educators and community residents meet with Illinois Attorney General Lisa Madigan's office, to launch exploration of legal action on behalf of IL taxpayers to recover profits taken by the Wall St. banks through toxic interest rate swap deals. 1/19/16 ReFund America Project releases report Turned Around: How the Swaps that Were Supposed to Save Illinois Millions Became Toxic, outlining the threat posed by Illinois 19 interest rate swap deals. Report projects losses totaling $1.45 billion over life of the deals. (http://rooseveltinstitute.org/wp-content/uploads /2016/01/Turned-Around-Jan-2016.pdf)
Actions by Rauner Administration and
Wall Street Banks 10/19/15 Illinois credit rating is downgraded due
to Governor Rauners refusal to sign a budget. The first
credit downgrade during the Rauner administration, it raises concerns that further downgrades could trigger termination payments of state interest rate swaps. (http://www.reuters.com/article/us-illinois-fitch-down grade-idUSKCN0SE00K20151020; https://www.civicfed.org/iifs/blog/illinois-swap-liabiliti es-looming-after-downgrades)
1/19/16 - Responding to the report, Rauner
Spokesperson, Catherine Kelly, told the International
Business Times, The Governors Office of Management and Budget is doing an in-depth analysis of these swaps in order to reduce the states payments and minimize its financial exposure. (http://www.ibtimes.com/illinois-budget-crisis-big-ban ks-arent-sharing-state-debt-woes-2271159) 3/25/16 Rauner Administration tells the State Journal Register the same thing (as the 1/19 statement). (http://www.sj-r.com/news/20160325/union-home-ca re-program-needs-state-money-being-wasted-on-inter est-rate-deals)
4/7/16 - Governors office hires Swap Financial
Group to advise on the deals. (Same consulting firm
that advised Mayor Emanuel).
4/27/16 IL House of Representatives Revenue
and Finance Committee holds a subject matter hearing on the interest rate swaps, including the looming situation with those tied to 2003 GO Bonds and the letters of credit.
4/27/16 - The Rauner administration sends no one
to testify at the subject matter hearing and has no comment.
4/28/16 - The Illinois Tollway Authority follows the
Emanuel example and voluntarily pays out the swaps and liquidity/remarketing fees on one of its bonds.
5/19/16 - The state awards a contract for Swaps
Bond Counsel to Katten, Muchin, Rosenman, a law firm
closely associated to the Chicago parking meter where former Chicago Mayor Richard Daley currently works.
5/27/16 City of Chicago Treasurer Kurt
Summers sends Governor Rauner a letter
encouraging the state to join a class action lawsuit against banks for manipulation and lack of transparency in the interest rate swap market. The state has not joined the lawsuit.
6/9/16 - Illinois suffers another credit downgrade,
6/13/16 The House Revenue and Finance
raising more concerns that an additional downgrade
could trigger termination payments of state interest rate swaps. (http://www.bondbuyer.com/news/regionalnews/illin ois-ratings-punished-for-impasse-1105811-1.html)
Committee holds a second subject matter hearing,
this time focused on the potential $870 million payout. Again, the administration sends no one to testify and has no comment.
7/29/16 Anti-violence organizations hold a
protest demanding that Governor Rauner take
action to prevent the $870 million payout and instead invest those funds in badly needed anti-violence programs that have been cut during Gov. Rauners administration. http://chicago.suntimes.com/politics/anti-violence -groups-condemn-states-toxic-swap-agreements/
7/29/16
In response, Rauners budget director
says the administration is taking actions to limit our risks and exposure on these deals. In the year prior, Mayor Emanuel used identical language in declaring that he was limiting risk and then proceeded to voluntarily pay the big banks hundreds of millions of dollars in interest rate swap payouts.
7/30/16 This is the first day on which the state can
request extension of the letters of credit. So far, the state has refused to say whether it has requested this extension, denying FOIA requests. (Information obtained via FOIA request.) -
8/24/16 The administration announces it will pay
Katten, Muchin more than double the agreed fee for its services - $210,000 instead of $100,000.
9/9/16 Panel of experts, Illinois and Chicago
elected officials and community leaders meet with
the Securities and Exchange Commission to request that the SEC open an investigation into alleged fraud and misrepresentation by the banks holding interest rate swap deals. The meeting was held in response to the delivery of 88,000 petition signatures calling for the SEC to open this investigation.
10/4/16 SEIU Healthcare, the University
Professionals of Illinois and the Grassroots
Collaborative announce a press conference demanding that Governor Rauner immediately provide answers about his actions or inaction to renew the Letters of Credit expiring on Nov. 27th .
10/4/16 Just hours before the press conference is
to start, Gov. Rauner announces the renegotiation of
the interest rate swap deals tied to the GO Bonds. His statement does not offer details about the terms of the new agreements. (http://www3.illinois.gov/PressReleases/ShowPressRel ease.cfm?SubjectID=2&RecNum=13835)
10/7/16 Coalition calls for immediate release
of details of renegotiated swap deals fearing replay of Rahms swap strategy.
10/7/16 Coalition holds community action
outside of JPMorgan Chase branch on Chicagos
south side and gets commitment to discuss demands from Chase executive.
10/11/16 Limited details about Rauners swap
agreements are released by state disclosures and Reuters article.