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PRESS RELEASE


Criminal Libor-Rigging Involved in Debt
and Looting Across Massachusetts

July 19, 2012 (EIRNS)—This week, a meeting was scheduled with Massachusetts Attorney General Martha Coakley and officials of the many state agencies—from transportation to water resources, which have been bilked by the years of Libor-rigging, protected by Treasury Secretary Timothy Geithner et al., for the banksters. Although no official statewide survey has yet been released, the unofficial accounts from each agency, and from non-state institutions vital to the Commonwealth's citizenry, show the extent and depth of the looting. The following items are from the Boston Globe and other sources:

  • Massachusetts Department of Transportation: In 2010 alone it had swap contracts to cover some $800 million in borrowing. Agency officials are looking to see by how much it was "underpaid" in the swaps deals.

  • Massachusetts Water Resources Authority is looking into its longstanding $350 mil interest-rate swap deals.

  • Massachusetts Bay Transit Authority (MBTA, also known as the T): This agency had a dozen interest-rate swap agreements valued at a total of $1.6 billion over a five year time period. Last week, Jonathan Davis, acting director of the T, said, "We're ... going to look and see what our legal recourse is" about the losses associated with Libor manipulation.

Boston and its MBTA agency comprised one of the 12 cases of cities reviewed in detail by the study released in June, by the Refund Transit Coalition, titled Riding the Gravy Train; How Wall Street Is Bankrupting Our Public Transit Agencies by Profiteering Off of Toxic Swap Deals. It reports:

"The Massachusetts Bay Transportation Authority operates the nation's fifth-largest regional transit system, serving 175 cities and towns in Massachusetts that cover about 70 percent of the state's population... [The T, according to its Fare and Service Change Information Booklet] has 'the highest debt burden of any U.S. transit agency.' Just about every dollar the T collects in fares goes to pay down the debt. This crushing debt burden has helped contribute to a FY 2013 deficit of $160 million. In order to plug the hole in the budget this year, the T approved an average fare increase of 23%. Riders with disabilities and seniors, however, face draconian and disproportionate hikes of up to 150% and 87.5%, respectively....

"Wall Street banks have swooped in to take advantage of a financially desperate transit agency—and its riders—by roping the T into risky interest rate swap deals. The T is losing about $26 million a year on five toxic swaps still outstanding with Deutsche Bank, JP Morgan Chase and UBS."

Ending just half of this flow to these banks would be enough to reverse the fare hikes.

  • Massachusetts General Hospital is involved in interest rate swaps, and losses. Their parent company is Partners HealthCare, which used more than $500 million in swaps in the past 10 years. Partners, which also owns Brigham and Women's Hospital, is considering what to do.

  • Harvard University and Lesley University hold interest rate swaps, as do many other educational institutions.