Anti-violence groups condemn state’s ‘toxic’ swap agreements
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Community organizers on Friday criticized Gov. Bruce Rauner for what they see as prioritizing Wall Street banks over anti-violence efforts.
Standing in front of the Chase Bank at 3101 W. Cermak Rd. in Little Village, a few dozen Chicago residents urged Rauner to renew six letters of credit that would prevent the state from paying an additional $870 million in “toxic” interest rate swaps to Wall Street banks this November. Instead, they would like to see that money fund and expand anti-violence programs like After School Matters, Ceasefire, Teen Reach and summer jobs.
“Our communities are losing resources because money that should be going to successful anti-violence programs is instead being shipped off to Wall Street banks,” said Amisha Patel, executive director of the Grassroots Collaborative, which helped organize the protest.
Patel said the state’s budget impasse and a lack of resources for social services have caused an increase in violence throughout Chicago. She urged Rauner to end these interest-rate-swap agreements to invest in programs that could address the uptick in violence.
“I hope the governor will … do the right thing next week and renew these letters of credit so that money can stay in our neighborhoods and communities and not go into the hands of Wall Street banks,” she said.
The interest-rate-swap deals date to 2003, when the Illinois General Assembly passed a bill, sponsored by Sen. John Cullerton and Rep. Gary Hannig, that allowed certain governmental unities to engage in swap agreements. That same year, then-Gov. Rod Blagojevich’s administration entered into five such agreements totaling $600 million.
Tim Nuding, director of the Governor’s Office of Management and Budget, issued a statement saying Rauner’s administration is “taking all reasonable actions to limit our risk and exposure on these deals.”
According to Rauner Spokeswoman Catherine Kelly, the swap deals have damaged the state’s fiscal health for years and limited its ability to fund education and social services.
“The [Rauner] administration began work months ago to address the expiring letters of credit,” Kelly said in an emailed statement. “We expect to have this resolved prior to November.”
Still, Brenda McMillon, a resident of the Auburn Gresham neighborhood, said she worries Rauner will “put the interest of big banks in front of our children and communities.” She demanded that the state allocate more funds to anti-violence organizations and after-school programs.
McMillon, whose grandson was shot and killed in 2013 after an altercation at a local party, said these programs help keep children from turning to violence.
“In my heart, I believe had those children had something to do in the community, maybe my grandson would still be here,” she said.