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July 04, 2010 01:16 AM UTC
59 Comments
Andrea Mérida
My questions below have been edited after the webmaster here deleted them saying the original was not allowed because the way I wrote them they were “attempt to float negative or damaging rumors”. I don’t believe that was true but I have taken out or reworded what they wrote was not allowed.
Ms Merida,
I appreciate your efforts to not make this a political issue but with due respect, there are very real politics at play and very serious political implications. I would appreciate your comments on the following points:
1) According to public records, it was then Superintendent Michael Bennet who, working with his then #2 Tom Boasberg, who structured the PCOP/bond financing that saved some money by issuing PCOP bonds at a lower rate which saved DPS money but actually has cost millions more than the savings as a result of fees being paid to JP Morgan among others for the bond auctions and the repeated monthly fees.
2) As a member of the DPS Board can you tell me what Mr. Boasberg’s experience was to qualify him to take over as Superintendent after Bennet’s appointment to the Senate by Bill Ritter? Did Michael Bennet personally recommend him? Did the DPS Board conduct a search for other candidates or did anybody else express an interest in being considered?
3) With respect to the decreased funding of the pensions to make it appear that DPS is more solvent, utilizing pension funds or the contribution amounts is something that is frequently done in hostile takeovers or in large private companies. Relevant to DPS, while working for Anschutz, the biggest “turn around” Bennet did according to his own bio – Regal Cinema – was completed by adjusting pension fund contributions to make the company more profitable on paper. According to financial reports filed and lawsuits filed, Bennet’s handling of pensions there combined with the loan they took out to pay a cash dividend to the largest shareholders which included Bennet and Anschutz, resulted in him making millions and Regal being sued by the Louisiana Teachers Pension fund who were harmed in the deal. As a DPS Board member and as a Colorado voter, do you see any similarities with what happened at Regal and the lower pension fund contributions into DPSRS/PERA that allows more funds to be available today for DPS operations but also means shortfalls in the pension funds that, according to DPS Board member, PERA and other reports, will mean DPS must come up with several hundred million dollars in the future?
4) In the video you posted and in other broadcast videos of DPS meetings, Teresa Pena, who is the treasurer of Michael Bennet’s campaign, has repeatedly objected to an open public hearing about the DPS PCOP and PERA true-up situation and has suggested that Ms. Kaplan and yourself are doing so for “political and personal reasons”. As a DPS Board member, do you think, given her position as Treasurer of Mr. Bennet’s campaign and the questions raised about the wisdom of Mr. Bennet’s decision to enter into the PCOP bond transactions, do you think it is appropriate for her to be voting on any matters that relate to the past acts of Mr. Bennet or do you think she should be asked to either recues herself from those votes or resign from Bennet’s campaign?
5) According to public reports and available documents, many of which have been presented at DPS Board meetings, JP Morgan was the advisor and underwriter for the PCOP bonds. Who at JP Morgan was involved in advising DPS or in the underwriting of the DPS PCOP bond transactions? What other banks advised DPS or were involved in the PCOP bonds or the interest rate swaps?
6) Shortly before the session ended, the state legislature was considering an amendment that related to transparency and access to DPS documents surrounding the PERA merger, subjecting documents to CORA and the condition of both funds. Did the DPS Board or DPS administration object to that amendment? If so, why? Did any member of the DPS Board or the DPS administration contact any members of the legislature to argue for or against that amendment or have anybody who is paid by DPS?
7) Based on the numbers you, Ms. Kaplan and Mr. MacPherson were referencing, how is it possible that DPS can both meet the true-up that will be due in a few years and not cut the DPS classroom budget by hundreds of millions?
8) Can the current PCOP bonds be refinanced again? For example, could DPS issue $1.25billion in PCOP bonds in 2015 to retire the $750 million that is outstanding plus fund $500million of the true-up due in 2015 to PERA? What if any is the fee that would have to be paid to JP Morgan and other banks to retire that debt early? What are the terms of the interest rate swaps and is there a penalty to end that prior to its expected 30 year life? Does DPS have sufficient assets to issue an additional $1billion+ in a few years?
9) In running for re-election, Mr. Bennet is has talked and written about being a successful reformer while he was Superintendent at DPS. As a DPS Board member who has access to annual reports, can you tell me what was the change in graduation and drop-out rates while he was there? Have those results changed in subsequent years? How many public schools were closed under Mr. Bennet or Mr. Boasberg? How many charter schools have been opened with their support?
10) The CEO of KIPP charter schools and DFER have been very public supporters and fundraisers for Mr. Bennet. Given both of those organizations public criticism of public schools and advocacy for charter schools, I’d like to know if Mr. Boasberg has expressed similar views to you or other members of the DPS Board. Are there members of the DPS board who regularly vote or argue in favor of more charter schools?
Please keep in mind that I have only been on the Board since November 2009, but I will comment to the best of my knowledge.
1. Yes. This is the way I understand the situation.
2. It is my understanding that Mr. Boasberg did not have extensive experience in education. He was formerly a mergers and acquisitions man at Level 3. I believe he may have taught some classes while an advisor in Hong Kong. His full bio is here: http://communications.dpsk12.o… I was not on the Board during the selection process, but my Board minority colleagues tell me that they were only allowed 48 hours to find alternate candidates to interview for the position once it became available.
3. Regarding Regal, I believe that there was an interest-rate swap entered into that caused the Louisiana State Teachers’ Pension to sue to stop it. With regard to DPS, it is my understanding that because of our own interest-rate swap deal and the cost of servicing the refinanced pension certificates of participation, we were allowed via SB 09-282 to back out these costs from our pension payments. These payments were NEVER forgiven, however. It is the state legislature’s expectation that we are to pay them via the “true up” I describe above.
4. We don’t currently have a Board policy around such conflicts of interest. It’s a little difficult to slice this one, because we all have clearly-stated allegiances. Here’s the current Board policy around conflicts of interest: http://www.dpsk12.org/policies…
5. It’s my understanding that, aside from Mr. Bennet and the district’s legal counsel, JP Morgan and others were the only ones that provided the Board any kind of financial advice on the interest-rate swap transactions. I do not yet know which individuals from those institutions were in direct consultation with the Board at that time. There are a few other swap partners, including Royal Bank of Canada and CITI.
6. Mr. Boasberg was opposed to that amendment, and he was at the state house lobbying against it. He and I had a phone conversation about it, in fact, in which he said to me that he was lobbying because it was a duplication of current rules. I argued that even if it were a duplication, it doesn’t hurt anything, and it helps the taxpayers build trust with DPS.
7. The true-up is daunting, to be sure. However, in a year in which our independent contractor hiring goes up by 47%, I wonder why we’re spending that money. We have to pay closer attention to how we’re spending current monies, therefore. Also, we have to have all information out on the table and have an honest, frank conversation with our retirees and teachers about what we can afford. We’re all in this for the kids, and I know the other stakeholders will be team players. Finally, we may have to go back to the state legislature to ask for an extension of the true-up period. It’s about being honest about our situation.
8. Refinancing the PCOPs yet again is one alternative, and it’s not an option I would rule out. Part of our cash-flow issue, however, is the fees we pay on the interest-rate swaps. We depend on the rise of the LIBOR for our dividend, and so far, we’re not getting that bounce. We’ve estimated a payout of around $80 million to buy our way out of the interest-rate swap.
9. While Mr. Bennet was the Superintendent, the graduation rate improved by 2 points. Mr. Boasberg has not been in office long enough to be able to attribute any gains or losses to his leadership. I don’t have complete numbers on the closures at the moment, but one of the reasons I decided to run was because of the way the Rishel Middle School closing was handled in my neighborhood. Though it was struggling, instead of investing resources to improve it, community was only given a 2-week notice that it was to be phased out. This alone has caused serious overcrowding in the other middle schools in my district.
10. Mr. Boasberg’s actions speak louder than words. As I was being sworn in, there was considerable debate over Lake Middle School, and a former board member admitted that it was his plan to close the public, international baccalaureate program desired by parents and instead place a charter school. Had community not rallied hard, this plan would have been carried forth. He expresses support for the Dept. of Ed’s “turnaround” plans, which basically boil down to using charter schools to “turn around” struggling public schools. The Board minority consists of Jeanne Kaplan, Arturo Jimenez and myself, and we all have a preference for strengthening our existing public neighborhood schools FIRST. With the exception of Mary Seawell, the rest of the members always push for either charters or innovation schools. Ms. Kaplan recalls that Mr. Boasberg told the previous board that the Innovation Schools Act was written to “get around work conditions.”
Hope all that helps.
removed here?
my browser says there are 6 comments but only 2 show up?
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and the consequences of his bad decisions.
Rather than allow a discussion of his shortcomings as a candidate, during Primary season,
the exposure of his vulnerability – he is unelectable – will be postponed until the General.
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It was for the same reason we have deleted comments or diaries about any candidate or issue — you can’t attempt to float negative rumors here without backing them up with facts. We’ve been diligent about enforcing this rule for as long as we’ve been around.
“I heard Candidate Smith ran a pyramid scheme,” or “It is my understanding that Candidate Smith is having an affair with his secretary,” are not okay (***THESE ARE JUST EXAMPLES***). Anyone who doesn’t understand why that isn’t okay shouldn’t be here.
I find it astounding that very few if any of Bennet supporters are questioning his involvement in these derivatives deals. Haven’t we learned our lesson from these predatory products? These are the products that have taken our country down and we have a sitting Senator that was actively involved in negotiating these products, financial products that add no value to our community or society. As in any gamble someone always loses either the investor or the borrower but the banks make millions off these products. Where is the outrage from the Bennet supporters? And aren’t you concerned that the Republicans will have a field day with this information? Surely we will lose if he wins the primary.
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if Bennet wins the Primary, then Progressives can blame the GOP Senator for everything that goes wrong for the next 6 years.
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I will not vote for Bennet. I’ll sit it out and may even vote for the Republican candidate as Bennet and Obama have been a disappointment to me and we need change. Even if it means going back a few steps by electing a Republican I believe we need this to move forward.
make my head hurt.
I don’t like Bennet. I don’t like what he did in DPS. I specifically think what he did at Manual was god awful. I am outraged at the pr campaign to make writing off 500 kids as somehow a “good thing.”
I don’t trust Bennet. We see one Bennet, now, running for election….but if he wins, I think we will see another side. I think he could be the Joe Liberman of Colorado…
I see no reason to vote for him.
I am not so glum on Bennet. I haven’t agreed with all his votes, nor have I agreed with all the Speaker did when he was last in an elected position. Norton is an empty-headed fence post. Buck–who I think will get the GOP nod–is certainly a bit smarter, but I think he would be terrible as a senator.
The idea that having either Norton or Buck there would be better for my positions is absurd.
And can you imagine Senate Leader McConnell?
they don’t vote for democratic values? We could have 6 years of Senator Buck, and then run an actual progressive against him. He said he only wanted one term anyway 😉
I’m optimistic about Romanoff’s chances though; as more and more information like this comes out about Bennet, I think people will get a real look at who he is.
so are you saying if Romanoff doesn’t get the nomination, you’re with the “sit it out or vote R in the general” camp?
Might as well start working for Buck’s campaign now.
I used to think I would, but as more an more information comes out about Bennet I’ve decided that if he pulls this off, despite all the information that is coming out him, I can’t in good conscious vote for the guy. I would probably go 3rd party.
That said, I am optimistic about Romanoff’s chances. I think they are running a solid campaign (after some bumps early on) and they will be able to pull this off.
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The Green Party and the Unity Party both have candidates on the November ballot.
There will be a primary contest to choose the Libertarian candidate.
There will be no Constitution Party candidate this cycle.
http://www.elections.colorado….
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I can’t figure out what they stand for…except America (which I would hope).
I know there are a lot of other progressives/liberals out there who feel the same way about Bennet. If he’s the nominee, the green party will probably see a little bump this year.
but I recall posting or agreeing with someone else’s post that you were here to divide and rile. Not an actual progressive in the sense that you would choose a D candidate based on alignment with your views and issues, but that after stirring up animosity and ill will in the D primary, you’d declare mission accomplished and disappear from the D scene.
Have fun voting Green or Libertarian.
And to shut off debate on the issues. He isn’t going to disappear after the primary he’s going to be more involved because Romanoff is going to win.
Sk2 is a shill, but this kid is just dumb as a stump –read his earlier posts about why we need to elect more republicans, including Buck, so it will eventually advance the liberal agenda. I didn’t make that up.
I mean…. speechless.
Knock – knock.
Who’s there?
…. I just got nothing.
to go straight to hell and not vote for Romanoff if he wins?
Or would you rather we vote for Ken Buck.
Just want to be sure where your petulence is taking you.
Keep up the good work for the GOP! Dick Wadhams will take you to lunch after the Buck victory.
you should vote how you feel is best. The more I learn about Bennet, the less I feel I could support the guy.
By the way — I love that I’m now being accused of being a republican shill, after everyone has yelled at me for being a Romanoff shill. Look — I’m voicing my opinion, an opinion I know is shared by many others.
Stryker, there’s been a strong suspicion you’re a Republican plant meant to sow dissension for some time. There’s nothing “now” about it.
but, fortunately, not many.
Stryker as far as I can tell never said anything remotely resembling your accusation. Are you really that biased towards Bennet that you just make things up?
that’;s exactly what he said — that if Bennet wins he’s not going to vote for him. But of course, he would demand that those of us who backed Bennet vote for Romanoff.
It’s too bad, really, Stryker has actually posted a few intelligent items after his odious
smear.
But, he is off his meds and back to his
Bennet supporters taking the same stand? Nothing wrong at all with the Democratic Party taking a page outta the Republican playbook and tearing itself in two?
What if every Bennet supporter decided to act like a spoiled petulant child and said “If Bennet loses primary I will either sit out or vote for the Republican.”
That’ll show those Republicans. Who cares if they trash the environment, keep lgbt as second-class citizens or worse, turn all of Colorado into the Springs, repeal health care reform, abolish the EPA, do away with the Dept. of Education, etc etc etc.
How many steps back are we willing to take?
You might want to check in with some of the Bennet supporters like Ray/Raymond and others who have posted that unless Romanoff stops saying mean things and starts saying Bennet is the most ethical guy ever who has never made a bad vote they won’t support him. There have been plenty of threats from Bennet supporters not to support Romanoff. I for one think stryker is overboard here and that even Bennet is better than Buck but it comes from both sides. My bigger concern is the more that comes out about Bennet the more I don’t think he can win the general even if his money is enough to saturate the airwaves enough to win the primary. Between his Anschutz antics, lousy handling of DPS and who knows what else, there is plenty for the Republicans to go after. I just wish Romanoff had enough money to be up on tv as much as Bennet and had the resources to out Bennet for who he really is so we’re not stuck with a well funded candidate who will be completely unelectable when the Republicans get done with him
It doesn’t matter who started it. It needs to stop. IMO if Romanoff wants to win he needs to stop attacking Bennet and start telling us who he is. Where does he stand on issues, what are his policy positions? He set the tone early as one of attack and his followers have kept that tone going. If Romanoff loses, this could be a serious problem for the Democratic Party in Colorado. Bennet took the higher road and stuck to defending and telling us who he was. His followers (with the occasional exception) are already prepped to help the Party. Of course the key to all this is Romanoff somehow getting his hands on some money ASAP. He’s gotta get on TV to get his tone changed and turn his campaign around.
I’ll vote for Romanoff if he wins. If he stops attacking Bennet and runs a clean campaign and then wins, I’ll vote for Romanoff and be happy about it.
EK – it’s easy math.
JTB as put up thirteen diaries. 11 hit pieces on Bennet, one on some polling and one on Reupublican immigration policy.
JTB is apparently incapable of putting up a diary that isnot’ attacking Bennet and instead tells us who AR is. Where does AR stand on issues, what are his policy positions? AR set the tone early as one of attack and JTB has kept that tone going.
Want to come volunteer for Buck after Bennet wins?
Please delete this post, forgot about campaigning. Although if you do you need to make Steve Harvey remove his link too.
Sure.
Senate Leader McConnell would make mainstream America finally realize how crazy the right really is and then we’ll elect true progressives in 2012 and into the future. See, a few steps back to make huge steps forward. How could you not see that?
Primaries are always good.
Primaries are always good.
Primaries are always good.
Primaries are always good.
Primaries are always good.
Primaries are always good.
What we need to advance a liberal agenda is Ken Buck in the Senate and Sarah Palin in the White House.
Say, brilliant one, how did your theory work out when we had George W. Bush and Dick Cheney in charge for eight years?
That’s why he keeps moving to the right. Give them what they want and they will eventually see the error of their ways. As for you Voyageur your name calling means you have lost the debate.
I have not “lost a debate” to you any more than Muhammad Ali in his prime lost a prize fight to Captain Kangaroo.
Kid, you’re a shill and just not in my league.
The former intelligent reporter league that now blogs for free on Colorado Pols? Or the league that once said they were leaning towards Romanoff?
Why is it you can’t allow others to have their opinion without reverting to name calling? I know you can act like a respected journalist even if you don’t have a post. And you’ve used the league thingy more than once on this blog. You’re right I’m not in your league and don’t want to be.
which will work out great for me in the upcoming elections.
OK toobad and stryker you guys are serious idiots if you’d really vote for a republican over Bennet. Even if you don’t agree with everything he’s done or how he’s voted on one or two small votes, he’s way better than Buck or Norton!!! I think Bennet has been a great Senator considering how short of a time he has been there. This diary does raise some questions that I think are fair to ask and I’m sure Bennet and his successor at DPS can explain why they did the financing. I’d like to understand some more about these bonds they did and how much they’re costing. I do think it’s a little weird to have his treasurer voting on things about auditing what he did if there are questions about it though. Until it gets cleared up I kind of think she should not be part of those votes. I know Bennet had to make some tough decisions about the DPS budget but given his background I think he probably knew how best to keep paying for the schools while also paying into the pensions even if that means having to come up with more money in a few years to catch up on the pension payments. All government agencies have to do more financing every few years and it sounds like that’s what happened here. I just think it would be good for him and Mr. Boasberg to explain all of that. The way Mr. Boasberg is snipping at the board members and how Teresa Pena is lavishing praise on both of them while accusing the other women on the board seems like she’s playing politics too.
And you are in your own world here on Colorado Pols and don’t see the forest only the trees. I’m sure Bennet is unelectable and I think you know it as well but refuse to admit that you are wrong. I’m just being honest and my one little vote doesn’t matter. I am not alone though and many Democrats outside of Colorado Pols simple will not vote for Bennet.
Is there any Democrat in office these “many Democrats” will vote for?
Surely not Blue Dogs Markey or Salazar.
Hickenlooper is too nice to O&G.
Garnett is elbow-deep in a career at Brownstein, so he’s got a load of problems.
Polis talks a good game — except when he’s on the Wall Street Journal’s pages, when he reminds us he’s rich, so he’s out.
Perlmutter is maybe best of all, but we woiuldn’t want to look into his legal career and all the schmucks he represented, would we?
Udall kowtows to O&G and wants nuclear plants, so he’s out (though not for another four years).
Oh, wait — that Flerlage guy running against Coffman — he’s got your vote because he’s never done anything controversial and hasn’t had to cast votes on actual legislation, so he’s still pure enough.
OK, gotcha
and Romanoff moved the most anti-immigrant (and useless) piece of legislation Colorado has seen and then boasted to the LA Times how proud he was of it (although he says he’s not proud about the special session 2006 now)…
Who is left to vote into office?
Thank you, Representative Merida, for this detailed response. If I may, I’d like to add a couple of things, referenced by the question numbers above.
3. Regal Entertainment Group: When Bennet “saved Regal,” he did so by reducing pension costs, as you say. I have no idea if this involved interest rate swaps, but swaps were not actually why the Louisiana State Teachers’ Pension sued. In short, after the mergers were accomplished, Bennet led the Regal board of directors to issue a special dividend to share holders. To do this, Regal had to take a sizable loan, which the Louisiana State Teachers’ Pension worried would bankrupt the company, in which the pension had invested. Who was the majority shareholder? Phil Anschutz. This dividend made Anchutz tens of millions of dollars. Who are some of the largest contributors to Bennet’s senatorial campaign? Corporations associated with Phil Anchutz.
5. JP Morgan was the advisor and underwriter for the PCOP bonds: The story of JP Morgan and the pension deal actually goes one better. DPS’ actuary on the DPS Pension Fund is JP Morgan, who, according to Mr. Boasberg, assures the District that it will be fine when the true up comes.
9. Drop Out Rate Reduction Under Bennet: The drop out rate under Mr. Bennet was flat. He did not improve it at all. However, Mr. Bennet tried to make these numbers look significantly better then they were (see http://www.denverpost.com/spen… DPS still claims these numbers (see http://www.dpsk12.org/aboutdps… For those who do graduate and get into college, a huge percentage need remedial course work, and very few graduate with a degree in 6 years (see http://www.ednewscolorado.org/…
10. Charter Schools: When I was a candidate for school board, I said in one forum that parents at Lake Middle School were worried DPS would close the school. Tom Boasberg responded in the press, “The spreading of these kinds of rumors in a partisan political environment is very harmful and unfortunate” (see http://www.denverpost.com/ci_1… What happened? Lake Middle School was disassembled. A new IB program was put in half the building and a charter school was put in the other half. Effectively, over the cries of 200 parents in one meeting on the schools future, Lake Middle School bares no resemblance to what it looked like when I made the statement on October 10, 2009.
I point this out because of what Mr. Boasberg said in regard to Jeannie Kaplan’s figures after the June 30, 2010 school board meeting: “That’s a total canard, and superintendent Tom Boasberg uncharacteristically called her out on it, saying her figures “are completely made up and false” (see http://www.denverpost.com/head… Or when issues associated with the PCOPs first came up: “This attack is a regrettable action by a few disgruntled board members who are seeking to create a political controversy where no controversy exists,” said Superintendent Tom Boasberg (see http://www.denverpost.com/sear…
Does any of this sound familiar? It tells me, start saving for the $1 billion dollar shortfall.
Christopher Scott
This has been mentioned before- do you have a citation for the case? What was the outcome?
This is a pretty good summary: http://www.nytimes.com/2004/06…
In short, the case was dismissed by a Connecticut judge.
The judge, William B. Chandler, has a history of pro-corporatist rulings. My favorite is detailed below:
You get the idea of where this guy is going, right?
Oh, well, a Connecticut judge thought the case was practically frivolous.
And in another case that has nothing to do with Colorado, DPS, nor Senator Bennet, he ruled in a way that you don’t like. Or understand, importantly.
Sure, I could see why this looks bad for someone. You get the idea of where this is going, right?