Chicago community activists and local elected officials delivered 88,000 petition signatures to the U.S. Securities and Exchange Commission's (SEC) regional office Thursday morning, urging the agency to investigate complex financial agreements called interest rate swaps.

Those who delivered the petition signatures, collected online by the Grassroots Collaborative and several other organizations, say cash-strapped local and state governments are being squeezed by the "toxic swaps" they entered into with banks before the Great Recession. The complicated deals, which come with hefty penalties and termination fees, were intended to save taxpayer-backed organizations money, but they backfired when the economy crashed.

"These are the same toxic swaps that have drained millions of dollars out of our city, state and (Chicago Public Schools) budgets and are hurting cities and states across the country," Saqib Bhatti, director of the ReFund America Project, said outside the SEC's Chicago regional office, 175 W. Jackson Boulevard.

Illinois State Reps. Robert Martwick (D-Chicago), Emanuel "Chris" Welch (D-Westchester) and Chicago Ald. Carlos Ramirez-Rosa (35th Ward) joined activists at the petition delivery.

Petitioners want the SEC to "investigate the 'toxic swaps' Wall Street is using to impoverish our cities and towns -- and make bankers return all ill-gotten profits from deceptive and fraudulent sales."

The state of Illinois has already paid $684 million for interest rate swaps and could be forced to pay an additional $870 million in November if "the state does not sue or renegotiate these deals," according to the Grassroots Collaborative.

Interest rate swaps, Ramirez-Rosa said, have cost the city of Chicago and CPS over $1 billion in combined payments, plus $600 million in costs associated with terminating the agreements.

"That $600 million in ransom to the banks went to go pad their bottom line," Ramirez-Rosa said. "The banks don't need more money. Our neighborhoods desperately need these funds. ... The SEC can act now to recuperate some of that money for the city of Chicago and the Chicago Public Schools, and they can act now to defend the state of Illinois from further payments, from paying a larger ransom, to these banks."

Welch said he is "disgusted" that "big banks continue to profit at the expense of our most vulnerable." He urged Illinois Gov. Bruce Rauner, Chicago Mayor Rahm Emanuel and CPS CEO Forrest Claypool to join the push for an SEC investigation into swap agreements.

"We ask the governor and our leaders in this city to stop putting banks before books," Welch said.

Here's more from the lawmakers at the petition delivery:

Organizers and the elected officials dropped off the petition signatures at the SEC's Chicago office, where a receptionist said she would give the documents to the regional director.

In addition to the Grassroots Collaborative, the online petition was circulated nationwide by Americans for Financial Reform, the Center for Popular Democracy, CREDO Action and Rootstrikers.

Read Progress Illinois' past reporting on how interest rate swaps work and their financial impact on the state, city of Chicago and CPS.

by ELLYN FORTINO 

Source