At last week’s press conference and policy briefing, Fight for Philly and the Pennsylvania Budget and Policy Center (PBPC) announced some major findings on how Big Banks like Wells Fargo steered our schools into bad deals called “swaps.” Our goal: convince the banks to return money collected through these bad swap deals and to renegotiate the currently-active swap deals.
The Philadelphia Inquirer reported on this, saying that the PBPC and Fight for Philly “collected data on swaps losses from dozens of city financial filings and presented them Tuesday at a City Hall meeting attended by laid-off school employees and public-school parent activists.”
The Inquirer even went on to ask Philadelphia Treasurer Nancy Winkler for comment. According to their report, she disagreed with our conclusions about the cost of the swaps, but she explained that city officials were unable to give more precise numbers representing actual costs and benefits of swaps. “It would take an extraordinary amount of work,” Winkler said.
But that raises a lot of questions. We think it is important to know. Every million counts when our schools are dealing with cut after cut.
Not satisfied with this answer, the Inquirer talked to Pennsylvania Auditor General Jack Wagner, who explained that these kinds of swaps are “highly risky and impenetrably complex transactions that, quite simply, amount to gambling with public money.” The Inquirer went on to report that “Wagner’s investigation uncovered ‘deceptive’ practices and he is calling for law enforcement to investigate the ‘swaptions’ and help localities recover lost funds.”
All in all, the press seemed to understand how we fix this, with Newsworks quoting Fight for Philly political director Anne Gemmell, who said that “we think it is only fair that the banks that our city and do business with every day, renegotiate harmful deals that are currently active.”
After months of pressuring Senator Toomey to sit down and hear from the concerns of Philadelphia’s 99%, five Fight For Philly community members were able to walk into the senator’s Philadelphia office and request—yet again—a meeting with Mr. Toomey.
Fight for Philly community members Marvin from West Philadelphia, Gina from South Philadelphia, and Caesar from North Philadelphia caught Toomey’s Philadelphia staff off-guard by arriving at their office doors and demanding a meeting with the Senator. We need him to explain why he doesn’t want to extend unemployment insurance—a vital source of income for many struggling Philadelphians.
Once inside the office, we sat down with a member of the senator’s staff who eventually promised (on camera!) that Mr. Toomey would sit down with members of Fight For Philly.
Watch the video:
Since last summer, we have made several attempts to schedule a meeting with Senator Toomey, but this time we think it’s different. We left with a feeling of adrenaline, and smiled at each other in the elevator, knowing that we had come together as a group and demanded that one of our public servants come face to face with his constituents.
We headed back to our neighborhoods with a renewed sense of the power, and looking forward to holding Senator Toomey to his word to meet with us and account for why he continues to side with the 1% instead of the rest of us.
Philadelphia — Parents, students, community members, Occupy Philadelphia members and a host of community advocacy groups representing the 99% will rally at a Center City Wells Fargo branch, calling on the bank to pay back the millions they made on bad deals with the City and School District.
The large financial institutions that helped cause the Great Recession continue to cause suffering in our neighborhoods through their reckless behavior. Banks have dealt a significant cost to the city and School District through interest rate swap agreements.
According to a recent report by thePennsylvania Budget and Policy Center, the City and School District have lost over $332 million in net interest payments and cancellation fees relating to swaps negotiated with bailed out financial institutions including Wells Fargo. The damage has no end in sight. The City could potentially lose over $240 million in additional net interest payments from still-active swaps between the City agencies and the same bailed-out financial institutions if interest rates continue to remain low.
Activists and community leaders will rally with a simple message to Wells Fargo: If this big bank wishes to be a good corporate citizen of Philadelphia, it is only fair that they pay back the lucrative cancellation fees they received for terminating bad deals and renegotiate those deals which are currently active.
WHAT: Wells Fargo: Pay Back Rally
WHEN: Thursday, January 26at 5:00 p.m.
WHERE: Wells Fargo branch at 15th and Market Streets
Fight for Philly is a coalition of community members and organizations committed to holding corporations accountable for fixing the economy and calling for investments in struggling communities to create good jobs. For more information please go to fightforphilly.org.
Posted on January 19, 2012 by The Fight for Philly Staff
On Tuesday, the Pennsylvania Budget and Policy Center released a new report documenting the millions of dollars that interest rate swaps promoted by bailed-out financial institutions have cost the City and School District of Philadelphia.
Swap deals negotiated with banks such as Wells Fargo, Morgan Stanley and Goldman Sachs have cost the city and school district $331 million in net interest payments and cancellation fees, according to the report, “Too Big to Trust? Banks, Schools and the Ongoing Problem of Interest Rate Swaps.” If interest rates continue to remain low, still-active swaps could cost the city another $240 million in future net interest payments.
Fight for Philly joined the PBPC – and a host of community organizations including P.E.A.C.E., Jobs with Justice, ACTION United, Parent Power, Neighborhood Networks and Occupy The Dream – at the press conference and policy debrief discussing the findings of the report with City Council members, media and citizens. PBPC Director Sharon Ward noted that while taxpayers provided billions of dollars in bailouts to banks in the wake of the financial crisis, municipalities and school districts have been forced to cut services and lay off staff without receiving any financial consideration from the banks for the high cost of swap deals.
Three everyday Philadelphians that have been affected by these bad swap deals showed the real human cost of these deals gone wrong. Gloria Thomas, a parent of a public school student and secretary of Parent Power, spoke about how the school budget cuts are destroying our schools. She explained how “the financial situation in the Philadelphia School District has left Principals with the inability to adequately fund [school] programs.”
Gina Apuzzo also expressed her frustration with the banks. Gina, who is to stand trial in a few weeks for participating in a “citizen’s foreclosure” of Wells Fargo, said with great deal of sadness that “Big Banks like Wells Fargo accepted bail outs funds from tax payers, yet continue to engage in…predatory lending, foreclose on families…and all while continuing to make record profits by taking millions from our city.” She ended by promising that “we will continue to stand with the individuals and organizations here, today, to demand that Big Banks repay the money they’ve cost our school district and city.”
Michelle Perloff, a public school nurse that was recently laid off. Her powerful words spoke of the dire need for school nurses, and how they play a critical role. She explained how it’s not fair that our children have to pay the burden for the millions lost from bad deals that Big Banks steered our schools into.
As questions wrapped up, the room broke into energetic conversations about next steps between community leaders, press and Council staff. Fight for Philly will continue to put the pressure on the banks to be good corporate citizens by paying back the cancellation fees they received for terminating bad deals and renegotiating those deals which are currently active.
Two years after the official end of the Great Recession, Philadelphia has yet to recover. Our schools face cut after cut, we can’t find jobs, and our future looks bleak.
The same Big Banks that helped cause the Great Recession steered our school district into risky and complicated deals known as Qualified Interest Rate Management Agreements (or “swaps”).
A new report explains how these swaps put our schools and the City on the wrong side of declining interest rates and led them to pay out hundreds of millions of dollars.
Here’s what happened:
The City and School District have lost an estimated $331 million in net interest payments and cancellation fees as a result of these bad “swap” deals from bailed-out banks like Wells Fargo, Morgan Stanley, Goldman Sachs and other banks.
The City could potentially lose an additional $240 million from swap deals that still continue today with these Big Banks.
When Big Banks broke the economy, we bailed them out of their own bad investments.
So why should they profit from the poor investments that they steered our schools into?
Access the report to learn about these swaps and find out what you can do about it:
On a cold January evening, Fight for Philly volunteers from across the city gathered to share their Fight for Philly experiences from this past year.
Together, we reflected on how we — in just a short six months — have accomplished so much since the start of our campaign. All of us were in agreement: last year, we were able to hold accountable the politicians and corporations that are perpetuating policies that enrich the 1% at the expense of the rest of us.
We took special note that Philadelphians have mustered up the courage to speak up on issues that are affecting us, and it’s captured the attention of our neighbors.
In discussing our hopes and goals for this new year, Fight for Philly community members became hopeful and optimistic about what this year has to offer.
Here’s what Gina, a community member from South Philly, had to say:
“I am excited and ready for the Year 2012. Going to Washington, D.C. and marching with over 3,000 people was just a stepping stone to what I see to come.”
With the support of Gina and other members of the community, Fight for Philly is optimistic that we will continue to grow and fight for this city.
Together, in 2012, we will continue to hold corporations, banks and elected officials accountable to the 99%.
We left feeling inspired by the promising future of this organization, and feeling confident that 2012 would be the year that would catapult them into a better position to fix our city’s growing issues.