Lehman Brothers managing director John Kasich kicks back in

the plush leather chair in his corner office high atop 3 World Financial Center

and starts weighing in on his latest investment-banking deal.

“It’s a small company in the health-care space,” he says.

“Today, we set up a call with the C.E.O. and C.F.O. Tomorrow,

I’ll be pitching them with our senior banker in Columbus.

It’s a private placement that will lead to an I.P.O. We are down to the eighth

or ninth inning.”

In his power blue suit, with a snappy little cell phone

attached to his belt, the 49-year-old Mr. Kasich certainly looks like an

investment banker. But there’s something about the boom of his voice-a

caucus-meeting baritone-and the way he bounds down the hall to shake a

reporter’s hand that still reeks of Washington, D.C.

Yes, it is that John Kasich. For a time in the mid-1990′s,

the Ohio Congressman was something of a C-Span celebrity-chairman of the House

Budget Committee during the Gingrich years, the architect of the 1997 budget

agreement that led to today’s budget surplus. For a while there, he was even a

blip-albeit a very small one-on the radar of the Republican 2000 Presidential

campaign.

Then he kind of disappeared. He did not seek reelection and

instead decided to do something besides politics with his life. Now he commutes

a few times a month from Columbus, Ohio,

where he lives with his wife and twin 20-month-old daughters, and tucks into

Lehman Brother’s corner office to talk about mergers and acquisitions in the

health-care space.

For a guy who was once Newt Gingrich’s right-hand man and

went head-to-head with Bill Clinton on the budget, he admits there’s a certain weirdness to it all.

“Never in my life did I think that I’d be spending time on

zero-convert coupon bonds,” he says with a smile. Zero-convert what? “It’s

where you don’t want to pay anybody anything, and you get to a certain strike

price and they can convert and buy stock.”

So don’t mistake Mr. Kasich for a rain-making Vernon

Jordan

type-happy to swoop into the city for a few power lunches and the discreet

phone call or two. He has already passed his Series 7 (the multi-hour test that

all in the securities industry must pass), and now, his sleeves rolled up, Mr.

Kasich is ready to do some deals.

“A lot of people thought that when I came here, I would be a

politician,” he says. “But I wanted to do banking. If you were to look at all

the Washington types that came to

Wall Street, how many do you think took the Series 7? No one expected this.”

For Mr. Kasich, it all came together quickly. He met Lehman

Brothers chairman and chief executive Dick Fuld at the tail end of his Presidential

run. His hat was in hand at the time, given the perilous financial state of his

campaign, but he and Mr. Fuld hit it off nevertheless. When he finally pulled

the plug on his Presidential effort, he started a round of calls to people

concerning his next move.

“I had reached the top of the mountain in D.C.,” he said.

“And I didn’t want to head down the other side.”

So when Mr. Fuld made him an offer to come to Lehman

Brothers, he jumped. “Fuld is an awesome guy,” Mr. Kasich enthuses. “He is the

kind of guy you want to go into battle with. He is a great leader. I like

people who are really smart and who are great leaders.”

It’s been remarked often that Mr. Kasich’s bouncy, almost

childlike enthusiasms-he was thrown off the stage at a Grateful Dead Concert,

and he and his close friend Gary Condit once jumped into a mosh pit at a Pearl

Jam concert-have been something of a double-edged sword for his political

career. It gave him a nice common touch (he never lost an election), but when

it came time to take his act to the national level, the pundits begin calling

for more gravitas.

Mr. Kasich snorts. “The issue was money-M-O-N-E-Y. If I’d

had more of that, I would have had all the gravitas”-he fairly spits out the

word-”in the world. And you know what? If you look ‘gravitas’ up in the

dictionary, it doesn’t exist.”

It does, actually, but no matter: Gravitas has never been a

prerequisite for investment-banking success. In the true spirit of the master

legislator he once was, Mr. Kasich talks much of relationships, teamwork and

the symphonious merging of the two.

Already, he says, his friendship with venture-capital bigwig

Mark Kvamme at Sequoia Capital has helped Lehman Brothers’ private-equity team

get into a few early-stage portfolio investments. But more than anything, Mr.

Kasich just wants to be one of the guys. “When I walk into a room and the

bankers start talking about financing, I want to be part of that discussion,”

he says earnestly. “The other day I was with a health-care banker, talking

about one of our big targets. He was saying the key is financing. I said,

‘True, but we should really think about doing some M&A for them, too.’”

Frank Quattrone he may not be, but this is just the

beginning, and Mr. Kasich seems to be enjoying the learning. And his peers at

Lehman are duly impressed. “I’m finally calling him a banker now,” chuckles Mr.

Kasich’s boss, managing director Gary Weinstein. “He’s got the lingo down; he’s

got the drive down. No doubt about it: He has added enormous value.”

The son of an outer-Pittsburgh mailman, Mr. Kasich has

always been a bit impatient for the next frontier. He escaped the steel-town

drudgery of his childhood by attending Ohio

State, became a state senator in Columbus,

and in 1982 was elected to Congress, where he soon hitched his star to Newt

Gingrich and his revolutionary band.

With a savvy eye for the C-Span camera, Mr. Kasich

presciently made himself a budget expert and, before it was chic, began

extolling the virtues of a balanced budget and fiscal rectitude. As chairman of

the House Budget Committee, his timing was perfect: A triangulating President

Clinton bought into his patter, and by 1997 a budget deal was done.

In 1998, following his reelection, Mr. Kasich turned his eye

toward Iowa and New

Hampshire. He was God-fearin’ (born again in 1987,

after his parents were killed in a car crash), a budget wonk, and willing to

grip and grin until the cows came home. Nevertheless, there was a

green-eyeshade quality to his campaign, and his voice on the big stage seemed

less authoritative than tinny.

Without any money to speak of, he called it quits in July

1999 and was the first Republican candidate to line up behind George W. Bush.

Everyone assumed he was angling for a spot on the ticket or perhaps even a

Cabinet slot. But Mr. Kasich was ready to move on.

“People have a hard time understanding how someone walks

away from politics,” he says. “Frankly, it amazes me. I’m not saying I’m done

with it; I’m just not addicted to it.”

Perhaps not. And certainly the

story of a politician licking his wounds on Wall Street after a disappointment

on the national stage is an old one. Think of Richard Nixon as a corporate

lawyer in the mid-1960′s.

Yet, like so many of the others, the move doesn’t exactly

make Mr. Kasich a New Yorker. Technically, he works half-time for Lehman,

though he says he’s putting in 40-hour weeks talking to other bankers and

clients. Working out of Columbus

with two assistants, he flies into the city a couple of times a month to meet

with New York–based bankers. On his last trip, he stayed in the Soho Grand.

“The most exciting thing that I’ve done in the city was having dinner in Little

Italy and then walking back on my own to my hotel in Soho,”

he said.

Out of the D.C. loop, Mr. Kasich must have a strong view or

two about the budget surplus, the hottest political topic in Washington

right now. How does it feel to see the surplus you crafted wither away? “I

don’t see the future of politics revolving around these issues,” he says.

“That’s not how people get elected; that’s not how people lead. I think

President Bush is doing a fine job, but I think he needs to take his case to

the people. They ought to pay down the debt and preserve Social Security, and

that’s about all I have to say about it.”

It certainly does seem that a flame still flickers deep in

Mr. Kasich’s belly. He maintains a Columbus-based P.A.C. called the New Century

Project and has a gig as a talking head on Fox News, just so people don’t

forget him. In 2008, Mr. Kasich thinks he will be tanned, rested and ready, and

having done his time on Wall Street-having finally rubbed up close against all

those big-money guys-he just might be able to scrape together enough cash to

make a meaningful run at it.

“If I can fix my fund-raising problems, I will run again,”

he says.

Mr. Weinstein says he will vote for him. And then there’s

his new mentor, Mr. Fuld. Bill Clinton had Bob Rubin, Mr. Bush had Donald

Marron-could Dick Fuld be his man to shake the Wall Street money tree?

“That’s not the way I think about it,” says Mr. Kasich.

“Right now, I work for him. I do think, though, that most people here would be

happy to see me do well [as a Presidential candidate] again. But it’s not

something I run around thinking about.”

The phone rings, and Mr. Kasich quickly reaches for it: “4:10? O.K., I’ll be right down.” It’s the

chairman’s office-a slot with the C.E.O. has freed up.

“It’s time for me to wrap up,” he says. “I’ve got to go and

see Fuld.”

And, just like that, he is gone.

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