New York, NY: Community groups in cities around the country are staging actions to call for greater transparency and accountability around predatory financial deals that have cost state and local governments billions and forced them to cut funding from essential services like public education. The groups are mobilizing around the release of a new report from the ReFund America Project at the Roosevelt Institute entitled “Dirty Deals: How Wall Street’s Predatory Deals Hurt Taxpayers and What We Can Do About It,” which examines how Wall Street firms misled public officials about the risks inherent in complex financial instruments like interest rate swaps and capital appreciation bonds and continue to charge outrageous fees for their services.
In a press briefing Tuesday, Roosevelt Institute Fellow Saqib Bhatti, author of the report and director of the ReFund America Project, said, “The reality is that just like banks targeted cash-strapped homeowners for predatory mortgages, they also target cash-strapped state and local governments for predatory municipal finance deals.” Bhatti added, “This is particularly disturbing because banks were responsible for causing the budget crises that they are now profiting off of. They did this through their role in crashing the economy and through a systematic effort to suppress taxes and prevent progressive revenue solutions.”
This issue has risen to prominence this month in the wake of a series of reports by theChicago Tribune detailing how the Chicago Public Schools system will likely lose $100 million on its own financing scheme. The Grassroots Education Movement, a coalition of labor, community, and watchdog organizations in Chicago, gathered at City Hall this morning to demand that Mayor Rahm Emanuel immediately file a claim with the Financial Industry Regulation Authority to reclaim the lost money from dishonest banks. Click hereto read an addendum to the report from Bhatti focusing on the predatory deals made in Chicago.
Also this morning, the MOSES Regional Clergy Caucus in Detroit filed an official request for information about predatory deals in their city, as did a group of faith leaders in New York City earlier in the week. In Los Angeles today, the Alliance to Reclaim Our Schools is calling on the city to fight predatory deals in order to fund community schools. A press event is also planned for next week in Milwaukee.
Saqib Bhatti is available for interview. For more information, please contact Tim Price.
About the ReFund America Project
The ReFund America Project, supported by the Roosevelt Institute, tackles the ongoing impact that the financial crisis has had on the financial health of America’s cities and provides a dedicated campaign team to help local organizations restore the balance of economic power to Main Street.
About the Roosevelt Institute
The Roosevelt Institute is an ideas and leadership organization founded in the belief that America should offer opportunity, a decent life, and human dignity for all. To develop a new social contract for the 21st century, we advance the work of progressive economists and social policy thinkers and support an emerging generation of leaders as they design bold solutions to the nation’s most pressing issues.
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