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A blog post by Mark Price, originally published at Third and State.

The Pittsburgh Post Gazette reports this morning that Bank of New York Mellon has reached a partial settlement with the Securities and Exchange Commission (SEC). Under the deal, the bank will stop listing services as "free" that it, in fact, charges a fee for. What remains to be settled are monetary damages for allegations that the bank overcharged pension plans and other clients for financial services.

Bank of New York Mellon Corp. Tuesday reached a partial settlement with the U.S. Justice Department in a lawsuit accusing the custody bank of systematically overcharging pension funds and other investors by adding hidden spreads to foreign currency trades executed on their behalf...

The Pennsylvania Treasury Department has said it will decide this month whether to file suit on behalf of the state's pension funds.

Bailed-out banks making money from complex financial deals. Where have we heard that before?

Philadelphia should demand that Wall Street banks refund half a billion dollars lost or owed by city agencies on interest-rate swap contracts that were supposed to cut city borrowing costs but instead swelled budget deficits at the worst possible time, a Harrisburg-based advocacy group and its labor-union allies say...

The School District of Philadelphia paid a net $161 million to Morgan Stanley, Goldman Sachs, and Wells Fargo Bank on 10 interest-rate swap contracts connected to bonds the district sold, starting in 2003...

Borrowers using the Philadelphia Authority for Industrial Development paid $33 million to JPMorgan Chase Bank and Merrill Lynch Capital Services on swaps sold in connection with a series of bond issues, and owe up to $111 million on swaps still in force.

Philadelphia International Airport paid an estimated $41 million to JPMorgan to settle swap options issued in connection with bond refinancing and owes an additional $58 million on swaps still in force.

Philadelphia water and wastewater agencies paid more than $10 million to Citigroup for swap options connected to bond refunding and owe an additional $16 million on swaps still in force.

And that's not counting swaps liabilities for the Board of City Trusts (which runs Girard College and Wills Eye Hospital), Philadelphia Gas Works, and other public agencies.

The Pittsburgh Post-Gazette reports this morning that the Port Authority of Pittsburgh, which operates the region's public transit system, is planning a new round of fare increases and services cuts. If completed, the cuts will mean the agency will provide half the level of service it provided a year ago. Remember this next time you read about a Pittsburgh employer complaining they can't find workers.

Venerable bus routes serving Mt. Lebanon, Coraopolis, Green Tree, Mount Washington, Oakmont, Edgewood and Sewickley will be among 45 routes eliminated by the Port Authority in September if there is no solution to a statewide transportation funding crisis.

Riders who aren't stranded will pay more — the authority plans a 25-cent increase in the base Zone 1 fare, to $2.50, on July 1. Zone 2 rides will go up 50 cents, to $3.75. It will be the fourth fare increase in the past 4 1/2 years. The last was in January 2011.

As part of a 35 percent reduction in service hours that would take effect Sept. 2 — the largest cut in the agency's 48-year history — all of the authority's current 102 bus and rail routes would be scaled back, some ending altogether and others with deep drops in off-peak and weekend service...

The reduction, coupled with a 15 percent service cut last March, would leave the region's biggest transit agency with barely half of the service it offered a year ago.

An estimated 500 to 600 jobs could be eliminated, with most of that achieved through layoffs, authority CEO Steve Bland said...

According to the agency's most recent audit, state operating assistance decreased by $34.2 million in the fiscal year that ended last June 30, a 19 percent drop. State aid makes up more than half of the authority's income.

Loyal readers of this blog know that the Pennsylvania Department of Public Welfare (DPW) has proposed limiting access to food stamps and terminated health care for thousands of children. These moves have been advocated by the Corbett administration as common sense efforts to root out fraud and abuse. The Philadelphia Inquirer reports this morning that an advisor to the DPW advocates for these kind of changes as part of a broader culture war. Warning to readers, to read some of the really creepy stuff I'm just going to send you to the full article.

A high-level Corbett administration adviser resigned his $104,470 position Tuesday after questions were raised about his outside role as editor of a conservative faith-based journal...

[Robert W.] Patterson was hired in October by Welfare Secretary Gary Alexander as a special assistant to help set policy for services provided to millions of Pennsylvanians through the Department of Public Welfare (DPW)...

In the journal, Patterson has weighed in on everything from what he called "misguided" programs that grew out of the 1960s War on Poverty - programs now administered by DPW - to what he described as a woman's ideal role in society: married and at home raising children.

Carey Miller, spokeswoman for DPW, said Patterson submitted his letter of resignation Tuesday.

Asked why, she said Patterson had formally requested to remain in his position as the journal's editor while working for the state, but his request had been rejected.

She would not say why Welfare Secretary Alexander had hired him, whether Alexander was familiar with his writings, or whether he agreed with Patterson's oft-expressed view that many social welfare programs have worsened the lot of the poor by promoting single motherhood and displacing marriage as a way out of poverty.

"It is irrelevant to get into that," Miller said. But she added: "I can say that the journal does not reflect the views of the Corbett administration."

In the journal's summer issue, Patterson authored a piece defending what he called "pay-as-you-go entitlements," such as Social Security, but advocated scaling back assistance programs such as Medicaid, food stamps, the children's health insurance program, and cash assistance for the poor.

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Comment Preferences

  •  Thanks, but..... (1+ / 0-)
    Recommended by:

    (i) Who signed the contract with GS and MS?  Shouldn't they be held accountable?  Should the city of Philadelphia go after them criminally for gross incompetence?

    Isn't a contract a contract?  

    If Joe Middle-Class bought Netflix at 280 dollars, and it subsequently tanked to 100 dollars, does he have the right to ask Netflix to buy back his stock at 280?

    (ii) I'd like to see the salaries and benefits of the incompetent Pittsuburgh city administrators whose gross incompetence led to the fare hikes.  Are any making more than 70K a year.  A better question is, should ANY city worker, including the mayor, of a city like Pittsburgh make more than 95K a year.

    So many Dems talk a good game, but when it comes to choosing between cutting their own pay or asking the working poor to pay higher fees, they opt for self-preservation.

    (iii) A special assistant in a mid-sized town government making over 105K a year?  

    I'm sorry, but the GOP is right when they criticize the salaries and benefits of municipal government.  They are GROSSLY overpaid.

    Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project.

    by PatriciaVa on Wed Jan 18, 2012 at 07:19:22 AM PST

    •  Ohio governor Kaisch significantly increased (0+ / 0-)

      the salaries of his aides over what those positions had paid under Governor Strickland because he supposedly could not get qualified people to work for the previous salaries.  Of course he thinks teachers, firefighters, and law enforcement are "overpaid".

      I worked for a global corporation and had access to salary information and I can attest that $95,000 a year is not a generous salary for someone to manage a city. Entry level engineers are making that much.  Administrative assistants are making that much.  If you want quality people in government, you at least have to get close to a competitive wage for comparable levels of education and experience.

      “when Democrats don’t vote, Democrats don’t win.” Alan Grayson

      by ahumbleopinion on Wed Jan 18, 2012 at 07:56:18 AM PST

      [ Parent ]

      •  Puuhleeze!!!! (1+ / 0-)
        Recommended by:
        johnny wurster

        Isn't city work the same as public service?  Isn't being a mayor the same as being a public servant?

        Geithner makes 170K a year to be the Treasury Chief for the most important country in the world.  In that context, should any mayor make more than 100K a year?

        Of course not.

        Quality people in government????  That's the excuse the Mexican government uses to justify its bloated salary structure, including their Senators (500 of them in a country of 105M) earning more than US$ 220K a year.   (regrettably, the US resembles Mexico more and more with every passing day, in no small part to our Dem politicians, and I say that as a Dem, but as a Dem that's looking out for the working poor).

        I guarantee you that Pittsburgh will attract the same caliber people if it slashes salaries and benefits by 50%.  After all, people are drawn to city government for the sake of public service, aren't they?

        The truth is, many bureaucrats in major and not so major cities across the USA would be making 30% of their government salary in the private sector.

        Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project.

        by PatriciaVa on Wed Jan 18, 2012 at 08:08:19 AM PST

        [ Parent ]

    •  a mid-sized town government? (0+ / 0-)

      You mean A special assistant in the 6th most populous state in the nation?   That's not like, 'Harrisburg welfare' or something.  It was the PA Dept of Public Welfare, concerned with the welfare of almost 13 million people.

      "Never let your sense of morals get in the way of doing what's right." - Isaac Asimov

      by Aramis Wyler on Thu Jan 19, 2012 at 05:46:34 AM PST

      [ Parent ]

  •  This item is vacuous: (2+ / 0-)
    Recommended by:
    PatriciaVa, Aramis Wyler
    Joseph N. DiStefano, The Philadelphia Inquirer — PhillyDeals: Activists push Philadelphia to recoup losses on interest-rate swaps:

    They didn't have any losses.  They wanted to refinance into a fixed rate mortgage, and got exactly what they wanted.
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