San Mateo County takes Lehman loss to Congress

The San Francisco Chronicle reports:

San Mateo County officials are going to Congress today to try to recover the $155 million in investment funds they lost in the bankruptcy of Lehman Bros. - the largest of any local government - during the financial crisis last September.

State and local governments lost about $1.7 billion in the Lehman failure, which rippled across the global financial system from German banks to the Marin Municipal Water District. The losses set off a banking panic, a $700 billion rescue by Congress, and a deep global recession.

San Mateo County's losses were second only to Florida's $400 million. The county was by far the largest but not the only loser in the Bay Area. Alameda County lost $5 million, and the Vallejo sanitation and flood control district was clipped by $4.5 million, the city of Fremont lost $4 million and Santa Clara County $1 million. Monterey County lost $30 million.

Treasury Secretary Tim Geithner, like his predecessor Henry Paulson, has ignored pleas from three members of the California congressional delegation to use money they said was specifically included in the $700 billion bank rescue fund to compensate local governments for the Lehman failure.

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