Taking Stock: Did Wall Street Prepare Lisman to Be Governor? 

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• Marc Nadel

In her 2009 book documenting the demise of Bear Stearns, financial reporter Kate Kelly described a gathering of the Wall Street firm's top brass on one of its final days.

The group was preparing for the investment bank's sudden sale to rival J.P.Morgan as the 2008 mortgage meltdown escalated. "The gathering was a who's who of senior talent at Bear," Kelly wrote. Among them: Bruce Lisman, cohead of the firm's global equities division.

Now a Republican candidate for governor of Vermont, Lisman had reached the upper echelons of the firm before it came crashing back to Earth, as Kelly described in her book, Street Fighters: The Last 72 Hours of Bear Stearns, the Toughest Firm on Wall Street. He managed more than 2,000 people in a division that grew under his watch from $50 million to $2.3 billion in annual business.

"Those meetings were mostly listening to what was happening to us," Lisman said, recalling what he described as a painful time. "It was too late to say anything."

Eight years later, the 69-year-old Shelburne resident maintains that he played no role in the over-leveraged mortgage trading that brought the company — and the nation's economy — crashing down. "My division was so far away from any of that," Lisman said. "I only knew equities."

His friends, former colleagues and disinterested observers agree.

"Bruce had no inkling that was happening," said Steven Begleiter, a former senior managing director at Bear Stearns. "His decisions were not the problem."

Now, as he campaigns for governor a world away from Wall Street, Lisman's business background serves as both a selling point and an albatross. He's trying to persuade voters that his career prepared him to manage taxpayers' money. But after a lifetime in the boardroom, he struggles to relate to voters — and explain how he'd get the job done.

In recent weeks, advisers to his Republican gubernatorial opponent, Lt. Gov. Phil Scott, have seized on populist sentiment to pillory Lisman's professional pedigree. Scott's campaign coordinator, Brittney Wilson, described Lisman as "a guy whose Wall Street firm went belly-up, brought America's economy to its knees and bankrupted millions of Americans."

"Despite all of that, he walked away with bags of money, which says everything that needs to be said about his ambitions and his tactics," Wilson continued.

In an interview, Scott himself said his staffers had used stronger language than he would have.

"I don't disparage anybody for making money," he said. But, he added, "I do think the tactics in D.C. and tactics on Wall Street are different from here in Vermont."

Lisman is, as he often says on the campaign trail and in television ads, "not the usual guy" in this campaign. Unlike his rivals — Scott and three Democrats — he has never held elected office.

His record is the most elusive, his background the least typical and his bank account the biggest: Last December, he revealed a personal net worth of $50 million.

He's not been afraid to spend on his burgeoning political career. Over four years, he sank $1.3 million into a "nonpartisan" advocacy organization he founded, Campaign for Vermont, which ran television and radio ads featuring Lisman. As a candidate for governor, he reported spending $453,843 of his own money by mid-March. A new report is due this week.

His campaign finance report shows that the connections he forged on Wall Street pay dividends. One former colleague, Richard Harriton, was fined $1 million by the U.S. Securities and Exchange Commission. He gave Lisman $1,000. Another, Robert Steinberg, lists the $54 million former home of Donald Trump as his address. He gave Lisman $4,000.

Lisman wasn't born into the Wall Street world. He grew up in Burlington's Old North End, the son of a schoolteacher and a secretary, and he graduated from Burlington High School and the University of Vermont.

He started in the financial industry at the bottom, as a file clerk. His boss admonished him to just file the papers, not read them, he said. He soon was being paid to read the paperwork as a stock research analyst and then as director of research for Lehman Brothers — another firm that wouldn't survive the 2008 crash.

Moving to Bear Stearns in 1984, he advanced from research director to cohead of global equities, a position he held for 21 years until the company's 2008 demise. He made the transition to J.P.Morgan for a year, retiring in 2009.

At Bear, Lisman oversaw offices around the world where employees did research and bought and sold stocks for hedge funds, mutual funds and pensions — institutions that managed other people's money.

Asked to explain his work, Lisman initially offered a characteristic and frustratingly vague answer. "I managed people," he said.

Barbara Bishop, an attorney who worked closely with Lisman at Bear Stearns, sees it differently. "That is such as understatement. That cracks me up," she said of Lisman's response.

Bishop conceded that Lisman can be unclear. "A lot of people don't understand Bruce because he has a way of speaking — he ricochets from topic to topic because his mind goes so fast," she said.

But that didn't hinder his success at Bear Stearns, where he had a reputation for excellent people skills, she maintained.

"You're making incredible decisions, often under huge pressure," Bishop said. "It's bang, bang, bang."

Lisman managed people around the world with large egos but also oversaw the details of running a business, including how much the division spent on computers and whether clients were happy, Bishop said.

In her book, Kelly described the firm as "a dysfunctional family, driven by greed and a complex code of internal politics."

Lisman insisted that was an after-the-fall assessment that didn't describe his division. "We worked together," he said.

Lisman was a key player who knew how to turn profits, according to former colleagues. He was inducted into Wall Street's top-secret Kappa Beta Phi society in 2001, reporter Kevin Roose reported in New York magazine three years later. Lisman was also a member of Bear Stearns' elite management and compensation committee, which determined employees' pay.

Lisman declined to reveal how much money he made or lost at Bear Stearns.

"I lost a lot. That's what I'd say. We mostly got paid in stock," he said, quickly adding, "You'd never hear me complain. I did fine."

Despite his rank, Lisman said he didn't have a say in the company's overall direction.

"I offered my opinion. I doubt anybody was listening," he said of his firm's last months. "We were pretty siloed." Watching the company go at a fire-sale price to J.P.Morgan was devastating, he said, but, "I don't think we had a choice."

Begleiter, who donated the maximum $4,000 contribution to Lisman's campaign, said he often relied on Lisman's judgment at Bear Stearns. "He's a great decision maker and consensus builder," Begleiter said. "One hundred percent of the time, he had the right view on complicated issues."

Bishop, who owns a vacation home in Manchester, said she thinks the skills Lisman learned on the Street would translate well to running the state. "Why doesn't Vermont need a problem solver who knows how to take a problem and figure out a way hopefully not to waste money and find the right end result?" she said.

Win Smith, president of Sugarbush Resort in Warren and a former executive vice president at Merrill Lynch, said that a background in the financial industry could prepare a candidate to run the state.

"I wouldn't expect him to be an expert on every single aspect of government, but he could put together a good team," said Smith, who has not endorsed a candidate. "Vermont could really use somebody who understands the fiscal challenges of the state."

That's how Lisman pitches himself — as someone experienced in hiring the right people and managing projects. But putting Wall Street skills to work in government is not easy, or common — though others, such as former New Jersey senator and governor Jon Corzine, treasury secretary Hank Paulson and Congressman Jim Himes (D-Conn.) have made the jump.

Vermonters have been able to glimpse Lisman's management style. He served on the University of Vermont Board of Trustees from 1996 to 2004, when it hired Judith Ramaley as president — and he chaired the board and search committee when it later hired her successor, Dan Fogel.

Ramaley resigned after four years in 2001 following a hockey hazing scandal and a faculty union drive.

"Not every hire is going to work out," Lisman said.

Fogel served 10 years but resigned as president in 2011 amid allegations that his wife had an inappropriate relationship with a UVM associate vice president.

"Dan Fogel was an excellent hire," Lisman asserted, arguing that he reestablished the university's competitive reputation, beefed up faculty salaries and revitalized aging campus infrastructure.

But Lisman has yet to demonstrate that he can govern in the public eye. As he campaigns, he speaks as if he's in a boardroom full of people who have to be there and know the lingo.

At a June 27 meeting with the Professional Fire Fighters of Vermont in Barre, Lisman left members looking listless. Eschewing the microphone, he was marginally audible and made little effort to win the firefighters' endorsement, though the labor union has in the past gone to bat for both Democrats and Republicans.

Lisman did assure his audience that he opposes right-to-work laws that allow workers to benefit from union negotiations without paying dues.

But when the firefighters asked what he would do about workers' compensation that doesn't cover all the risks they face, he replied, "I'd like to know more."

Asked about fire academy funding, he said, "Well, if I knew more about it, I might be able to tell you more about it."

At a forum later that day in Burlington sponsored by groups of social services providers, Lisman gave answers the audience was looking for. He said, for example, that he supported increased funding for mental health treatment.

But Lisman, a small and bullish man who looks like he's perpetually shrugging, also rifled through many answers with perplexing generalities.

"The person you elect will tell you a lot about what you expect to happen in 10 years, but in fact it'll direct us to that direction," he said in his closing statement. "I'm not suggesting a revolution. Rather, I'm suggesting competence. Instead of incoherence, objectivity about what we need to do."

Pressed for details on his positions, Lisman responds as if he's unaccustomed to sharing his opinions publicly.

He has called for repealing the Act 46 school district consolidation law. Yet when asked how, as a Shelburne resident, he voted last month on whether to consolidate districts within the Chittenden South Supervisory Union, he initially refused to say. His vote was private, he said.

Reminded that he's a candidate for governor and his vote would reveal how he thinks Act 46 is playing out in his own community, he relented: "I voted no."

The merger vote passed overwhelmingly in Shelburne and four other towns.

Lisman is convinced, nonetheless, that Vermonters are fed up with how their government is run, whether it involves consolidating school districts or the beleaguered Vermont Health Connect insurance exchange.

"I believe in strong management," he said at the Burlington forum, taking a swipe at departing Democratic Gov. Peter Shumlin. "I believe we're supposed to hire the best people we can find, not the best people we know."

First, he'll have to persuade voters that a career Wall Streeter can do that.

Lisman dismissed the suggestion that his big-bucks background makes it hard for him to relate to average Vermonters. "Nobody asks me about that," he said. "People are generally unhappy with the government that serves them. That's what people talk to me about."