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Actions by Grassroots Collaborative

Families First Campaign and Allies

12/18/15 -

Policy experts, service providers,


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.

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