A coalition of city employee and community groups clashed with the city attorney’s office Thursday as they tried to persuade officials to file a complaint by a Friday deadline over what its members contend is a costly interest rate swap deal with a pair of Wall Street banks.
The city has until then to file a complaint to the Federal Industry Regulatory Authority alleging the Bank of NY Mellon and Dexia misled the city on the 2008 deal, which city officials entered into in order to pay for waste water infrastructure projects.
The Fix L.A. Coalition members, contending the city suffered financially from the deal, carried a sample complaint and an oversized check of $1,800 as filing fee payment to City Attorney Mike Feuer’s office, but were rebuffed by receptionists and a police officer.
After the gathering of about 10 people refused to leave, a spokesman for Feuer emerged and said the City Council received advice from city attorneys Oct. 16 on how to proceed with the swap deals. He said the advice was given in confidence, and it is now up to the council to act.
Coalition members ultimately failed to get the City Attorney’s Office to agree to file a complaint. They issued a statement later saying they are “deeply disappointed and angered that the Los Angeles City Attorney not only has failed to file a (Financial Industry Regulatory Authority) complaint to get millions of dollars — he has utterly failed to communicate whether or not he intends to pursue any action at all on this bad bank deal.”
The coalition contends the deal will cost the city $5 million a year, which might eventually add up to as much as $138 million.
City officials said the deals do not affect the city’s operating budget, but Coalition members said if the swap deal does poorly, it could delay needed improvements to the city’s waste water system.
— City News Service