A video posted yesterday of Sen. Bennet in the Senate Health, Education, Labor, and Pensions Committee shows our embattled Democratic Senator getting burned by Tennessee Republican Sen. Lamar Alexander. Here’s the set up. Sen. Mumbles praised the work of Denver Public School Superintendent Tom Boasberg. Once Bennet wrapped up his 90-second slobbery kiss to Boasberg, Alexander delivered the zinger: “Thank you Senator Bennet, I think that boils down to he cleaned up after you left.”
To which Bennet unbelievably said (while laughing nonetheless): “You can’t even know half of the truth.” And, is Bennet ever right.
Just watch (and wait for the nervous laughter):
It’s possible that Alexander was just engaging in some good old fashioned ribbing. We’ve reached out to our sources to ask whether Alexander knew how close he was to the truth and will update if we hear back. The truth is that Bennet, as superintendent, signed the Denver Public Schools up for a risky pension bail-out that cost DPS millions, as the Denver Business Journal reported in 2013. Here’s what The New York Times said about the deal in 2010:
“To members of the Denver Board of Education, it sounded ideal. It was complex, involving several different financial institutions and transactions. But Michael F. Bennet, now a United States senator from Colorado who was superintendent of the school system at the time, and Thomas Boasberg, then the system’s chief operating officer, persuaded the seven-person board of the deal’s advantages, according to interviews with its members.
Rather than issue a plain-vanilla bond with a fixed interest rate, Denver followed its bankers’ suggestions and issued so-called pension certificates with a derivative attached; the debt carried a lower rate but it could also fluctuate if economic conditions changed.
The Denver schools essentially made the same choice some homeowners make: opting for a variable-rate mortgage that offered lower monthly payments, with the risk that they could rise, instead of a conventional, fixed-rate mortgage that offered larger, but unchanging, monthly payments.
The Denver school board unanimously approved the JPMorgan deal and it closed in April 2008, just weeks after a major investment bank, Bear Stearns, failed. In short order, the transaction went awry because of stress in the credit markets, problems with the bond insurer and plummeting interest rates.
Since it struck the deal, the school system has paid $115 million in interest and other fees, at least $25 million more than it originally anticipated.
To avoid mounting expenses, the Denver schools are looking to renegotiate the deal. But to unwind it all, the schools would have to pay the banks $81 million in termination fees, or about 19 percent of its $420 million payroll.”