Just days before a heated primary election, Colorado Senator Michael Bennet finds himself on the defensive. An article in the New York Times reports incumbent Bennet recommended a bad financial deal to Denver Public Schools back when he was superintendent of the urban school district.
The timing couldn't be worse. The piece comes just five days before Colorado's primary on Tuesday, August 10 in which Bennet is no shoe-in for the Democratic ticket. His opponent, Andrew Romanoff, former Colorado Senate Majority Leader, through a slew of negative ads, grassroots support and headline grabbing moves, one of which included the selling of his house to loan his campaign some cash, has pulled himself into a statistical tie with Bennet, according to the latest poll.
According to the article in today's New York Times, in 2008, Superintendent Bennet was one of two people to recommend to the cash strapped Denver Board of Education that the school system should take the risky financial move of attempting to "...raise $750 million in an exotic transaction," lead by JPMorgan Chase according to the Times, in which, "...the debt carried a lower rate but it could also fluctuate if economic conditions changed."
The article states, "The Denver schools essentially made the same choice some homeowners make: opting for a variable-rate mortgage that offered lower monthly payments, with the risk that they could rise, instead of a conventional, fixed-rate mortgage that offered larger, but unchanging, monthly payments." Not long after the deal closed, the nation's economy was in a free-fall, pushed over the edge by big Wall Street banks and financiers who dealt bad deals.
Two years later, DPS, like many homeowners, is now drowning in interest and fees and in the process of trying to "renegotiate the deal", according to the Times.
Al Lewis, Dow Jones columnist, pointed out to Fox News, "He's not accused of anything improper in this article, he's just accused of being a sap. I think he had the best interest of the school district at heart when he did this, and it's only in retrospect that we can look back and go 'wow that was a bad deal!'"
Fox News spoke with Bennet's press person, Trevor Kincaid. When asked if Bennet was going to issue a statement or hold a presser about the Times article, Kincaid said, "First of all the New York Times article is b******t." Kincaid went on to say the NYT reporter (Gretchen Morgenson) had obviously never attended a Denver Public Schools board meeting. As of this writing, the Bennet campaign has not issued an official response on the information contained in the article.
Bennet's opponent, Andrew Romanoff, says he is not going to celebrate his opponent's bad fortune because, "it looks like we (Denver taxpayers) could be on the hook, because to me, our kids' future matters more than a political campaign." But Romanoff did not let Bennet off the hook, also stating, "My opponent's running in part on his platform, his experience as a financial expert. And he's made much of the fact in his view that I don't have the same real world experience. It's true, I don't have a lot of experience cutting deals with JP Morgan or other big Wall Street investment banks, but that's part of the problem in America today. Too much of our economy has been sabotaged in this fashion."
Lewis contends that the Senator was a well regarded Superintendent with what appeared to be a sophisticated business resume and so he was trusted. But in election terms, with widespread unemployment and personal financial struggles among the electorate, "I just think the country is sick of big corporations, big banks, and Wall Street, and usually we blame the Republicans but this just shows that the Democrats are just as ensnared as everyone else and this is what the voters want to change."
How much constituent fallout Bennet will see from the JP Morgan deal hitting headlines may be tough to gauge. A number of voters in Colorado have already cast their ballots. 46 of Colorado's 64 counties are exclusively mail-in ballots for the primary. According the Colorado Secretary of State's office nearly 60 percent of this states' electorate will vote this way.