The Pittsburgh Post Gazette reports this morning that Bank of New York Mellon has reached a partial settlement with the Securities and Exchange Commission (SEC). Under the deal, the bank will stop listing services as "free" that it, in fact, charges a fee for. What remains to be settled are monetary damages for allegations that the bank overcharged pension plans and other clients for financial services.
- Patricia Sabatini, Pittsburgh Post-Gazette — BNY Mellon set partial deal Bank will alter foreign exchange marketing:
Bank of New York Mellon Corp. Tuesday reached a partial settlement with the U.S. Justice Department in a lawsuit accusing the custody bank of systematically overcharging pension funds and other investors by adding hidden spreads to foreign currency trades executed on their behalf...
The Pennsylvania Treasury Department has said it will decide this month whether to file suit on behalf of the state's pension funds.
Bailed-out banks making money from complex financial deals. Where have we heard that before?
- Joseph N. DiStefano, The Philadelphia Inquirer — PhillyDeals: Activists push Philadelphia to recoup losses on interest-rate swaps:
Philadelphia should demand that Wall Street banks refund half a billion dollars lost or owed by city agencies on interest-rate swap contracts that were supposed to cut city borrowing costs but instead swelled budget deficits at the worst possible time, a Harrisburg-based advocacy group and its labor-union allies say...
The School District of Philadelphia paid a net $161 million to Morgan Stanley, Goldman Sachs, and Wells Fargo Bank on 10 interest-rate swap contracts connected to bonds the district sold, starting in 2003...
Borrowers using the Philadelphia Authority for Industrial Development paid $33 million to JPMorgan Chase Bank and Merrill Lynch Capital Services on swaps sold in connection with a series of bond issues, and owe up to $111 million on swaps still in force.
Philadelphia International Airport paid an estimated $41 million to JPMorgan to settle swap options issued in connection with bond refinancing and owes an additional $58 million on swaps still in force.
Philadelphia water and wastewater agencies paid more than $10 million to Citigroup for swap options connected to bond refunding and owe an additional $16 million on swaps still in force.
And that's not counting swaps liabilities for the Board of City Trusts (which runs Girard College and Wills Eye Hospital), Philadelphia Gas Works, and other public agencies.
The Pittsburgh Post-Gazette reports this morning that the Port Authority of Pittsburgh, which operates the region's public transit system, is planning a new round of fare increases and services cuts. If completed, the cuts will mean the agency will provide half the level of service it provided a year ago. Remember this next time you read about a Pittsburgh employer complaining they can't find workers.
- Jon Schmitz, Pittsburgh Post-Gazette — More Port Authority transit cuts ahead: Port Authority CEO says rollback plan 'not a scare tactic,' pleads for state aid"
Venerable bus routes serving Mt. Lebanon, Coraopolis, Green Tree, Mount Washington, Oakmont, Edgewood and Sewickley will be among 45 routes eliminated by the Port Authority in September if there is no solution to a statewide transportation funding crisis.
Riders who aren't stranded will pay more — the authority plans a 25-cent increase in the base Zone 1 fare, to $2.50, on July 1. Zone 2 rides will go up 50 cents, to $3.75. It will be the fourth fare increase in the past 4 1/2 years. The last was in January 2011.
As part of a 35 percent reduction in service hours that would take effect Sept. 2 — the largest cut in the agency's 48-year history — all of the authority's current 102 bus and rail routes would be scaled back, some ending altogether and others with deep drops in off-peak and weekend service...
The reduction, coupled with a 15 percent service cut last March, would leave the region's biggest transit agency with barely half of the service it offered a year ago.
An estimated 500 to 600 jobs could be eliminated, with most of that achieved through layoffs, authority CEO Steve Bland said...
According to the agency's most recent audit, state operating assistance decreased by $34.2 million in the fiscal year that ended last June 30, a 19 percent drop. State aid makes up more than half of the authority's income.
Loyal readers of this blog know that the Pennsylvania Department of Public Welfare (DPW) has proposed limiting access to food stamps and terminated health care for thousands of children. These moves have been advocated by the Corbett administration as common sense efforts to root out fraud and abuse. The Philadelphia Inquirer reports this morning that an advisor to the DPW advocates for these kind of changes as part of a broader culture war. Warning to readers, to read some of the really creepy stuff I'm just going to send you to the full article.
- Angela Couloumbis and Amy Worden, The Philadelphia Inquirer — Corbett aide who edited conservative journal resigns:
A high-level Corbett administration adviser resigned his $104,470 position Tuesday after questions were raised about his outside role as editor of a conservative faith-based journal...
[Robert W.] Patterson was hired in October by Welfare Secretary Gary Alexander as a special assistant to help set policy for services provided to millions of Pennsylvanians through the Department of Public Welfare (DPW)...
In the journal, Patterson has weighed in on everything from what he called "misguided" programs that grew out of the 1960s War on Poverty - programs now administered by DPW - to what he described as a woman's ideal role in society: married and at home raising children.
Carey Miller, spokeswoman for DPW, said Patterson submitted his letter of resignation Tuesday.
Asked why, she said Patterson had formally requested to remain in his position as the journal's editor while working for the state, but his request had been rejected.
She would not say why Welfare Secretary Alexander had hired him, whether Alexander was familiar with his writings, or whether he agreed with Patterson's oft-expressed view that many social welfare programs have worsened the lot of the poor by promoting single motherhood and displacing marriage as a way out of poverty.
"It is irrelevant to get into that," Miller said. But she added: "I can say that the journal does not reflect the views of the Corbett administration."
In the journal's summer issue, Patterson authored a piece defending what he called "pay-as-you-go entitlements," such as Social Security, but advocated scaling back assistance programs such as Medicaid, food stamps, the children's health insurance program, and cash assistance for the poor.