Friday, June 29, 2012

Our Time Has Come: Let's End The Swap with Goldman Sachs NOW

What: A very IMPORTANT council meeting will take place that will signal the beginning of the erosion of greedy capitalist forces in Oakland.  Council will decide how to proceed with ending the toxic interest-rate swap with Goldman Sachs that has drained Oakland of $32 million dollars.  This drain will continue until 2021 unless we put a stop to it NOW.

Where: Oakland City Hall

When: Tuesday, July 3, 2012, 5:30 pm

Why: We need to light a fire under council and let Goldman Sachs know that we are not going to let them continue to rob us!

  1. Bring bold signs.  
  2. Ask one other person to come with you.  
  3. Fill out a speaker card. Cede your time to a coalition speaker if you don't want to speak.
  4. Even if you cannot be there:  contact the following council members from now until Tuesday afternoon to let them know that they need to stand up for Oakland and stop doing business with Goldman Sachs, if Goldman Sachs doesn't end the swap penalty-free:

Phone: 510-250-7222
Twitter: stpgoldmansachs

Thursday, June 28, 2012

Things Are Starting To Move

United Together to Stop Goldman Sachs!  Oakland City Hall, 6/26/12
The Oakland Coalition to Stop Goldman Sachs made a strong showing at the Finance Committee meeting, filling a majority of the seats in the hearing room at City Hall.  Two other groups pushing anti-swap campaigns in the East Bay came to support us: The Stop the Swap Coalition from Peralta/Laney College, and Riders for Transit Justice. Our coalitions were well prepared at the podium.

Brunner introduced the Coalition’s motion that called for:
  1. A negotiation with Goldman Sachs to terminate the swap deal without the termination fees currently estimated at $15.5 million
  2. A report back in 60 days on the progress of negotiations, and 
  3. A refusal to do business if Goldman is unwilling to negotiate
The committee took a vote, which resulted in 3 ayes (De La Fuente, Brunner, and Brooks) and 1 abstention  (Kernighan).  The motion will go to the full City Council Tuesday, July 3, 2012.

We learned a few things in the finance committee meeting.

  • Goldman Sachs just tossed Oakland a bone by putting in the lowest bid on an RFP for an $83 million tax note, which the city staff accepted last week. Goldman Sachs used this low-ball bid to try to get council members to vote down our recommendation to stop doing business with Goldman Sachs if they don't let Oakland out of the swap penalty-free.
  • Councilmembers are either underprepared or are purposely being kept in the dark.  Desley Brooks stated that she was not aware that The City of Oakland entered into another business relationship (low bid on the RFP) with Goldman Sachs.  She also surmised that no one else on council was aware of this.  Is the tail wagging the dog?
  • City Staff continues to front for Goldman Sachs. They tried to say that it may be illegal to exclude Goldman Sachs from getting Oakland's business, but when pressed by Desley Brooks, who was pretty annoyed with them, they admitted that they had no idea.  Staff pledged to confer with the city attorney in order to find out.

Who says we aren't making Goldman Sachs nervous?  We also seem to be lighting a fire under the council.

Continue to Rip Off Oakland, We Will Stop Doing Business With You

By Beth Kean and Felipe Cuevas
from California Progress Report

Members of Oakland community groups, religious leaders, and city workers packed the Finance Committee meeting Tuesday to demand Goldman Sachs cancel the harmful “interest rate swap” deal without a $15 million payout to the bank. Our City Council leaders joined us in standing up to Goldman Sachs and voted to negotiate with the bank to terminate the toxic deal without the $15 million payout to the bank— and added that if the bank refuses, to stop doing business with Goldman Sachs.  Why would we ever do business again with someone who ripped us off?
Councilmember Jane Brunner introduced the motion that called for (1) City staff to negotiate with Goldman Sachs to terminate the swap deal without the termination fees currently estimated at $15.5 million, (2) To report back in 60 days on the progress of negotiations, and (3) If Goldman is unwilling to negotiate, to stop doing business with Goldman Sachs. City Finance Committee Chair Ignacio de la Fuente supported the Brunner motion saying, “The difference here is that we bailed out this bank. We need to use the economic power we have to send a message.” Councilmember Desley Brooks also supported the motion and asked all her colleagues to do the same. The motion will go to the full City Council next week on Tuesday, July 3, 2012.

Friday, June 22, 2012

Goldman Sachs and Friends Throw Oakland Under The Bus

According to a new report entitled "Riding the Gravy Train" released by the Refund Transit Coalition, several banks have been participating in interest-rate swaps in struggling cities like Oakland.  These institutions have been gutting public transit agencies, negatively affecting working class commuters - particularly working class people of color.  As a result of these transit-related toxic swaps, commuters are being overcharged, inconvenienced by reductions in services, and left with few transit options.  It should come as no surprise that Goldman Sachs has extended another tentacle into our pockets:

The Metropolitan Transportation Commission (MTC) is responsible for long-range planning and many funding decisions for public transit in the nine-county Bay Area region. It oversees local operators like MUNI in San Francisco and Alameda County Transit (AC Transit) in Oakland and the East Bay. The MTC is losing $48.1 million a year on its swap deals with Ambac, Bank of America, JPMorgan Chase, Goldman Sachs, Citigroup, Bank of New York Mellon, Morgan Stanley, and Ambac. (93) It is stuck in most of these deals until 2036 or later. By the MTC’s own estimates, these deals will cost more an additional $1.3 billion over the remaining life of these swaps.(94) 

It is clear. The City of Oakland needs to DROP THE SWAP and sever all financial relations with Goldman Sachs.

Saturday, June 2, 2012

"Goldman Sachs Knows That Oakland Is In The House"

-by Kurt Kuhwald
May 25, 2012

Three of us from Oakland arrived at the Oakland airport to make the trek to NYC/NJ: Gary Jimenez, SEIU officer, Filipe Cuevas, SEIU member and City worker, Rev. Kurt A. Kuhwald, ROOTS member and Interfaith minister. Our plane was delayed about two hours and so instead of leaving @ 9:35pm, we took off somewhere around 11:45 pm. Bad News.

What that meant was that we arrived in NYC @ 8:00 am, and by the time we got out to the curb, it was near 8:30.

We decided on taking a cab, instead of getting a rental car and were lucky to get a Brooklyn-born African American man (who will soon be setting up his own livery service), Christopher Lucien, who was the epitome of the NYC energetic, fast-talking, shrewd thinking, personable guy. He got us to the Goldman Towers in Jersey City @ 9:35! Amazing driver, who used every paved surface except the sidewalks, and drove us through Brooklyn to loop into the business district of Manhattan and then through the Holland tunnel to drop us at GS in Jersey City.

Getting there that late, however, meant that we had to go to the overflow room, and not the actual shareholders meeting room where the CEO, Blankfein, was holding forth. If you've ever been to a shareholders meeting for a large corporation, you know that that is exactly what happens: the CEO runs the show with a certain austerity and individualism that marks coporate leadership structure and culture.

When we arrived at Goldman Towers there were police and GS suits everywhere and when we went though the metal detection check point, they went through our stuff with, as they say, a fine tooth comb. I felt we were clearly being seen as agitators, despite the fact that we had all the papers required to be legitimate proxies. The whole scene was marked by excessive politeness and a clear sense of power and control.

We were given our dark green shareholders ID tags and then sent to the Overflow room. Along the way there were suits everywhere guiding and directing us. When we got to the room, it was about a 1/3 full. There were several GS people with headsets and phones in the room; there was a large LED screen and we could see the CEO and presumably executive officers on the screen: the three officers to Blankfein's left, and he standing at a plexiglass podium. The Board members were seated in the front row facing the CEO with their backs to the shareholders and the camera.

On every seat there was a printed sheet with the guidelines for how to behave in the meeting called the "Rules of Conduct: Goldman Sachs 2012 Annual Meeting of Shareholders." There were 8 of them and the last one read as follows: "The views and comments of shareholders are welcome. However, conducting the formal business of the meeting for the benefit of all shareholders will be the paramount purpose of the meeting. The Chairman [CEO] may rule as out of order discussions that are irrelevant to the business of Goldman Sachs. Substantially repetitious, in furtherance of the speaker's business, personal or political interests or otherwise inappropriate for discussion at the meeting. [And then in bold type] Any person that disrupts the regular operation of the meeting or threatens the security of the premises will be asked to stop and, if necessary will be requires to leave." The whole sheet seemed to me to be a mix of rules to conduct an efficient meeting, and a clear declaration that anything deviating outside the culture of politeness and deference would be quickly dealt with.

The atmosphere was fairly intimidating, frankly, and this was heightened by the fact that all of the speakers who we saw on the screen were exceptionally polite and deferential to the Chair, even those questioners who raised pointed and critical questions about the practices of the company.

During the meeting I was texting with Josh Kellerman of ALIGN NYC (a labor/community/nonprofit coalition group working on community economic issues) who was inside the actual shareholders meeting. He said they had already raised their questions (that had to do, I think, with a scandal in Walmart and one of the GS Board members seeking to be on a review of the issue--seemingly a conflict of interest) and encouraged us to try to speak in our room, or to switch with one of them.

I was told by a very polite young man liaising for GS in the overflow room, who appeared after I asked one of their personnel what we had to do to ask a question, that we could not enter the main room, the doors having been closed at 9:30. But he did say he would try to get the Chairman's attention with a message so that he would know there was a question in the overflow room. Finally, I decided to text my question to Josh and he said he would try to offer it.

He finally presented our question, and put it into his own words that were fitting, but due to his lack of familiarity about our issues here, may have not emphasized points that could have been made, though he made a good try at it. What I sent Josh to offer was framed as a question because the whole comment period was really a Q & A, and everyone was presenting questions, not comments--though some were stating their concerns before they got to their question. The gist of our question, riffed by Josh, was: "Are you aware [addressing the CEO] that the Bond Swap deal that GS has with the city of Oakland is seen as immoral and abusive? Why? Because it is forcing the City to continue to pay on that swap deal that was paid off 7 years ago. (That's like forcing a person to buy insurance on a car they sold 7 years ago.) We want you to fix this deal by: (a) Releasing Oakland from the deal. (b) Not penalizing the City for that release. (c) Returning the 30 million that was paid, in excess.

Josh's riff didn't cover all the points and that may have caused some lack of clarity that the CEO seemed to either play on, or simply didn't fully grasp. Essentially the CEO said that the company could NOT renegotiate such deals. (The problem was that he saw the question as asking to renegotiate the interest rate on the loan and may not have realized that one main point we were making was that the bond was paid off. ---- I think he probably knew what was really being raised, but chose to frame it that way so that it looked more reasonable for the company in that moment of corporate theater.)

After Josh's question, Blankfein took a few more and then declared the meeting closed.

When we walked out of the overflow room there were 7 or 8 cops there, who had not been there before and I think they arrived after I raised our desire to speak. They clearly had us pegged as "outsiders."

We met with Josh Kellerman and Maritza Silva-Ferell of ALIGN in the lobby, and after giving up our shareholders badges (which I did with reluctance because I wanted it as a souvenir!) we met under an overhang by the train station--due to the driving rain. That rain was so intense, in fact, punctuated by thunder and lightning, that the outside press conference/rally was called off and folks dispersed. We debriefed, together, the GS meeting. 

The main points we noted were:

(1) The CEO made it clear that when it comes to deciding what choices, what practices, what policies to make, GS will act only in the interest of their shareholders. That is, if the City of Oakland is suffering as a result of deal with GS, if there is a moral issue, they will determine their course of action based on what profits the shareholders, what meets their fiduciary responsibility to their shareholders, period. (Josh noted that if cities choose to default on such deals, it will hurt the shareholders within this strict definition; a larger question is, what does fiduciary include? Does it include ethical/emotional/community/cultural health as well as financial gain?)

(2) The massive control they brought to the running of the meeting means that future actions need to be very well choreographed and planned. We Oaklanders were very tired, not thinking clearly, a bit intimidated by the show of force, rookies in the structure of the meeting at GS, and due to being late, not in the room where the real action was taking place.

(3) GS is clearly under assault on many fronts, and though they attempted to create a show of massive power and skillful control--they are vulnerable. We, after all, penetrated their institution; we were present to raise issues (and though we didn't have the experience to know how best to do that, we learned a lot about what to do in the future, should we choose to accept such a future assignment).

(4) We have coalition partners on the East Coast; an alliance has been formed now between east and west coasts working against the egregious practices of GS.

(5) GS knows that Oakland was in the house.

Blessings to all,