We are going to go to out on a limb and say that the Denver County Teachers Association (union), apparently part of the Colorado Education Association (union), was not entirely aware of who it was attacking when it started petitioning the Denver School Board to “demand Wall Street banks return the $300 million taken from Denver Schools”. And, credit default swaps are pretty tricky, so we’ll give the DCTA a hand.
The real villain in this mess is none other than the most vulnerable Senator in America right now – Democratic Sen. Michael Bennet.
Here’s a snippet from the petition:
Wall Street banks have taken more than $300 MILLION from Denver Public Schools. This is money that should have reduced class sizes, prevented program cuts, and provided the best possible education for our kids.
Denver Public Schools entered into three toxic interest rate swaps in 2008 with JPMorgan Chase, Bank of America, and Royal Bank of Canada. From 2008-2011, our schools lost $105 MILLION to these banks. From 2011-2013, we lost another $38 MILLION.
The deals were terminated in 2013, but doing so resulted in the following massive fees:
JPMorgan Chase: $42 MILLION
Wells Fargo: $34.4 MILLION
Bank of America: $70.5 MILLION
Royal Bank of Canada: $35.1 MILLION
That’s roughly $182 MILLION in termination fees alone. Denver taxpayers will continue to pay off these deals until 2037.
Nearly $200 million in fees is a lot. And, here’s where Michael Bennet comes in. Bennet was superintendent of Denver Public Schools from July 2005 through January 2009, when he was appointed to fill the Senate seat vacated by then-Sen. Ken Salazar. In the spring of 2008, DPS needed to raise funds to plow back into classrooms (or so the story goes). Bennet and now-superintendent Tom Boasberg struck a deal with JP Morgan to create some kind of “exotic” funding mechanism. Literally weeks before the entire market bombed. Here’s how the school board allegedly fell for the scheme, according to the New York Times:
“To members of the Denver Board of Education, it sounded ideal. It was complex, involved several different financial instruments and transactions. But, Michael Bennet, now a United States Senator from Colorado, who was superintendent of the school at the time, and Tom Boasberg, then the system’s chief operating officer, persuaded the seven-person board of the deal’s advantages, according to interviews with its members.”
Wait, so this was all Bennet’s idea? That’s interesting. Bennet cuddles up to Wall Street and school kids lose. Sounds like a winner of a campaign message. For Republicans, that is.
Oh, and, definitely sign that petition. Maybe your friends should, too.