If you watched the third presidential debate, you might remember the exchange where Mitt Romney criticized President Barack Obama for having the smallest Navy fleet since World War I, and Obama shot back that the U.S. also has fewer horses and bayonets.

It’s not the first time Romney’s mentioned the size of the Navy. He’s said he wants to build it up if he’s president. One of the key advisors on his buildup plan is John Lehman, an investment banker, Navy secretary under Ronald Reagan and former chairman of the Hawaii Superferry.

It’s that last connection that readers of this blog will find most interesting. But it’s also important because Lehman’s Superferry connections helped him make millions off new military ships — and put him in position to make potentially millions more if a President Romney follows through on his promise to build dozens more.

Wired‘s Danger Room goes into details about the way Lehman made back his Superferry investment — and then some — in a story published this week titled “Romney’s Big Navy Guru Made Millions From Building Ships.”

Here’s the quick summary about how that happened:

To put it plainly, Lehman’s investment in the failed, government-backed Superferry boosted Austal USA, whose rising fortunes also benefited BAE Systems, which in turn bought up Lehman’s shipyards — improved by stimulus funds — in order to work more closely with Austal USA. That roundtrip deal helped earn Lehman’s firm a reported $180 million profit. In that sense, Lehman in fact more than doubled his $85 million investment in Hawaii Superferry, with a big assist from the taxpayers.

That leads a Sunlight Foundation watchdog to say the Superferry episode “suggests his expertise lays in the strategic deployment of taxpayer resources for personal gain.”

Lehman, for his part, denies making a huge profit.

“The two Hawaii Superferrys that we built — on time, and on budget — were operated in commercial service, with no government customers,” Lehman tells Danger Room. “We were put out of service by the chicanery of the State Supreme Court and we lost over $300 million.”

If you have a few minutes, it’s worth reading the whole thing for a national look at the whole Superferry history and its implications.

— Michael Levine

Photo by Flickr user billsoPHOTO