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Finally. Statement on Override of Governor Rauner’s Budget Veto

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Chicago, IL – Today, the Illinois House joined the Senate in overriding Governor Rauner’s veto of the state budget giving the state its first budget in years. The following is a statement from Amisha Patel, Executive Director of Grassroots Collaborative.

“Finally, state legislators have pushed aside Rauner’s obstructionism to pass a state budget. Community residents have been fighting for years for a fully funded budget and are clear that this is not enough. The budget provides insufficient funding for critical services and asks Illinois families to foot the bill instead of demanding the wealthy pay their fair share by implementing progressive revenue solutions such as closing the carried interest loophole or a financial transaction tax. But it is a budget and it is progress.

At the same time we recognize this step forward, we deplore the lives and livelihoods lost as a result of it taking so long to get to this point. We mourn for every breast cancer screening that came too late, for the jobs lost across the state, and for every resident denied the help they needed as result of this tragic and unnecessary crisis.

Grassroots Collaborative thanks the tens of thousands of Illinois residents who worked to make their voices heard by writing letters, making phone calls, and visiting legislators. We remain committed to fighting for a People’s Agenda that puts the interests of the people of Illinois over those of deep-pocketed political donors.”

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IL Senate Passes Hedge Fund Tax to Close Loophole

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Illinois Department of Revenue Estimates SB 1719 Would Raise $1.7 Billion for State in First 12 Months

Chicago, IL – On Tuesday, May 23rd, the Illinois Senate voted 34-24-1 in favor of passing SB 1719. The legislation places a privilege tax on Hedge Fund and Private Equity Managers like Bruce Rauner and Ken Griffin who exploit a federal tax loophole to get a lower tax rate than that paid by many working Americans.  

Amisha Patel, Executive Director of Grassroots Collaborative, explained, “This is great news for Illinois residents that have been languishing under an extended budget impasse. Illinois needs new revenue. SB 1719 generates significant revenue – raising it from  those who have profited for years off of a rigged tax system, instead of asking for more sacrifices from our most vulnerable residents.”   

“This is an important step in creating the kind of state we want to live in,” stated Senator Daniel Biss (D-Evanston), lead sponsor of SB 1719. “We have a small group of very wealthy individuals using an archaic loophole to avoid paying their share, at the expense of other taxpayers and vital social services. Illinois now has an opportunity to right this wrong, to move towards greater fairness, and raise $1.7 billion in new annual revenue that our state desperately needs.”

Representative Welch (D-Hillside), lead sponsor of the legislation in the Illinois House added, “I believe that to those whom much is given much is required- and so far Illinois Hedge Funds have given very little and taken an awful lot. At a time when our seniors are being asked to go without, our public universities are at risk, and shelters are being shut down we can not afford to wait. I’m looking forward to working with my colleagues in the House to quickly pass this legislation and get it on the Governor’s desk.”

“The people that make the most of this loophole will not change their line of work if it is eliminated. They make plenty of money with or without it, and the tax advantage that they receive due to this rule is not the reason they are in it. They are in the business because they make a ton of money doing it. And that is OK. But the absurd advantage they receive due to this rule is just that; absurd! So simply change the law so that it treats them the same way that John Q Public is treated…or myself, I might add, who paid in last year at a 38% rate (happily so) on a pretty good number,” concluded Stephen Prince with the Patriotic Millionaires, CEO of Sterling Card Solutions.

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Rauner Donors Get Visit From Upset Residents on Tax Evasion Trolley Tour

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Community Groups Demand Hedge Fund Managers Profiting From Carried Interest Loophole Pay Fair Share to Help Solve State Budget Crisis

 

Chicago, IL – On Thursday, community residents being impacted by the school funding crisis and state budget impasse took part in a Tax Evasion Trolley Tour to the homes of Hedge Fund political donors who have profited off of the carried interest loophole at the expense of schools and vital social services.   

The first stop on the trolley tour was the $20 million dollar home of Donald Wilson, founder of DRW Trading Group. Wilson has personally benefited from the carried interest loophole and made significant political contributions to both Governor Rauner and Chicago Mayor Emanuel. Participants were joined by Representative Welch (D-Hillside), lead sponsor of HB 3393, a bill that would generate close to a half billion dollars by placing a privilege tax on people like Wilson.

Joining with community members, Representative Welch hand-delivered a large overdue tax bill to Wilson’s front door.

“It’s okay to own a nice home, everyone dreams of being successful and living a good life. But to those who much is given, much is required. What we are saying is if you have the privilege to live in a $20 million dollar house you should pay your fair share in taxes and that means closing the carried interest loophole,” stated Representative Welch to the energetic crowd.   

Alejandro Sanchez, Safe Passage program coordinator with the Brighton Park Neighborhood Council added, “In our community, shootings have increased by 300% between 2013 and 2016. I have a question for Don Wilson and others like him who are profiting off of this loophole. Do you think that skimping on your tax bill is worth students in Brighton Park losing their after-school programs and guidance counselors, or domestic violence centers being closed, or more young people dead because of massive disinvestment in anti-violence programs?”

Participants left sidewalk messages outside Wilson’s home, citing the devastation caused by the state’s lack of sufficient revenue. In addition to visiting Donald Wilson, the Tax Evasion Trolley Tour went to the homes of Sam Zell, Ken Griffin, and Dmitry Balyasny, all deep-pocketed political donors who have capitalized on a rigged tax system resulting in the current school and state funding crisis.

“The impacts on our communities are real – increasing violence, students forced to stop their college educations, seniors going without home care and needed programs like meals on meals, immigrant families losing programs that assist them, and the prospect of our schools being closed 3 weeks early, due to lack of revenue. We organized this tour because these impacts feel real to us, but standing here in front of multi-million dollar mansions, it’s hard to imagine they feel real to these Hedge Fund managers. We want them to know that the money they are getting from the carried interest loophole isn’t being pulled from thin air – it is coming from our community programs and schools,” explained Abbie Illenberger, Field Director of Grassroots Collaborative.

Grassroots Collaborative expects HB 3393 to be voted on in the Illinois House next week.

Photos from the Tax Evasion Trolley Tour can be found here: https://www.dropbox.com/sh/ac8iwhjl3y50a2f/AABXPqa9Nd1lNJyrmysLIzMha?dl=0

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Village of Robbins Calls on Governor Rauner to Put People Before Wall Street Banks

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Robbins Unanimously Passes Resolution against Predatory Bank Deals Draining State and Local Budgets, asks for Attorney General to Take Action

Robbins, IL – On the eve of Governor Rauner’s budget address the Village of Robbins Board of Trustees passed a resolution targeting Wall Street banks that have drained hundred of millions of dollars from taxpayers through toxic interest rate swaps.

The resolution calls on Governor Rauner to negotiate a termination of the state’s remaining interest rate swaps with no further cost to Illinois taxpayers; resolves that the Mayor and the Board of Trustees of Robbins enforce a moratorium on entering into interest swap deals; and calls on Attorney General Lisa Madigan to investigate the state’s predatory swap deals and sue to recover the money that banks have taken from the state.

“I’m am thrilled that my community is standing up to Wall Street and articulating clearly that we want public resources to be going to helping people not padding Wall Street bank profits,” said Barbara Pillow Sidibeh, a resident of Robbins following the vote. “Black and Brown communities across the state are facing massive targeted disinvestment as a result of these toxic deals with Wall Street banks.”

“Even while they consider halting payment to state workers, gutting public education, and cutting services, Rauner and the political establishment have been unwilling to stand up to Wall Street banks. Tonight the Village of Robbins showed how it can be done. Now we need Governor Rauner and Attorney General Lisa Madigan to do the right thing and put the interests of Illinois families before Wall Street bankers,” stated Amisha Patel, Executive Director of Grassroots Collaborative.

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As Violence Soars, Governor Continues to Pursue Personal Political Agenda Over Needs of Residents

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Grassroots Collaborative Statement on Governor Rauner’s 2017 State of the State Address

Chicago, IL – On Wednesday, Governor Rauner delivered his third state of the state address without having successfully passed a budget. The following is a statement from Amisha Patel, Executive Director of Grassroots Collaborative.

“Today, Governor Rauner attempted to borrow from the Trump playbook and layout alternative facts about the state of Illinois under his leadership, but the reality is that his time at the helm has been an unmitigated disaster for Illinois families. Precious lives have been lost as a result of the elimination of state anti-violence funding and erosion of the social safety net. In addition to pushing disinvestment, Governor Rauner has contributed to an escalating climate of scapegoating of Muslim and immigrant communities in Illinois by eliminating all state funding for immigrant services and attempting to ban Syrian refugees.

The diverse set of communities that Grassroots Collaborative represents understand that our state needs a new way forward. We need a People’s Agenda, one that closes capital gains loopholes and fully funds education with that revenue. We need universal childcare so that children have a safe learning environment while their parents go to work. We need criminal justice reform that takes money out of incarceration and reinvests in the communities most affected by policing. These ideas and more are the way to move the state forward.”

Grassroots Collaborative Statement on Mayor Emanuel’s FY17 Budget Address

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Chicago, IL – On Tuesday, community leaders and residents listened as Mayor Emanuel delivered his FY17 budget address. Although Emanuel agreed to release some of the city’s surplus TIF funds under mounting pressure from parents, teachers, community organizations, groups expressed disappointment that Emanuel again failed to ask Chicago’s most wealthy individuals and corporations to contribute the resources necessary to the long term success of all of Chicago’s neighborhoods. The following is a statement from Grassroots Collaborative, a coalition of labor and community organizations based in Chicago.

“Mayor Emanuel continues his streak of asking working families to pay more while the most wealthy continue to not pay their fair share. This is not sustainable. Plastic bags are not going to generate the resources needed to address the economic and racial inequality driving so much of the violence in our communities,” stated Amisha Patel, Executive Director of Grassroots Collaborative. “It is our hope that we can build on the release of additional TIF funds and win more substantial progressive revenue in the near future.”

Patrick Brosnan, Executive Director of Brighton Park Neighborhood Council added, “The declared TIF surplus is a victory for Chicago’s families but we have to pass the Chicago Public Education Revitalization (CPER) Ordinance to institutionalize the surplus process. We started this campaign in July, knowing that it would be a long and hard battle.  While we acknowledge that some of the surplus is being redirected to schools, it’s only the start of our fight to win education equity in Chicago.”

Gov. Rauner’s announced agreement on swap payouts to Wall Street banks lack details

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News Source:

 

October 4, 2016

Contacts:

nathan@grassrootscollaborative.org

Gov. Rauner’s announced agreement on swap payouts to Wall Street banks lack details

Coalition of educators and human service providers skeptical, demand disclosure of agreement terms

SPRINGFIELD, IL – This morning, Gov. Rauner reacted to Illinois educators and human service providers who had gathered for a press conference to call on the governor to prevent a near $1 billion payout connected to toxic interest rate swap deals with big banks.

A last minute press release by the governor’s office said the state had reached new agreements on the swap deals that would “reduce the state’s financial risk.”  However, the release raises many questions.  It claims that “the new terms are more favorable to the state” but provides no details about the new terms or if the agreements save the state money.

“We want to see the terms of these new deals. Taxpayers deserve to know what the Governor has negotiated and if it benefits them or big Wall Street banks like JP Morgan Chase,” said Amisha Patel, Executive Director of the Grassroots Collaborative. “There is too much at stake for us to just take the governor at his word. Illinois taxpayers have already had more than $670 million taken away from our schools and universities and critical services like childcare, senior services, and violence prevention programs, in order to pay for Wall Street banks’ profits,” she said.

Organizers said any action that Governor Rauner has taken around the interest rate swaps and letters of credit is a result of the pressure they had put on him to stop paying Wall Street banks while universities and social services starve for funding.

When asked about the news from the Governor’s office, Saqib Bhatti, author of “Turned Around: How the Swaps that were Supposed to Save Illinois Millions Became Toxic,” commented, “The devil is in the details.  Mayor Rahm Emanuel made a similar announcement when he renegotiated toxic swap deals.  A few months later, Chicago taxpayers had to pay $400 million in termination payments. We won’t know the potential impact of Rauner’s agreements until we see the actual terms.”

Notably, the statement from the governor’s office does not offer any detail about the status of five Letters of Credit that are attached to the swaps that were renegotiated.  These Letters of Credit will expire on Nov. 27th, 2016, triggering a massive payout of nearly $1 billion that would have to be diverted from already hurting education and human service programs.   The Governor’s statement merely says the priority is to “renew or replace” the letters of credit.

John Miller, President of the University Professionals of Illinois Local 4100 said about today’s announcement, “We need to see these agreements.  And we need an announcement from the Governor that he is currently negotiating with the five banks in question.  Our state cannot afford a $1 billion payout to big Wall Street banks while our college students are leaving the state, because they don’t know if their university will be open two months from now.”

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Legislators and Community Leaders Meet With SEC

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CHICAGO, IL – On Friday, State Representative Andrade, Chicago Alderman Ramirez-Rosa, and community leaders met with Federal Securities and Exchange Commission Regional Director David A.Glockner, and asked that the SEC investigate predatory interest rate swap deals that have caused taxpayers to pay out billions of dollars to Wall Street banks.  

“Right now we have Chicago students who are not getting the investment they deserve as a direct result of these interest rate swap deals,” stated Alderman Rosa. “Chicago and CPS together lost $1.4 billion after being sold these potentially fraudulent Wall Street gimmicks. I sincerely hope that the SEC will listen to us and do what Mayor Emanuel refused to do by taking the necessary legal action to protect our students and our city’s taxpayers.”

For years, Wall Street banks pitched cities and local governments on complicated financial deals called interest rate swaps promising big savings over simple loans. When their promises proved false, cities, states and school districts cut public services and vital programs in order to pay back Wall Street banks.  These toxic swap deals contributed to budget shortfalls that led to schools closing in Chicago, water shutoffs in Baltimore, and devastating environmental and health issues in Los Angeles.  These same bad deals also helped lead to the bankruptcy of Jefferson County, Alabama and Detroit, Michigan.

“Predatory swap deals have a devastating cost in our communities.  Every dollar that cities and states are forced to send to Wall Street banks is money not going towards essential community services. We must intervene to make sure that people are protected over the ill-gotten gains of large financial institutions,” said Amisha Patel, Executive Director of Grassroots Collaborative, following the meeting.   

Action by the SEC could provide much needed relief to the city of Chicago, Chicago Public Schools, and the State of Illinois. Interest rate swap deals have already cost the state $684 million and could cost taxpayers an additional $870 million if Governor Rauner does not renew letters of credit on these deals before November this year.

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Over 88,000 Petitioners Demand SEC Action on Toxic Swap Deals

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On Thursday, Grassroots Collaborative joined with organizations across the country including Americans for Financial Reform, CREDO Action, Rootstrikers and the Center for Popular Democracy to deliver a petition in which more than 80,000 Americans asked the Securities and Exchange Commission (SEC) to investigate the toxic swap deals squeezing cities and states across the country.

The 80,000 petitions were delivered to the SEC’s Chicago Regional Office. At the delivery, State Representatives Chris Welch and Robert Martwick were joined by Alderman Carlos Rosa. Also present were over a dozen community leaders, teachers, and social service providers.

These toxic swap deals contributed to budget shortfalls that led to schools closing in Chicago, water shutoffs in Baltimore, and devastating environmental and health issues in Los Angeles.  These same bad deals also helped lead to the bankruptcy of Jefferson County, Alabama and Detroit, Michigan.  The state of Illinois has already lost over $684 million to Wall Street banks on these deals and could be on the hook for an additional $870 million on November 27th if action is not taken.

In many cases, it appears that banks misrepresented the risk of these deals to cities, or omitted key information, in violation of fair dealing rules. The SEC has the power to order Wall Street to give back any ill-gotten gains if it finds evidence of wrongdoing. On Thursday, taxpayers and elected officials will ask them to do just that.

“These toxic swap deals have cost taxpayers across the country billions of dollars,” said Saqib Bhatti, Director of the ReFund America Project. “Because elected officials like Chicago Mayor Rahm Emanuel have refused to lift a finger to recoup losses, the SEC must act as the last line of defense to protect taxpayers’ interests so that we can fully fund services in our communities.”

“Predatory Wall Street deals are costing Chicago and other American cities billions of dollars,” said CREDO Political Director Murshed Zaheed. “It is long past time for the Securities and Exchange Commission to stop sitting on the sidelines and start protecting our communities from big banks.”

“In many places around the country, big banks appear to have violated their legal obligations of ‘fair dealing’ by overstating the benefits and understating the risks of deals that are now leaching billions of dollars from taxpayers and communities,” said Lisa Donner, Executive Director of Americans for Financial Reform. “The SEC should use their authority to investigate these deals, and to order disgorgement of ill-gotten gains if it finds evidence of wrongdoing.”

“The toxic swaps Wall Street peddled to our cities and towns are part of a parasitic business model that drains wealth from the real economy rather than creating value,” said Kurt Walters, campaign director of the Rootstrikers project at Demand Progress. “The SEC must launch an immediate investigation into how these toxic deals were pushed on our cities and towns – and force bankers responsible for fraudulent sales to return all ill-gotten profits back to the public.”

Erica Rangel, with Enlace Chicago, which operates one of two remaining CeaseFire sites operating in the state of Illinois told the crowd, “Right now the state of Illinois is cutting life-saving programs like CeaseFire, LIHEAP, and Senior HomeCare. The money being used to pay out on these toxic swaps isn’t being pulled out of thin air – it is coming from our communities and our programs. We need the SEC to understand the deadly consequences of these swap deals, this last weekend in Chicago we had 64 shootings. How many shootings could funding of vital anti-violence and social services prevented?”

“Across the country, people are calling on the SEC to investigate a small clique of banks that have drained massive public resources through complicated and likely illegal interest rate swap deals,” Illinois State Senator Daniel (D-17) told Grassroots Collaborative prior to the delivery. “Governor Rauner should not voluntarily pay out on these deals and seek to renew letters of credit with the state to ensure that the SEC has enough time to launch a thorough investigation of these deals. Our money should be going to schools and services not Wall Street banks.”

Photos available here

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Experts Sound Alarm: Wall Street Banks Set to Shakedown Illinois for $870 Million Unless Springfield Acts Fast

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Mayor Emanuel Paid Out Hundreds of Millions to Wall Street Banks on Swap Deals that Torpedoed Chicago and CPS budgets, Governor Rauner Urged to Not Repeat Mistake with State Swaps

CHICAGO, IL – On Monday, the Illinois House Revenue and Finance Committee held a second subject matter hearing on interest rate swap deals that have cost the state of Illinois over $684 million thus far. During the hearing experts testified how these deals could trigger further financial crisis for the state if letters of credit are not renewed in November. Without these letters of credit, renegotiation, or legal action by the State of Illinois, taxpayers would be on the hook for $870 million in entirely avoidable payments to Wall Street banks.

Kurt Summers, Chicago City Treasurer, stated,  “On May 27th, I sent Governor Rauner a letter encouraging him to join the ongoing class action lawsuits as a chance for the State to recoup tens of millions of dollars in potential damages. This is real money that will benefit the State in a time of unprecedented fiscal challenges but there is more to it than that. This is a statement to financial institutions that the citizens of Illinois, Chicago and any municipality in the union demand to be treated fairly and openly.”

Experts speaking during the hearing made clear that Illinois has alternatives to paying out to the banks including litigation and regulatory action. When faced with a similar situation involving toxic swaps, San Francisco successfully leveraged a public campaign to save money and win substantially better terms from JPMorgan Chase.

Jono Shaffer, a leader with the Service Employees International Union who helped run the campaign in San Francisco explained, “We worked with the Mayor and Controller’s offices in San Francisco to force Chase to the table and avert the crisis. As a result the bank agreed to terminate the swap without charging us $18.5 million in penalties, return $13 million of collateral, refinance us into an affordable fixed-rate loan and to reduce to the outstanding principal on the loan by $21 million.”

The social service infrastructure in Illinois is already in crisis as a result of the ongoing budget impasse. Testimony during the hearing warned of the human toll on Illinois residents if the state paid out in full on the swap deals.

“The $870 million payoff to the banks we are talking about today is sufficient to pay off, in full, all human services providers who are under contract with the state and have not been paid for services rendered over the past 11 and ½ months, since the start of fiscal year 2016 on July 1, 2015. This includes service providers in the areas of infant mortality, homeless youth, mental health, addiction prevention and treatment, respite care, supportive housing, and centers for independent living,”, stated Dan Lesser, Director for Economic Justice at the Sargent Shriver National Center on Poverty Law, to the committee.

Erica Rangel, Lead Community Organizer with Enlace Chicago which runs one of the few Ceasefire programs still operating in the state commented, “These banks have contracts with the state – just like our programs have contracts with the state.  The only difference is, the contracts with the banks are being honored.  Ours are not.  When our government prioritizes big banks who have cheated our state through bad deals over life saving programs – then we have lost our way.”

“Although Springfield has been unable to pass a budget it is our hope that our elected officials can work together to prevent money that should be going to educate our young people and protect our most vulnerable residents from being eaten up by Wall Street bankers,” stated Amisha Patel, Executive Director of Grassroots Collaborative, following the hearing. “Otherwise, the Governor and legislative leaders can take any remaining claim they have to fiscal responsibility and throw it right out the window.”

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