By Bay City News Service
U.S. representatives Anna Eshoo, D-Menlo Park, and Jackie Speier, D-San Mateo, testified before the House Financial Services Committee Tuesday, April 20, about the impacts on local government agencies of the collapse of the Lehman Bros. investment firm nearly two years ago.
San Mateo County lost about $155 million in county taxpayers' money when Lehman Bros. collapsed in September 2008, out of a total of about $1.7 billion lost by local and state governments nationwide when the firm went under, Rep. Eshoo testified.
Among local agencies impacted were the Menlo Park City School District, which lost about $3.5 million; and the Sequoia Union High School District, which lost about $6.5 million.
Roughly 5.9 percent of a countywide investment pool was invested in Lehman Bros. securities.
"Up until the days before its declaration of bankruptcy, Lehman Brothers was considered one of the most trusted, reliable and safest firms to invest in," she said.
The hearing included a report from Anton Valukas, a court-appointed examiner who scrutinized the details of the financial giant's collapse.
"The examiner's report clarifies just how risky the practices and lack of transparency that sank Lehman really were," Rep. Eshoo said.
As part of her testimony, Rep. Eshoo said she and Rep. Speier will introduce legislation to aid counties still suffering from the Lehman Bros. disintegration after trying unsuccessfully last year to get money from the Troubled Asset Relief Program to help reimburse local governments.
Also testifying at the Tuesday hearings were Treasury Secretary Timothy Geithner, Federal Reserve Board Chairman Ben Bernanke, U.S. Securities and Exchange Commission Chairman Mary Schapiro, former chairman and CEO of Lehman Bros. Richard Fuld, and others.