As longtime observers of the Ohio political atmosphere know, Ohio Democrats like incumbent Gov. Ted Strickland, Senate hopeful Lee Fisher and incumbent Rep. Mary Jo Kilroy have one thing they do really, really well: attack their opponents for their “Wall Street values.” Ted Strickland especially is fond of attacking his opponent, John Kasich, for having worked at the now defunct firm Lehman Brothers, albeit in a fairly low-level capacity. Yet these same crusaders against Wall Street values seem especially unconcerned when those same values appear within their own party, or when the same firms are connected to their chosen leaders.

Exhibit A is a sparely covered hearing in the House Financial Services Committee, of which Rep. Kilroy is one of the junior members — a hearing which took place on April 20th of this year, and was intended to examine the arguably fraudulent accounting techniques used by Lehman Brothers during their final days. Specifically, the hearing was intended to examine an accounting technique known as “Repo 105,” which is described on page 732 of the Lehman Brothers Bankruptcy Report:

Lehman employed off-balance sheet devices, known within Lehman as “Repo 105″ and “Repo 108″ transactions, to temporarily remove insecurities inventory from its balance sheet, usually for a period of seven to ten days, and to create a materially misleading picture of the firm’s financial condition in late 2007 and 2008. Repo 105 transactions were nearly identical to standard repurchase and resale (“repo”) transactions that Lehman (and other investment banks) used to secure short-term financing, with a critical difference: Lehman accounted for Repo 105 transactions as “sales” as opposed to financing transactions based upon the overcollateralization or higher than normal haircut in a Repo 105 transaction. By recharacterizing the Repo 105 transaction as a “sale,” Lehman removed the inventory from its balance sheet.

The gimmick was, to say the least, highly unorthodox, and according to at least one witness with a legal background at the hearing in question, an example of both civil and criminal accounting fraud. In other words, this was the kind of stuff that Strickland, Fisher, and Kilroy would love to attach to any Republican they could find.

But what if it didn’t attach to a Republican? The answer to this became clear when Richard “Dick” Fuld, the former CEO of Lehman Brothers, took the stand after four hours of testimony from other high-powered witnesses, including Tim Geithner and Ben Bernanke. Fuld, who had previously served with Geithner on the Board of Directors of the New York Federal Reserve Board, was pressed repeatedly on the regulatory failures and legal ramifications of Repo 105, by questioners from both sides of the aisle. In fact, ranking Republican member Rep. Spencer Bachus of Alabama was particularly sharp, asking Fuld to clarify a remark he supposedly made: “I’m on the Board of the Federal Reserve of New York. Why would I be lying to you? They see everything.”

Fuld responded that Lehman Brothers had representatives of the Federal Reserve and the Treasury on their premises. “They saw our liquidity,” Fuld said. “They saw our capital positions. They saw our mark to market processes. And I believe that they saw everything we were doing real-time.”

“Who saw it?,” Bachus asked. Here Fuld was completely clear:

“I do recall conversations with – less so with the SEC – more so with President Geithner where we talked about potential capital providers and potential structures. I believe I discussed with him the vast number of people with whom we had conversations about additional capital, potential investors, about a structure for commercial real-estate, and I actually felt those conversations were strong and productive. If they had something to say, they would have said it to me,” Fuld said. “If the Fed had something to say to me about our position that needed to be corrected or modified or changed, I had enough conversations with Fed officials that they would have said it to me, and that is why at the third quarter, in my announcement, I said, ‘I believe these last two quarters are behind us.’”

At this point, one would have to ask why the New York Fed, or Geither himself, didn’t report any off-color items (like Repo 105) that they had noticed. The official reasoning was, according to multiple members of the committee, that the New York Fed, and similar actors, did not see themselves as having the regulatory authority to do anything, and therefore did not see a need to report anything amiss. Fuld’s co-panelist, William K. Black of the University of Missouri, confirmed this when he quoted officials from the New York Fed saying that “How Lehman reports its liquidity is between Lehman, the FCC, and the world. We have no responsibility.” When pressed on the legality of this behavior, Black was emphatic:

“We have known for a decade that these are frauds. All of the major regulatory agencies were complicit,” Black said. “If the Fed does not have rules mandating that its employees make references to the SEC, they should change that.”

At this point, one could fairly conclude that Mary Jo Kilroy, an avowed anti-Wall Street crusader, would be chomping at the bit to find out just how much Geither might have known and when.

Not so. When Kilroy’s turn came, she instead chose to ask Fuld if he’d done any preparation for the hearing because she found his constant statements that he couldn’t recall things to be annoying. To be fair, Kilroy’s questioning came late, so it is possible that she forgot that Geither’s name had come up in the excitement.

Helpfully, Fuld reminded her in response to a direct question about warnings from the Treasury Department: “President Geithner and I had a number of conversations regarding liquidity, potential capital raise. I do not recall a warning from him,” Fuld said.

And with that, Kilroy let the matter drop. No follow-up was ever asked, nor was the issue even reported. Despite being potentially complicit in accounting fraud, Geithner’s possible “Wall Street values” were ignored even by one of the most self-avowedly anti-Wall Street Democrats on the committee.

Now replace every instance of Geither’s name with the name “Kasich” and ask yourself, “What would have happened?”