Investigation targets 20+ years of Philly deals with Wall St. bankers
Bloomberg presses for records of city Wall Street dealings
The Pennsylvania Office of Open Records has ordered the City of Philadelphia to release more information about interest-rate swaps transactions and city deals with Wall Street bankers dating back to 1990.
Last October, Bloomberg reporter Romy Varghese asked Philadelphia to make available "all records," including emails, notes and correspondence as well as financial reports, for at least 18 swaps deals, in which Citigroup, JPMorgan Chase & Co., Merrill Lynch & Co. (now part of Bank of America), Royal Bank of Canada (RBC) and Wells Fargo (and predecessors) variously set up bets on interest rates for the city, the Philadelphia Authority for Industrial Development, the Philadelphia Gas Works, Water Department, and the state Pennsylvania Intergovernmental Cooperation Authority fiscal oversight body.
According to the state office's Final Determination by appeals officer Jill S. Wolfe, the city, which has already made some swaps records available to Bloomberg, is also required to provide emails and an unedited financial report that the city has been withholding, within 30 days. Some "internal" notes that Bloomberg also requested don't have to be provided, Wolfe added, citing past cases in Radnor Township and other towns.
City officials have said they hoped to use the swaps to limit bond borrowing expenses from inflating when interest rates rise -- but ended up owing the banks and their clients millions when rates stayed low. Bloomberg did not request documents from the city school district as part of the city request; the district has also reported multimillion-dollar swaps losses. Both city and district have shown little interest in revisiting what went wrong or who should be held responsible.
Swaps critics, including City Councilman James Kenney, D-At Large, and former State Treasurer Jack Wagner, have complained that swaps enrich bankers while leaving taxpayers poorer. Swaps defenders include former City Councilman Bill Green, D-At Large, who now chairs the state's Phliadelphia school district oversight board.