance and business climate.
“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.”
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, 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.”
A former Goldman Sachs vice president in San Francisco, Kashkari was 35 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.
Hired by PIMCO at the end of 2009, Kashkari was asked to lead the world’s largest bond fund’s expansion into equities.
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.”
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. Kashkari lives in a rented three-bedroom home in Laguna Beach overlooking a cove by the Pacific Ocean.