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City’s crisis not financial — just a matter of priorities, protesters say

The solution to the city’s ever-worsening financial woes?

Sue the banks, say a group of community activists that includes Ald. Scott Waguespack (32nd), one of Mayor Rahm Emanuel’s most vocal critics.

“We’re tired of being told that we have a budget crisis,” said Amisha Patel, executive director of Grassroots Collaborative, standing in the city’s financial district Tuesday morning. “We have instead a priorities crisis.”

The group was responding to news last week that a Wall Street bond-rating agency significantly downgraded the credit of the city’s school system — triggering penalties that could total more than $200 million. Chicago Public Schools is required to maintain a certain credit rating under the terms of debt “swap” deals with financial institutions; not doing so could activate termination clauses in the deals, and CPS could have to make payments to the financial institutions.

But the activists said the deals with banks “violated federal law by misrepresenting risks” to the city. The activists said the city should sue to avoid the penalties.

Waguespack said Emanuel should “exercise all our legal options available to make sure that we reverse the trend of what’s happening with these toxic swaps.”