June 3, 2004. It was a bi-partisan failure.Republicans Peg Ferraro and Ron Angle joined Democrats Ann McHale and Wayne Grube in voting against the "Swaption" championed by then Northampton County Exec Glenn Reibman and his horde of financial advisors. Other Council members, both Democrat and Republican, decided to gamble on interest rates for a quick $1.9 million. They trusted finance mavens in fancy suits, who told them betting on rates was fiscally responsible. They rolled the dice that their fixed-rate bonds would remain more attractive than a variable rate-bond in 2012.
Guess what? They're losing that bet. In April, the price tag for this swaption was $13.5 million, due in October 2012.
Mazziotti told me yesterday that the bill is now up to $17.3 million.
This is what happens when you listen to people who are paid out of the financial instruments they sell. It's a built-in conflict, which they make worse by filling the campaign coffers of gullible elected officials.
For the last two days, I've questioned Bethlehem's decision to invest 12% of its pension monies into hedge funds. I've been especially critical of one creepy scheme that purchases life insurance policies from seniors, and then hopes they die. "This is not a topic for little boys," one finance wizard condescendingly tells me, for not buying into his sugar plum fairy tales like other little boys. If those little boys express doubts, the financial wizards just sprinkle fairy dust into their campaign coffers.
Concord Public Finance, one of the high-priced wizards involved in Northampton County's swaption, is now Bethlehem's financial advisor. It's very good at sprinkling fairy dust.
Update 9:30 AM: On 6/3/04, with only four votes, the swaption failed. It passed two weeks later when Wayne Grube switched to a "Yes."
Just who "advised" Mr. Reibman to go with this swaption? Who did all the behind the scenes work to put this deal together? Be honest Bernie, name the biggest champions of the deal.
ReplyDelete"This is what happens when you listen to people who are paid out of the financial instruments they sell. It's a built-in conflict, which they make worse by filling the campaign coffers of gullible elected officials."
ReplyDeleteThanks Bernie, thanks so very much for making my point. A point that you tried to squash when I presented it on the Gracedale topic on at least 2 different occasions.
The first time I presented the fact that Angle being a major land owner in NorCo, and him deciding on a tax increase may be a conflict.
Then I stated that Angle taking phone calls for the sale of Gracedale was a conflict.
Yet you denied both by saying Angle owning properties is not his fault, and Angle "just answered his phone."
You can not use the argument for one side and not the other.
I thank you for proving both of my points by using the very arguments I made.
"It is a built in conflict" I could not have said it any better!!
Thank you so very much.
At the time this deal went down, Hickey had been working in Harrisburg for six months. The biggest champions of the deal were Jeff Skinner ($50k), Conocrd Public Finance ($40-80k) & Blank Rome ($75k).
ReplyDeleteVery Interesting = Anon 12:11 = Winston Smith = 3 AM troll. Just a tad nuts.
ReplyDeleteWhen Gracedale plays out I hope you post "who the winners are." But you won't, because Angle will be at the top of the list. And that won't look good for him.
ReplyDeleteWhy don't you come up with something else other than nuts and troll? You never answer legit questions. I am not Winston Smith, and I think that your readers are starting to see through the charade that is playing out.
ReplyDeletePermission to Change Topic
ReplyDeleteOnly because you have written about this issue in the past, did you see where Cunningham states in today's Call he plans to slash the public information officer post. Isn't that post held by a former Call reporter?
Guess what? They're losing that bet. In April, the price tag for this swaption was $13.5 million, due in October 2012.
ReplyDeleteBernie
Are you saying this county will owe this much in 2012?
How much did they initially vote to invest in this fund in 2004?
ReplyDeleteWow. This county will be footing the bill for Wayne Grube's poor economic decisions for decades. Nice legacy.
ReplyDelete"Only because you have written about this issue in the past, did you see where Cunningham states in today's Call he plans to slash the public information officer post. Isn't that post held by a former Call reporter?"
ReplyDeleteShe has resigned to take a job at Lafayette. So what Cunnninham is porposing is not filling the slot.
"Are you saying this county will owe this much in 2012?"
ReplyDeleteIt might actually be higher. It's been going in that direction. 10/1/12.
"How much did they initially vote to invest in this fund in 2004?"
ReplyDeleteNothing. It is a rate swap on the $67 MM in bonds that will be outstanding in 2012.
She has resigned to take a job at Lafayette. So what Cunnninham is porposing is not filling the slot.
ReplyDelete10:50 AM
That's good to hear. To lose one's job is the worst.
What the Hell is the deal bringing Hickey into this? Just cause he is helping Callahan I don't get the connection.
ReplyDeleteThe very first comment tried to bring Hickey into this, but as I explained, he had been working for the state for six months when this went down. I defended him.
ReplyDeleteBernie, I want to make one thing very clear. They are not just using plain old "Fairy Dust."
ReplyDeleteThey are using Super enriched Gold Irish Pot'o'gold little people dust. It is some powerful stuff.
Actually Bernie, Jim was very much involved behind the scenes on many Northampton County projects.
ReplyDelete"Actually Bernie, Jim was very much involved behind the scenes on many Northampton County projects"
ReplyDeleteok. now go back to your coloring book.
Is your fairy having a wardrobe malfunction? Next time, please make sure that your fairies are a little more discrete.
ReplyDeleteHer name is janet.
ReplyDelete