Incompetence or Corruption? NY Times Blasts Denver Schools Pension Deal
President Obama’s favorite candidate for senator from Colorado – Michael Bennet – is facing big trouble from the days when he was superintendent of Denver Public Schools.
Pointing to a king-sized mess surrounding the teachers pension fund there, the New York Times today dropped a front-page bombshell that seems to imply he was either financially incompetent or a crook.
David Sirota– liberal newspaper columnist, blogger, radio host, author and Democrat political strategist– doesn’t pussy-foot around about the situation. He comes right out and says that those are the only two alternatives to explain the mess that Bennet got the schools into.
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 [Denver Public Schools] chief to help pad the profits of his corporate friends at the time, and his future Senate campaign contributors.
In the NYT article, Gretchen Morgenson reports that the 2008 complex and “exotic” deal that then-school-superintendent Michael Bennet arranged with big Wall Street banks is costing the school system plenty:
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.
Sirota says:
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 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.
Meanwhile Felicia Sonmez and Aaron Blake at the Washington Post report:
…Obama said on [last night’s] call to 21,000 undecided [Colorado] voters and people who haven’t voted… that over the past 18 months, Bennet “has become the go-to guy for reforming America’s public schools in Congress”…
And CNN reports that both Bennet’s campaign and Denver Public Schools Superintendent Tom Boasberg—who at the time of the deal was the school system’s chief operating officer—say the Times got its facts wrong.
This should be interesting.
