Investigative journalist Daniel Denvir reports that the Philadelphia school district may sue banks and Wall Street firms that sold defective financial instruments to the school district, causing massive losses.
Denvir writes:
“Philadelphia and other cities have filed similar lawsuits, contending that such “interest-rate swaps” — billed as a protection against rising borrowing costs — were tilted in banks’ favor through the fraudulent rigging of the London Interbank Offered Rate, or Libor.
“The School District took out swaps with Wachovia (purchased by Wells Fargo in 2008), Merrill Lynch, Goldman Sachs and Morgan Stanley. But a lawsuit could name more banks as defendants. Philadelphia’s lawsuit names banks that were direct counterparties and also those that are accused of rigging Libor, including Citi, JPMorgan, RBC, Bank of America, Barclays, Credit Suisse, Deutsche Bank, RBS and UBS.”
Diane Ravitch's blog 
Interesting…seems as though the very folks who impoverished public schools are also seeking to profit from public school’s demise.
Maybe these folks are smarter than we think.
Not smarter, just more avaricious than the average scoundrel.
http://www.vanityfair.com/business/2013/09/michael-lewis-goldman-sachs-programmer You might find this interesting. The comments in particular are well-informed.
Thanks, Michael for the reading!
The scene in Philadelphia is depressing, to say the least. Budget short falls, RIFfed staff, closed schools, angry constituencies, and frustrated professionals are just part of that scene. An ex-student of mine, who spent 2-3 years as a Teach for America teacher in Philadelphia, occasionally responds to my inquiries about events there. She now works for Steppingstone Scholars. Will be interested in her take on this situation.
And their defense? The school district obviously didn’t do “due diligence” (it’s the banks get- out -of- jail card). Seriously, why does anyone do business with these banksters?
Imminent death focuses the mind…
January 2012 report release
http://fightforphilly.org/2012/01/31/local-national-press-cover-our-swaps-policy-briefing/
http://fightforphilly.org/bigbanks/
Why Are Philly’s Big Banks “Too Big To Trust”?
In recent years, Big Banks in Philadelphia and around the country have marketed complex financial products—known as interest rate swaps—to our schools and our city. These deals were sold to schools and the city as a theoretical way to lower the costs of borrowing. It was a way to take variable rate interest loans and effectively turn them into fixed rate loans.
But after the 2008 economic meltdown—caused, in part, by the Big Banks—interest rates crashed to nearly zero. These low rates, which were enjoyed by the banks after they were bailed out, left our School District and many more on the short end of now-bad contracts.
In an effort to end these bad deals, our school district and city have lost hundreds of millions of dollars. These deals are draining away millions that could otherwise go to maintain essential services, close budget gaps and retain good workers.
The Fight for Philly campaign is partnering with communities, parents, students, and many other organizations to hold banks and corporations accountable. We are asking the very same banks that claim that they are “here to help” to pay back the millions of public dollars that they cost our schools and our children when they steered us into these Wall St. engineered deals.
Our banks may fail to recognize the need to be good corporate citizens in our region. They may refuse to pay back the millions in cancellation fees. They may refuse to re-negotiate current debt deals with our city and schools.
But if this becomes the case, then we the people who have suffered the many cuts to our essential services and our children’s schools as a result of banking greed need will work tirelessly to:
Organize and encourage individual citizens to leave those banks
Empower local institutions to leave those banks
Support and encourage our city and school district to stop doing business with these banks
Our communities have been deeply damaged by the irresponsible greed of our banks. Despite this, these banks were deemed “too big to fail” and were bailed out.
Now, years later and after the stimulus money has dried up, our schools and communities are suffering cuts to services and cuts to our schools. It is unconscionable that these same banks continue to rake in profits on ill-conceived, ill-marketed deals.
We call upon the banks that our city and schools do business with every day to remedy this situation and re-negotiate in good faith. Otherwise, we call upon our elected leaders to lead the way to justice and divest all public dollars from banks which do not prioritize our community.
While this is important to call out predatory banking, this event should not serve as a smokescreen for the attack on public education by the “corporate ed reformers”!
Forgive my cynicism but this sounds like a perfect Urban Shrinkage Plan. You break the back of a community through bad banking practices to disrupt and shatter the citizens and residents of the community by shuttering and closing their schools etc. And after they have disappeared into the global migration you get the same banks who helped to bring the city to it’s knees back to reinvest through a lawsuit to regain the very money they stole back into the infrastructure for recapturing the sophisticated/cosmopolitan life and property of yore. So diabolical that even Stephen King could not have dreamed such a nightmare for the poor, disenfranchised, the Miss Liberty refuge of tired yearning to be free immigrants. You choke the services, the finances, the life blood of the already deteriorating community and wait until you feed the desperate leaders a bogus financial plan not understood or suspected by them and abbra cadabra bankruptcy or damn close! Far fetched? I think not! You have to love the genius of the deceitful, paternalistic, and the shamless. They will say this was for your own good. Or was it Goode or Nutter? Never mind the Governors involved in this slowly evolving dissolving plan of public distruction and eventual restructuring. Hmmm! Let’s see, then there is Detroit, Chicago, New Orleans, and on and on and ……..the proof is in the pudding! Just say’in!!!
If this rigged bank manipulation is draining many US cities by the same corrupt scheme, isn’t this a call for the US Attorney General to investigate and prosecute ?
You would think. But look at the profit being made through the For Profit Prison system which should be another questionable concern for the US Attorney General investigation division but that works for their purposes so why investigate? If the banking manipulation can be part and parcel to ‘cleaning’ up and out the city why should they investigate? A dime short and a day late,proactive or reactive? Being part of something in a proactive way to support the effort for other purposes aside from the greed makes a perfect marriage between government and corporate/banking interests. Just say’in and only my opinion.