Boasberg & DPS Board Brawl Over NYT/Bennet/Wall Street Story

Denver school board member Jeannie Kaplan and Cherry Creek News publisher Guerin Green debated DPS chief Tom Boasberg over the blockbuster NYT story reporting on Sen. Bennet’s time at DPS. It was a heated debate – listen to the podcast here. You’ll note that Boasberg (quite unbelievably) tries to label Pulitzer Prize-winning Times reporter Gretchen Morgensen a Romanoff stooge, and Boasberg refuses to answer whether he thinks it is appropriate for Bennet to have taken big campaign contributions from the banks that are profiting off the DPS deal. Listen in here. Then listen to Senate candidate Andrew Romanoff respond to the Times’ piece here (it starts about halfway in.

In a massive and well-researched story, the New York Times tonight dealt the potential death-blow to Sen. Michael Bennet’s already-struggling campaign for reelection. Just four days before the end of Colorado Democratic primary voting, the story by Pulitzer Prize-winner Gretchen Morgenson (complete with Bennet’s mug shot) details how in 2005 Bennet left his job as a corporate raider for right-wing billionaire Philip Anschutz, later became head of Denver Public Schools and in that position orchestrated a deal with JP Morgan – a deal that destroyed the Denver Public Schools’ balance sheet and made JP Morgan, Citigroup and Bank of America millions. Bennet’s senate campaign (no surprise) is a recipient of hundreds of thousands of dollars from the financial industry, including PAC contributions from JP Morgan;  individual contributions from a Citigroup lobbyist and director; and an individual contribution from a Bank of America executive.

The story is truly ugly – and I say that as an expectant father who wants to send my new child to a DPS school. The Times reports that Bennet “persuaded the seven-person school board of the deal’s advantages,” and, as KDVR Fox 31 adds, this was a deal that “was only good for big banks, which have been contributors to Bennet’s campaign.” Here are the sordid details:

Since it struck the deal, the school system has paid $115 million in interest and other fees (to JPMorgan), at least $25 million more than it originally anticipated…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…

(Bennet and DPS chief Boasberg) say that it has saved the school district $20 million it would have otherwise had to pay to cover the pension shortfall…But the savings cited by the two men do not take into account termination fees associated with the complex deal. And had the school district issued fixed-rate debt, Wall Street would not have received the cornucopia of fees embedded in the more complex deal

From the campaign trail in mid-July, Mr. Bennet reiterated his support of the deal…

In an earlier piece about this, the Cherry Creek News* sums it up:


DPS worked with JP Morgan and Citigroup on fixed-rate bonds, then worked with Morgan and others on a “swap,” betting taxpayer money that interest rates would stay high. Placing the bet earned the banks millions in fees, and when interest rates sunk to historically low levels, the bankers made more money and Denver taxpayers and schoolchildren lost. In essence, Bennet bet taxpayer money on the direction of interest rates against big Wall Street banks, and lost.

Denver taxpayers lost, but big Wall Street banks won huge, to the tune of millions of taxpayer dollars.

All of this is genuinely stunning – and politically devastating. You have huge losses for the school system that Bennet claims is his shining management achievement that makes him qualified to be senator. You have quotes from experts saying the deal would have been “highly unusual among private sector issuers like corporations” and yet, Bennet led the charge for it at the urging of JPMorgan and Citigroup, his future campaign contributors. And maybe worst of all, you have Bennet still refusing to admit any error or wrongdoing, insisting despite a huge transfer of taxpayer cash to his Wall Street donors that this deal was nonetheless just great for taxpayers.

The issue boils down to this: Either Bennet was embarrassingly incompetent in sending Denver taxpayers and schoolchildren into the jaws of Wall Street’s predatory lenders. If that’s the story, it destroys his argument that his positive “real-world experience” will make him an effective legislator. Or, Bennet was blatantly corrupt, using his position as DPS chief to help pad the profits of his corporate friends at the time – and his future Senate campaign contributors.

Either way, this makes the ads of Bennet’s opponent, Andrew Romanoff, look like they hit devastatingly close to home. For months, Romanoff has been focusing attention on how Bennet’s huge corporate campaign contributions influence Bennet’s votes, and how Bennet’s time as a corporate raider raise the ultimate question about Bennet: Which side are you on? After this New York Times blockbuster, it sure doesn’t look like Bennet has a good answer to that query.

Well, at least not good if you are a Denver taxpayer, a Denver schoolchild and/or a Colorado Senate primary voter.

* By the way, HUGE kudos to the Cherry Creek News in its political reporting on this race. This is the second investigative story the paper has been ahead of in the campaign (the first one is here).  

101 Community Comments, Facebook Comments

  1. wade norris says:

    and Donate to the General Election candidate,

    Andrew Romanoff.

    http://www.actblue.com/page/ee

  2. betsy holmes says:

    They generally devolve into nasty namecalling with little basis.  When the Anschutz story first came out, I thought that was probably the worst thing they could dig up on Bennet — something that was legal but morally bankrupt.

    This is worse.  As someone familiar with the world of finance, actions like this are not only abnormal for school districts, but outright unheard of.  Sirota is absolutely right in his assessment — Bennet was either completely incompetent or outright corrupt in his actions.

    The worst part of all this is the fact it was done to schools.

    • JO says:

      …Bennet worked six years for Philip Anschutz–part of his resume that he touts. Did that leave him “incompetent” in financial affairs? Whereas, the string of investment bankers who invested in his campaign suggests that your alternative explanation merits further consideration, 6-PACs of Integrity notwithstanding.

  3. WhitneyStix says:

    Who is this Gretchen Morgensen and where did she learn the ins and outs of journalism?? This article is severely one-sided, there are so many pieces missing or glossed over – why is there no mention of the PERA report? Has she been out of the loop? School districts all over the country and here in Colorado are laying off teachers and severing school funding – at a time when DPS is actually hiring!

    • betsy holmes says:

      Here: this is who she is.  Please don’t demean yourself trying to attack a well respected journalist.

      Gretchen Morgenson is assistant business and financial editor and a columnist at the New York Times. She has covered the world financial markets for the Times since May 1998 and won the Pulitzer Prize in 2002 for her “trenchant and incisive” coverage of Wall Street.

    • betsy holmes says:

      Here: this is who she is.  Please don’t demean yourself trying to attack a well respected journalist.

      Gretchen Morgenson is assistant business and financial editor and a columnist at the New York Times. She has covered the world financial markets for the Times since May 1998 and won the Pulitzer Prize in 2002 for her “trenchant and incisive” coverage of Wall Street.

    • JO says:

      …there are no rules on this blog barring a poster, newbie (account created at 9:33 this very evening, 28 minutes before the first post–could that be some sort of record?) or veteran, from exposing a complete lack of sophistication and knowledge. To the contrary. And while you’re at it, why not inquire, “What is this New York Times, and where did it learn the ins and outs of journalism?”

    • cscottrun4it says:

      …why is there no mention of the PERA report?

      While the DPS pension shortfall is coupled to the subject of the NYT story, it is not the center of the story.  It is critical to understand, DPS took this $750 million loan, and is paying through the teeth to service the loan.  The loan has cost taxpayers $113 million to date, way above the $73 million sold to the DPS Board of Education in 2008.  Further, not one penny of the $113 million has gone to pay any of the loan’s principal.  (Stop me if any of this sounds familiar.)  

      The future of the DPS pension system becomes involved because of SB 09-282, which governs the merger between the PERA and the DPS pension system.  This legislation allows DPS to deduct the costs of servicing the $750 million loan from its contributions to PERA.  That is what is building the unfunded liability in DPS’ PERA account.

      Want to know more?  Read this: Chris Romer and the $1 Billion Retirement Question

      • MADCO says:

        It is relevant though

        DPS refinanced, and added debt to deal with the PERA merger.

        Could have done a fixed rate- simple to understand, easy to manage.

        Did a forecast that showed they could save big if they did a variable rate swap structure instead.

        Actual expense didn’t hit the forecast.

        And resulting expense is “roughly in line with what the school system would have paid in a fixed-rate transaction.

        While it is possible that the annual costs of the Denver deal will come down in the future, they are now roughly in line with what the school system would have paid in a fixed-rate transaction.

        • Sharon Hanson says:

          Could have done a fixed rate- simple to understand, easy to manage.

          Did a forecast that showed they could save big if they did a variable rate swap structure instead.

          Actual expense didn’t hit the forecast.

          While it’s plausible that a regular run-of-the-mill school board member without a finance background would be dazzled and enticed by the banks marketing practices, a couple of savvy business leaders with backgrounds in mergers and acquisitions that did not consider the down side of this investment is unconscionable.  And voters and taxpayers alike have a right to know exactly why Bennet made this decision to gamble without disclosing to the board and others the risks and downside of this investment.  At the very least he should have known that the appearance of a quid-pro-quo existed when a few banking executives were going to make a ton of money off these derivative deals but instead of caring about the appearance this cozy relationship created he went and voted in favor of the banks a few times and he received large amounts of campaign contributions from these very banks involved in the transaction.  

          • MADCO says:

            Board approval was unanimous.

            If any of them didn’t understand, they should have voted no, or recused themselves.

            It was just too confusing or too hard is whiney bs.

            Reminds me of another iconic American woman –

            • Sharon Hanson says:

              Misogyny is an added weapon to use to attack the messenger when you don’t like the message.  I have a great deal of trepidation when is comes to a cornered rat like you MADCO.  When cornered, you attack the messenger or the message.

              But MADCO the truth is Bennet will not win in the general because of this and you are delusional if you think this doesn’t matter.  He basically set up a deal that will cause the DPS grave harm over the thirty years of the contract unless they pay astronomical amounts of money to unwind the deal and that is a taxpayer and voter issue.  Tell me did the taxpayers deserve this and what will you label them for not understanding a complex deal for which they had no input in the negotiating of this likely-to-bankrupt DPS deal.  And what about our inner city kids that will suffer for years because of the greed of a few bankers?  

              • MADCO says:

                It plainly explains that DPS has debt expense. They would have debt expense whether they did a simpler fixed rate refinance or the variable rate swap refinance they did.

                Morgensen writes that the overall expense to DPS is approximately the same (it’s alttle less so far- approx $20million) as it would have been had DPS done a simpler fixed rate transaction.

                In the end, a deal that JPMorgan said would have an interest rate of around 5 percent spiked to 8.59 percent during its first fiscal year, and has since settled down to an average rate of 7.12 percent today.

                While it is possible that the annual costs of the Denver deal will come down in the future, they are now roughly in line with what the school system would have paid in a fixed-rate transaction.

                Could get better- but so far approximately the same as it would have been.

                Gretchen Morgensen is great.

                I’m not even sure I’m capable of that misogyny thing- I’ve used the same “math class is tough” video with several posters here- some of whom are self identified male.

                millions, hundreds of millions, billions.

                Large numbers and I think that’s what has making wildly tall claims.

                Maybe not. You hated Bennet from the get go – misandry?

            • ColoDem Di says:

              I was working amidst a sea of big, sweaty, uber-macho quant-jock men in the bond options pit at the CBOT (options on futures are derivatives of derivatives – OMG!) when this Barbie came out.  I thought it was hilarious and ran all over the city to get one of my own – to no avail.

              Lighten up Sharon… and try to get a clue while you’re at it.

              • Sharon Hanson says:

                He’s damaged goods and can’t possible hide behind Bennet Pols and their shills for Bennet.  They can’t save him in the general.  Now go back to your pit with your sweaty, uber-macho quant-jock men and while you’re at it get a life of your own.  

              • MADCO says:

                They’re pretty rare- Mattel did the ole rectalcraniotomy pretty fast and pulled most of them.

                But I was living in San Francisco and knew several seriously po’d feminists – so tried to stock up for birthdays and holidays.

                • ColoDem Di says:

                  You still have a stockpile of “math class is tough” Barbie from 18 years ago?  That’s awesome!  If you’ve got one to spare, I’ll gladly take it off your hands.  

                  I had forgotten about the one version of Barbie that was even better.  Some group that was ticked off about the “math class is tough” thing took 300 Barbie dolls and exchanged the voice recorder with a bunch of GI Joe dolls.  The result was Barbies that said, “Eat dirt, Cobra!” and GI Joes that said, “Let’s go shopping!”  

                  • MADCO says:

                    I had 3 or 4 at one time. I’ll have to check the toy collection. Should be easy- there’s only one Barbie in with all the comic books and other stuff.

                    GI Barbie was pretty funny.

                    And i’ve known a few sweaty quant jock women too, though  none were Гјber macho, and none were in the pit. They were all in offices or cubes removed from the ring.  

    • Sharon Hanson says:

      She has written many articles on derivatives and other complex financial instruments for the New York Times.  She breaks in down so that even simpletons can understand.

      It is a well written piece and very damaging to Bennet. You can be sure he will not win in the general election after this article appearing on the front page of the New York Times.  

      And Colorado Pols hasn’t front paged this; I wonder what that means.  

      • AristotleAristotle says:

        And that Pols wrote its own front-page diary.

      • MADCO says:

        While it is possible that the annual costs of the Denver deal will come down in the future, they are now roughly in line with what the school system would have paid in a fixed-rate transaction.

        This story is a little less single subject than I would prefer, but it’s solid enough.

        DPS refinanced, and added debt.

        Could have done a fixed rate- simple to understand, easy to manage.

        Did a forecast that showed they could save big if they did a variable rate swap structure instead.

        Actual expense didn’t hit the forecast.

        And resulting expense is “roughly in line with what the school system would have paid in a fixed-rate transaction.”

        • MikeD1970 says:

          you are taking one part of the entire story out of context and repeating it as often as you can.

          The larger point that she makes is that DPS lost far more money than they would have.  It is true that the rate “is now” similar to what it would have been if it was fixed to start with, but for the years in between then and now DPS suffered greatly.

          • MADCO says:


            The Denver certificates contained debt issues that had variable rates and were to be resold to investors in weekly auctions; the arrangement carried an annual interest rate of around 5 percent, not counting fees and costs associated with that type of debt. Fixed-rate debt would have cost 7.2 percent.

            Even if the fees were over 2%  annualized- sounds like a push.

            In the end, a deal that JPMorgan said would have an interest rate of around 5 percent spiked to 8.59 percent during its first fiscal year, and has since settled down to an average rate of 7.12 percent today.

            Averaging 7.12….just about the same as the fixed rate would have been.


            While it is possible that the annual costs of the Denver deal will come down in the future, they are now roughly in line with what the school system would have paid in a fixed-rate transaction.

            So itDPS projected it could save big money. Instead it saved far less than was projected- saving just a little instead of the big savings that was forecast.

            The only way you can say DPS lost far more money” is to compare what actually happened with the forecast at the time.  Insane.

            Instead, as Morgensen does, the only smart way to do it is to compare expenses if DPS  had done taken the other path.  ”roughly the same”

            • MikeD1970 says:

              and repeat your talking points.  You are talking about the current rate.  I’m talking about the debt costs from the time between then and now.

              • MADCO says:

                I’m talking about the expense of the debt from the time between the refi and now.

                So was Gretchen Morgensen.

                • MikeD1970 says:

                  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.

                  • Raf says:

                    There’s no termination fees, per se – that is, fees charged solely for ending the transaction.

                    What there is is a “make- whole” provision that runs both in favor of and against the banks (and DPS), depending on where interest rates are at the time the clause is exercised.

                    DPS has the sole option to terminate the swap, which is priced based on publicly quoted Bloomberg rates. If interest rates rise, then the banks owe a termination fee to DPS should DPS choose to end the Pension Certificate of Participation (PCOP).

                    If interest rates fall, then DPS owes a termination fee to the banks, assuming that they want to end the PCOP.

                    At the end of the day, though, the only folks who can end the transaction are DPS. And if they’re smart – they’ll end it when rates rise, so as to avoid the very situation you claim is so disastrous.

                  • MADCO says:

                    The forecast said they would spend X.

                    They spent X + $25million

                    But they still spent less than they would have if a) they did othing and b) if they refinanced into a simpler fixed rate.

                    DPS only pays the term fees and refinances if/when the market makes sense to do so.

  4. JO says:

    “Michael Bennet is the go-to guy for education.” So sayeth the President on the phone the other night.

    Go to for what? How to structure a shady deal and get screwed in the process? Maybe Bennet should be transportation secretary: “C’mon, let me take you for a ride, citizen.”

    Time, methinks, for the one voter who ever voted for Bennet for public office to come forth and explain his vote. Gov? Still here? Let me interrupt your bike ride for a second and ask you…

    Time for the Man Who Would Be Governor to tell us whether, in light of the light shed on a shady past, he’s still enthusiastic about his former aide de camp. OR did LoopdeLoop admire such dealings, maybe hope he could engineer some of his own, etc.?

  5. RedGreenRedGreen says:

    and promptly orchestrated a deal with JP Morgan as head of Denver Public Schools

    Is that really what the story “details”? Because even Sirota should know there are some problems with that statement.

  6. cscottrun4it says:

    When McInnis was caught plagiarizing legal opinions, MoveOn.org called for him to drop out.  

    Will MoveOn.org do the same now, after it has been disclosed by the NYT that Bennet as wasted tens of millions of taxpayers dollars playing poker with the boys from JP Morgan?

    Hmm…

    • MADCO says:

      While it is possible that the annual costs of the Denver deal will come down in the future, they are now roughly in line with what the school system would have paid in a fixed-rate transaction.

  7. IndyNinjaIndyNinja says:

    Or are the AR-bashing stories the only thing allowed anymore?

    This is a huge story and Colorado Dems deserve to know about it in the waining days of this election. CPols should put this on the front page and keep us all updated regularly as the story develops.

    Meanwhile, AR better clear out the rest of his ad buy for this alone. This wins the election for him if he plays it right.

  8. EmeraldKnight76 says:

    As to the article itself, I agree that it is potentially devastating depending on how many ballots are left out there to be filled out. This clearly would have been far more harmful to Bennet’s campaign a week or two ago but will still sting. It will be interesting to hear Bennet’s response.

    One thing that I didn’t get from the article, and maybe I missed it cause it’s late:

    What benefit did Michael Bennet get from this deal? I ask because Sirota and others make it sound like Bennet planned this by tying it, once again, to campaign donors. Are they trying to insinuate that Bennet knew he would be running in a primary and set up this deal in advance? I’m not asking this to be snarky. I really want to know…

    • wade norris says:

      that got this:

      Bennet’s senate campaign (no surprise) is a recipient of hundreds of thousands of dollars from the financial industry, including PAC contributions from JP Morgan;  individual contributions from a Citigroup lobbyist and director; and an individual contribution from a Bank of America executive

      .

      http://www.coloradopols.com/di

      • Raf says:

        Wait, don’t answer that. Of course you are.

        But the question remains – donations aside, from a campaign that he didn’t know he’d be waging at the time the deal was structured, what benefit did Bennet get from this deal?

        Because it’s not at all apparent to me.

        • EmeraldKnight76 says:

          Apparently Wade is trying to prove that Bennet was somehow psychic. Interesting.

        • wade norris says:

          from a campaign that he didn’t know he’d be waging at the time the deal was structured, what benefit did Bennet get from this deal?

          Sure, he did not know at the time he would be working on a future campaign, but now that he is a Senator, that money he made for JP Morgan through this Denver Public School Swap has given him plenty of friends for his campaign, while Denver Public School Teachers are left wondering about their retirement.

          Guess he thought career teachers were ‘deadwood.’




          “When (Arne Duncan) came to visit with Michael Bennet, he called us ‘deadwood’…

          they didn’t want career teachers”

          interesting to note, the only other major city school in debt to a similar deal is Chicago Public Schools – headed by, Arne Duncan.

          http://articles.chicagotribune


          It is about jobs and patronage. Top teachers either fled or were lured to the top schools. But middle-rung teachers and below are the backbone of the teachers union.

          • Raf says:

            I haven’t seen this much dancing around the question since Bill Clinton waffled on what the definition of is was.

            If you’re not going to answer the question, don’t. But don’t come back, wave your arms around, and filibuster the question.

            For what it’s worth, Wade, I’ve grown up around educators my entire life. My step-father is an educational policy expert, and because I’m interested in policy, I picked up a fair amount from him.

            While we believe that both Bennet and Duncan are wrong on some pretty fundamental issues (we both thought Obama should’ve appointed Linda Darling-Hammond, instead, and made that recommendation to the President), to simply brush aside the idea of reform by constantly claiming that reformers are anti-teacher is simply despicable.

            I’d continue, but I suspect that you’re only interested in educational policy only to the degree that it serves politically useful to you. So talking more about this issue with you would be a waste of time for me.

            • wade norris says:

              I suspect that you’re only interested in educational policy only to the degree that it serves politically useful to you.

              I believe Public Education is the one equalizing factor in our country – able to make wealthy and poor alike able to become well educated.

              And, the new ‘Race to the Top’ model simply puts too much emphasis on standardized tests, which sends money into testing emphasized curriculum, and undercuts social studies, music and the arts funding – even physical education is being cut from school funding to prepare for yearly tests. And these tests are a Republican idea and  are making a Bush felon – Neil Bush, Millions.

              No Bush Left Behind

              The President’s brother Neil is making hay from school reform


              The President’s younger brother Neil takes a different tack: He’s selling to the test. The No Child Left Behind Act compels schools to prove students’ mastery of certain facts by means of standardized exams. Pressure to perform has energized the $1.9 billion-a-year instructional software industry.

              http://www.businessweek.com/ma

      • MADCO says:

        Individuals with jobs?

        So that just leaves the PAC donations – which is an arguemtn for a different day.

        BTW- PAC contributions form JP MOrgan also have gone to the DSCC.  But it’s ok because it’s indirect and a low percentage.

    • Sharon Hanson says:

      The rest of us are left to wonder; is he that incompetent or is he corrupt?  

    • JO says:

      Given  that Bennet served as sales agent for the banks foisting this deal onto what appears to be a naive board of education, and given how it turned out, what does that say about Bennet’s “experience,” “leadership,” and “competence” — as a school superintendent, as an investment banker, or as a United States senator? Put another way, with Michael Bennet “fighting for Colorado,” why not just surrender now and just continue paying through the proverbial nose? “Rubes Admit Defeat; Banks Lead Wall Street Victory Parade.”

      Bennetistas may pray that enough ballots have already been returned so that this story comes too late to influence the outcome of the primary. BUT they can be sure that this story will be fodder in the general election, if Sen. PACman were to be the nominee, AND they can be sure that subtleties are lost in political campaigns, insofar as the general perception has become and will continue to be: Bennet sold a bad deal, later he took contributions from the same shysters who benefited from the deal. “What did he know and when did he know it” is the stuff of Congressional hearings, not political campaigns!

    • Diogenesdemar says:

      whether he would be running for the Senate?

      No, but did Bennett think at the time he would be working for DPS for another 20 years or so until he would retire into the pension fund?  I really kind of doubt that.

      Investment whiz making a long term personal interest investment in himself?  Not so far-fetched an idea is it?

  9. MADCO says:

    While it is possible that the annual costs of the Denver deal will come down in the future, they are now roughly in line with what the school system would have paid in a fixed-rate transaction.

    This is buried in a bigger broader story – but DPS tried to save money, ended spending the same as the they would have in a simpler fixed rate transaction, so far.

    Oh, no- DPS didn’t save millions? Quick- get the pitchforks.

    • MikeD1970 says:

      MADCO you are worse than Wade Norris, simply spamming these diaries with one out of context quote over and over again.

      The rate is now similar to what it would have been under a fixed rate, but for the years between when the deal was made and now DPS lost an unbelievable amount.

      You are taking one sentence out of context.  As others have pointed out, this is a massive article from one of the top financial writers in the nation — I’m sorry but either you don’t actually understand this or you are intentionally being misleading.

      • MADCO says:

        She doesn’t say the rate is now the same- she says the overall expense has been roughly the same as it would have been.

        The Denver certificates contained debt issues that had variable rates and were to be resold to investors in weekly auctions; the arrangement carried an annual interest rate of around 5 percent, not counting fees and costs associated with that type of debt. Fixed-rate debt would have cost 7.2 percent.

        In the end, a deal that JPMorgan said would have an interest rate of around 5 percent spiked to 8.59 percent during its first fiscal year, and has since settled down to an average rate of 7.12 percent today.

        Averaging 7.12. just about the same as the fixed rate would have been.


        While it is possible that the annual costs of the Denver deal will come down in the future, they are now roughly in line with what the school system would have paid in a fixed-rate transaction.

        DPS projected big savings. Instead it saved far less.

        • MikeD1970 says:

          your quotes don’t match what you say they do.

          • EmeraldKnight76 says:

            why not prove it by explaining where or how? Why not quote where the article says what you are claiming it says.

            At least MADCO is quoting the article to support his arguments. You just keep claiming he is misleading with nothing to back it up.

            • MADCO says:

              It’s a complicated subject.

              The article is not just about DPS.

              It’s hard.

            • MikeD1970 says:

              Honestly what was really frustrating me was that s/he was essentially spamming the diaries on this issue with the same long thing in response to anything.  People (probably including MADCO) have attacked others like Wade Norris for doing the same.  Frankly it’s obnoxious for anyone to do it.

              Here is a response from the article:

              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.

              • MADCO says:

                than it originally anticipated.

                Anticipated: as in compared to the forecast that they used to decide on the variable rate swap structure.

                Yes- the debt has been more expensive than was forecast – but it’s been “roughly in line with what the fixed rate would have cost”   It’s actually been a little less.

                • Sharon Hanson says:

                  Bennet could have negotiated a plain vanilla financial instrument that would have been a safer and less risky way to go with taxpayer money.  Instead he chose the financial instruments that would pay eye-popping fees and commissions to the banksters. With these swaps it doesn’t matter who wins or loses the banks make millions on these deals. And they add no value what-so-ever to our society. The image I get is one of Bennet and the banksters feeding at the trough at the expense of hard working teachers and inner city students that will no doubt go without for many years because of this deal.  

                  You defend the indefensible.  

                • jpsandscl says:

                  Really, how do you keep doing it?

                  Boards don’t make budgetary decisions in a vacuum. They plan according to projected revenues and expenses. When they have budgeted only a certain amount for interest, then find out they were off by $25 million, this has a very serious impact on a budget.

                  The benefit a fixed interest provides is predictability. They don’t have to ever worry about these “little” $25 million surprises that come along and wreck their budgets. They can plan appropriately for an expense that will remain consistent.

                  So don’t make this disingenuous claim that because they didn’t achieve their intended savings there is no real impact because there is.

      • dwyer says:

        We know that Adams 12(?) got zapped for a procedural problem in administering the tests.  My guess is that DPS did quite well or Obama would not have been on a robocall town meeting tauting Bennet’s ability as the “go to guy” on education.

        By Tuesday when the CSAPS are finally released, I suspect I will be the only one left in the state who didn’t “already know.”  

  10. StrykerK2 says:

    This is obviously a large point on contention.  Hopefully this language helps clear that up:


    The fund turned in a dismal performance in the credit crisis – as was the case with most such funds – losing almost twice the $400 million borrowed by the school district to plug the pension gap. As a result, the school system’s pension shortfall recently stood at around $386 million, only slightly lower than it was two years ago, and even though $400 million had been funneled into it in 2008.

    • MADCO says:

      Yes, the markets have tanked due to the Bush recession and Greenspan bubble popping.

      Which has nothing to do with DPS’s need to refinance their existing debt, nor to take on the 400m DPS need to make the PERA merger work.

       

      • Sharon Hanson says:

        add no value to society and only enrich the banksters. You might say that these instruments and many others like them that have taken our country to the brink of disaster, only serve one purpose and that is to redistribute the wealth in this country to a few greedy bankers.

        So spin all you want MADCO, this NYT story is bad news for Bennet and if we’re unlucky enough to have him win in the primary he will not win in the general.

  11. bud says:

    and somehow Sirota posted a story last night before anyone knew about the NYT story. So Romanoff and Sirota knew about it before it posted, and Morgensen couldn’t be bothered to contact Bennet for his viewpoint before the story posted. It’s too bad the NYT posted a story so many can drive a semi through.  She should be more concerned about her reputation.  

    • davidsirota says:

      Yes, I must be guilty of…well…something…because I posted something a few hours after the New York Times posted its story on its website.

      Yes! There must be a conspiracy! Because it is so hard to imagine why someone would post something after the largest newspaper in America published a story.

      Conspiracy, I tell you! There’s a conspiracy…uh…somewhere!!!!

    • Sharon Hanson says:

      Keep crying like a baby and attack the messenger that always works except when it doesn’t and it won’t save Bennet, the Banker Bought Boy.  That’s BBBB for short.  

    • jpsandscl says:

      you should be more concerned about your reputation. Your vacuous posts are pretty self-incriminating.

      This article wasn’t an opinion piece where Morgensen needed to contact Bennet for any reason. It was investigative journalism explaining how a poor investment decision is having a negative on a large urban school district that is already struggling financially.

      • bud says:

        an election, and when she is quoting a DPS board member who is a high donor and shill to Romanoff (which she didn’t bother to include in the story).  How much of her information did she get from the shill?  My reputation is quite intact, but I question a journalist who inserts herself into a political race and can’t identify her sources and, in fact, the instigator of the story as being fully aligned with a political opponent.  

  12. bud says:

    Why do Romanoff and Sirota care more about this than job creation?  People are getting pretty hungry while living on the street.  Most people in Colorado don’t understand this issue and don’t particularly care.  It’s the economy and jobs stupid.  Remember that the number was 58 percent who named the economy and jobs as their number one issue, and instead the talk is about a story that has been rehashed and rehashed for quite some time.  

  13. dwyer says:

    The fact is that none of us understand that deal and none of us has a clue whether it was a legitimate risk or wildly irresponsible.  We need someone we can at follow along with.

    Where is Gunny Bob when we need him?

  14. dwyer says:

    I am out of the loop, do not have the secret password or handshake. Do you?

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