HARTFORD, CT — What many expected to be a close vote to confirm David Lehman as Gov. Ned Lamont’s choice to head the Department of Economic and Community Development turned out to be a win for the first-term governor.
Lehman, a former Goldman Sachs executive, was confirmed Wednesday by a 28-8 vote in the Senate. Three Democrats joined five Republicans in opposing his confirmation.
The three Democrats who voted against Lehman were Sens. Matt Lesser, D-Middletown, Mae Flexer, D-Killingly, and Mary Abrams, D-Meriden.
Lehman needs no other approvals, so the job is his.
Lehman’s appointment was controversial because of the work he did for Goldman Sachs during the country’s mortgage crisis.
Senators were concerned about the role Lehman played in the series of events that lead up to the Great Recession in 2008.
“Goldman didn’t know and I didn’t know that those securities were going to be worthless or that some of those were going to be worthless,” Lehman told the Executive and Nominations Committee in February.
He said all the firms that participated in the mortgage market during that time frame need to accept responsibility for what happened in the market.
Lamont, who argued that Lehman cannot be held responsible for the collapse of the mortgage market, applauded his confirmation by the Senate.
“Today’s vote was a critical step toward our aggressive commitment to growing Connecticut’s economy — through strategic policies and programs in support of all faces of our diverse economy,” Lamont said in a statement released shortly after the vote.
“Since nominating David for this role, he has hit the ground running — connecting with over 30 of our state’s business leaders, touring companies in nearly a dozen communities across the state, meeting with all regional chambers of commerce and sitting down with numerous legislators,” Lamont said.
Lehman, a few weeks ago, underwent questioning from the Executive and Nominations Committee about his role at the investment bank during the mortgage crisis and whether that should preclude him from becoming Connecticut’s chief economic development official.
Lehman told the committee that he never sold a financial product he knew was worthless.
“I did not know at the time that those securities were going to be worthless,” Lehman stressed under questioning about his position on the Structured Products Group Trading Desk and later as someone who managed a group that oversaw “collateralized debt obligations,” or CDOs.
Lehman said he didn’t begin overseeing the group that oversaw the CDOs until the summer of 2007.
Senate President Martin Looney, D-New Haven, who originally said he had concerns about Lehman’s possible role in the 2008 financial crisis, voted in favor of Lehman Wednesday.
“This nomination has generated significant controversy,” Looney said. In the end though, Looney said Lamont’s election gave “him the mandate” to pick the person he wanted to head his economic team.
Senate Republican Leader Len Fasano, R-North Haven, who also voted in favor, agreed, saying that Lamont’s election meant he (Lamont) should “be given a certain amount of deference, especially in his first term.”
Fasano also said in his discussions with Lehman he was encouraged by his philosophy that the state should not participate in programs “to lure” businesses with tax incentives and tax breaks. Fasano said Lehman said government’s role should be to create a landscape where businesses flourish on their own.
Sen. Marilyn Moore, D-Trumbull, said while she initially had some reservations about Lehman, she was won over after she met with him. She said she was also won over after she heard from executives at businesses in her district who had also met with Lehman.
“And these people understand business much better than I do,” Moore said.
Of the eight people who voted against Lehman, the only one who stood up to explain why was Sen. Rob Sampson, R-Wolcott.
“I believe our economic development policy should be created in an environment that is conducive for business to succeed,” Sampson said, “not by someone who has connections to business.”
Even though the House has no say in the approval process, House Speaker Joe Aresimowicz, D-Berlin, and Majority Leader Matt Ritter, D-Hartford, both said Wednesday that Lehman has their support.
“We need someone who has been successful in business to speak to business,” Aresimowicz said, adding that he doesn’t hold Lehman responsible for the issues at Goldman Sachs, and he said he likes the business acumen that someone such as Lehman brings to the job.
“The land of steady habits,” Aresimowicz said, hasn’t been a strong selling point as far as business development in the state.
Added Rep. Caroline Simmons, D-Stamford: “I personally support him (Lehman).
Simmons, who is co-chair of the Commerce Committee, said in her conversations with Lehman she was impressed by his “economic vision,” stating she particularly appreciated his candor about not being a fan of corporate handouts to big companies in an attempt to keep them from leaving the state.
Lehman has said his goal in leading the department would be to increase economic growth.
“The governor’s pro-growth and pro-jobs agenda is critically important to the future of our state,” Lehman said. “For too long we have been underperforming on economic growth and impacted by outbound migration.”
Lehman lives in Greenwich, but said he didn’t know Lamont before January when he reached out to the governor and volunteered his services to the state. Lehman has declined to take a salary or benefits and said he would serve indefinitely. Asked if he would stay in the job for four years, he said his tenure is up to Lamont.