Written by John Nordquist and Lisa Loring
It is the position of The Daily Kenoshan that the CDO cloud hanging over our Kenosha public schools be referred to the U.S. Attorney for investigation and prosecution. From its inception the investment, which has lost $23,000,000 to date, has been cloaked in lies, false characterizations of the nature of the investment, and was illegal under state law.
Documents received by KENOSHA NEWS reporter Gary Kunich show that KUSD board members knew as early as May of 2007 that the investment was in danger, yet despite that knowledge, board and district officials persistently lied to the public by insisting that the investment was sound and safe. Under State law, speculative and risky investments of public money is illegal. The KUSD Board knowingly and incorrectly characterized the investment as "bonds" which would mature in 2112. The investments in no way resemble bonds, but are in fact Credit Default Swaps with no promise of return.
The State Department of Public Instruction warned the KUSD, many months prior to the commitment of public funds, that they must not risk public money in risky investments.
The original advisor guiding the District in the CDO investment characterized it as risky and warned the board accordingly.
In addition to these facts, the relationships and associations of key players in this scheme suggest that the investment was made with no regard to future loss. The same investment firm is also accused of duping Lac du Flambeau of nearly $30 million in risky and failing casino schemes, while the former KUSD Board President has inherited the Troha Kenosha Casino scheme.
The fact that the Board of Education persistently and knowingly lied to the public and to those inquiring about the investment, and even attempted to discredit those asking questions by referring to them as 'troublemakers' makes it painfully clear that without the full weight of the U.S. Attorney's office investigating the matter, the truth would be covered up and responsibility denied. At this time, anyone inquiring from the elected officials about the investment are referred to a PR firm for answers rather than providing facts to their constituency. Since the investment involves banking interests that are outside of the United States, local and State authorities would be less likely to succeed in investigating and prosecuting the matter.
We are therefore pressing for this matter to be taken up by the U.S. Attorney for the Eastern District of Wisconsin to properly investigate, assess responsibility and prosecute as necessary.
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2 comments:
When they are done investigating the KUSD, they can drive down the road and take a gander at the RUSD. There are more than a few skeletons to unearth here. What is it with the school district's blatant non-conformation to rules and regulations?
While the Chicago Public Schools have problems of their own, they, and Philadelphia as well, have a more sensible district management structure, in my opinion.
When we elect school boards, we're electing teachers, parents, business persons, and others with perhaps ZERO experience running a multi-million dollar conglomerate like KUSD and RUSD. They have issues they run on, and beyond that, its like having a flight attendant act as pilot of a 747.
In Chicago and Philly, the City Council appoints the school board, selecting candidates who are degreed education and economics professionals who are applying for the salaried job. They work under the direct jurisdiction of the city and individually may be removed at any time.
To meet parent and community needs, each school has a Local School Council that helps to make policy for that particular school, in line with the over all district policies.
It's a model perhaps larger school districts should consider and not give the keys to our jumbo jets to unqualified pilots.
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