An Illinois House committee will hold a second subject matter hearing Monday morning in Chicago on the issue of interest rate swaps.
City of Chicago Treasurer Kurt Summers is among those expected to testify before the House Revenue and Finance Committee.
Last month, Summers urged three Chicago employee pension funds to consider joining class action lawsuits against banks in an effort to recoup losses from swap deals.
“We are asking the question of whether this financial market was ever fair. If we are successful, then all Illinois residents and taxpayers will benefit. We will send a message that this sort of bad behavior will no longer be tolerated by the people of Illinois. We will only accept a fair and level playing field for the investment of public money,” Summers said in a news release distributed by the Grassroots Collaborative. “I call on Governor Rauner to fulfill his fiduciary obligation to protect our finances at their most vulnerable moment by joining the antitrust lawsuit.”
Monday marks the second subject matter hearing the House Revenue and Finance Committee has held on the interest rate swap deals Illinois has struck with big banks. Progress Illinois previously covered the first hearing on the issue, which was held in late April.
According to the Grassroots Collaborative, which has been working to shed light on interest rate swaps, the controversial financial deals “have already cost the state of Illinois $684 million” and “could cost taxpayers an additional $870 million in November if the state does not sue or renegotiate these deals as others across the country have done.”
Read Progress Illinois’ past reporting on how interest rate swaps work and their financial impact on the state, city of Chicago and Chicago Public Schools system.
UPDATE (5:20 p.m.): At today’s hearing, Summers joined advocates in pressing the state to take legal action to recover losses from interest rate swaps.
“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,” Summers told the committee, according to the Grassroots Collaborative. “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.”
Representatives from the Sargent Shriver National Center on Poverty Law, Enlace Chicago, SEIU* and others also testified at the hearing.
“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,” Grassroots Collaborative Executive Director Amisha Patel said after 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.”
*The SEIU Illinois Council sponsors this website.