by Lisa Lee | Published October 10, 2008 at 12:40 PM
The $700 billion bailout bill has passed both chambers of Congress, and
been signed into law. Now, the tough job of setting the rescue plan
into motion by buying toxic assets from beleaguered financial
institutions and (possibly) taking stakes in those firms begins. The
man for that gargantuan task, at least for now: Neel Kashkari. Neel who? Bypassing bigger names such as New York Mayor Michael
Bloomberg--who would rather be mayor for a third time--Treasury
Secretary Henry Paulson instead tapped fellow Goldman, Sachs & Co.
alumnus Kashkari, 35, to head Treasury's financial stability office,
set up by the Emergency Economic Stabilization Act of 2008. As part of
the appointment, Kashkari will oversee the Troubled Asset Relief
Program.
It's an interim position, meaning no congressional approval is
necessary for Kashkari to go to work. Getting Senate confirmation for a
permanent appointment can be contentious and protracted--certainly for
anyone involved in the highly contentious bailout program. Besides,
says a Treasury press officer, "We needed someone quickly."
It doesn't get much quicker than tapping Kashkari, who arrived at Treasury from Goldman at the same time as Paulson, and who has since been at the side of the embattled Treasury chief throughout the bailout negotiations. Indeed, Kashkari gets credit for drafting some of the legislation. As a result, he should also be a known figure to Congress, which could be good or bad.
Kashkari joined Treasury in 2006 as an adviser to Paulson. Before that, Kashkari had been a vice president at Goldman's San Francisco office, where he led its information technology security investment banking effort. A Goldman boss reportedly recommended Kashkari, who had shown an interest in government service after five years at the firm, to Paulson.
As one of Paulson's advisers, Kashkari helped with Treasury's India policy, energy security plans, and most importantly, with its initial response to the emerging housing crisis, including the Hope Now Alliance, a subprime loan modification initiative that launched last October. In November, he was nominated as assistant secretary of the Treasury for international economics and development. The Senate confirmed him in June, and he still holds that position, though his international affairs responsibilities will be delegated elsewhere.
The self-described free-market Republican's path to becoming the wielder of a $700 billion checkbook began in Stow, Ohio, where he was born to immigrant parents from India. After earning bachelor's and master's degrees in engineering from the University of Illinois, Kashkari worked in research and development for TRW Inc. in Redondo Beach, Calif., including developing technology for NASA space science missions. In a career shift, Kashkari then attended the University of Pennsylvania's Wharton School for a finance M.B.A., graduating in 2002. He then got the Goldman job.
The appointment has met with some criticism from folks who want someone to run the fund that's a little older and has more political chops; who has experience with the savings and loan crisis and the Resolution Trust Corp.; and who has fewer Wall Street, not to say Goldman Sachs, ties. "His appointment seems like appointing a fox to protect the hen house," Congressman Dennis Kucinich, D-Ohio, who opposed the bailout, said in a statement.
Goldman, Sachs & Co. veteran Tracy Caliendo will join Bank of America Merrill Lynch in September as a managing director and head of Americas equity hedge fund services. For other updates launch today's Movers & shakers slideshow.
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