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The bank swap investigation story just took an interesting turn for Michael Bennet and his protege Tom Boasberg. School Board members have repeatedly asked for an audit of the Bank Swap between Denver Public Schools and JP Morgan.

Tom Boasberg and the Bennet campaign have attacked these board members as asking for an audit due to political motivations caused by the Primary.

Thanks to an email record provided by a School Board member,
this can be proven to be factually wrong.

The evidence points to a concerted effort to cover up details about the swap that was reported in  last Friday's New York Times investigation .

The New York Times discovered that
Denver Public Schools has lost 25 million dollars from Michael Bennet's investment swap and will have to pay 81 million in termination fees to get out of the swap.

You can listen to an interview about this on Mario Solis-Marich' show.

School board members had been asking for a transparent accounting of the DPS banking derivative for years. Despite these requests, the Superintendent has delayed or declined the request.

However, when 3 members started calling publicly for an audit, Superintendent Boasberg attacked them and School Board President Theresa Pena (and Bennet campaign Treasurer) silenced them in meetings through procedural motions. Boasberg and the Bennet campaign stated that these board members' requests were not about finances, but were politically motivated to hurt Senator Bennet's chance in the primary.

From March 10, 2010:

"This attack is a regrettable action by a few disgruntled board members who are seeking to create a political controversy where no controversy exists," said Superintendent Tom Boasberg.

One of these school board members, Jeanne Kaplan, provided me her emails proving that this is not true - since she was asking questions about the bank swap and reports of financial losses long before there was a primary - even before Senator Bennet was in the Senate.

Ms. Kaplan began asking questions about the finances in June of 2008 which can be proven
by this list of emails.

That date is important because Michael Bennet was not appointed Senator until January 2009 - in fact, at that time, no one could have known he would be - since Barack Obama had not yet been elected and Ken Salazar had not been chosen for Secretary of the Interior.

As the emails show,

Ms. Kaplan tried repeatedly to get Tom Boasberg to explain the transaction to her and the board and explain if it was true that they were losing money only to be rebuffed and dismissed.

In the chain of Emails, examine #5 and #6 out of a total 9 emails.


From: (Jeannie Kaplan)

Sent: Wednesday, December 03, 2008 11:11 AM

To: Boasberg, Tom; Pena, Theresa's External;

Cc: Bennet, Michael

Subject: Re: DPSRS-PERA merger memo

Tom - I can't open the attachment, but is it still relevant?  What is happening=2 0with the merger, since the papers indicates it is off?  Also, can we get an update on our bond situation, please?  Have we lost a lot of money?  If so, how much?  Are there ways to stop the bleeding?  When will programs/salaries/ etc. be affected?



#6 (response)

-----Original Message-----

From: Boasberg, Tom

To: Jeannie Kaplan-

Cc: Pena, Theresa's  Bennet, Michael

Sent: Thu, 4 Dec 2008 12:04 pm

Subject: RE: DPSRS-PERA merger memo

Thanks. think the attachment is of limited relevance at this point.
I think that we are going to try to spend some time at our board meeting this month talking about all these topics so we will have a chance to discuss in some detail .




Recently, the requests made by Kaplan and the other 2 board members were met with emails like this one.

I'm extremely disappointed that our Board has not been discussing relevant issues.... I will become much more public with my displeasure if you keep this up.


The first thing is that this shows Ms. Kaplan is becoming alarmed at the reports of staggering losses incurred by DPS's Bank Swap investment long before Bennet has a primary.

Secondly, notice the date of the email - December 3, 2008.  Ken Salazar is still the Senator, and he was not picked by the Obama administration until Dec. 17, 2008.

Third, and perhaps most importantly to those outside of Colorado Politics, no one, absolutely no one, imagined at that time that the Governor would pick Michael Bennet, an unelected and mostly unknown DPS Superintendent for Senate. See here  "What the Hell!?!"

These emails prove that it is not the 3 board members who are politically motivated, but that it is Michael Bennet, DPS school board President Theresa Pena, and current Superintendent Tom Boasberg -  they are the ones who have political  motivations to prevent an audit.
There may not be anything illegal about the Bank Swap, but as everyone knows in politics, a cover up of information always gives the appearance that something is wrong or unethical.

Either way, Mr. Boasberg and the Bennet campaign have disparaged the character of 3 of School Board members simply for wanting transparency.

Their decision to support Bennet's primary challenger, at least for one of those school Board members, is directly in response to Boasberg's and Bennet's refusal to open the books on the bank swap.

And this other new detail makes it seem like that is the case:

The second contention made by Boasberg is that a savings of $20 million has been realized by the district on the deal.   David Suppes, DPS’ Chief Operating Officer, provided a spreadsheet to the School Board on April 14 on this year. It is the most thorough accounting of DPS’ costs for the transactions to date. No combination of totals from that spreadsheet can be figured to produce the savings that Boasberg touts. What is known is, in its last, audited annual financial report, DPS states that $24.9 million has been lost on the deal.

(hattip to Guerin Lee Green and Christopher Scott)

Now, Chair of the State Budget committee (Democrat Representative Mark Ferrandino) has now called for a bi-partisan audit by both the Colorado State House and Senate of this investment. (see here)
"CO-SEN: Bennet Faces Bipartisan Probe Over Wall Street Deal From Dem-Led CO Legislature"
Listen here to Progressive Talk show host Mario Solis-Marich's interview of Rep. Ferrandino about the investigation.

The real question about all this - the Bank Swap, the cover up by Boasberg, the accusations against the 3 School Board members, the email list and timeline, and the conflict of interest between Bennet, Boasberg and Pena - all of these are secondary to one question.

With an audit looming, if Michael Bennet wins the primary - how will he stand a chance in the General?


Originally posted to wade norris on Mon Aug 09, 2010 at 05:32 PM PDT.

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