The New York Times article on “exotic” financial investments at Denver Public Schools during Sen. Michael Bennet’s tenure as superintendent set the Colorado Democratic primary abuzz today, and the news has already been hastily converted into a campaign ad by his opponent, Andrew Romanoff:
Romanoff and Bennet argued over the financial deal’s complexity and the ultimate effect it has had on Denver Public Schools’ pension solvency:
In a series of interviews today, Romanoff questioned Bennet’s financial expertise, saying, “When you lay out the whole picture, it is disturbing the risks they took with our tax dollars.” Bennet touts himself as a turnaround expert, Romanoff added, “but when people actually raise questions about the details, he attacks them.”
In defending the deal, the Bennet campaign said the financing, in which DPS sold hundreds of millions of dollars in bonds and then used derivatives to try and improve its interest rates, will still be a net plus in the long run.
“DPS has invested almost $20 million more into our classrooms as a result of decisions we’ve made,” Bennet said in the statement.
According to the Denver Post, Romanoff-backing school board member Jeanne Kaplan shopped the story as early as March. Kaplan did not reveal her political leanings to the NYT, and the DPS school board has fractured over the Bennet/Romanoff primary:
“I hoped the story would have come earlier so we could have had a conversation about it,” she said. “I don’t want it to be about politics. It’s not a good thing to have come out this weekend. There are some real issues here. To get overshadowed by the politics is really sad.”
Yet, over the past four months the issue has been a regular source of discussion in board meetings. Kaplan and Board Member Andrea Merida support Romanoff, while Board Member Theresa Peña is the unpaid treasurer of Bennet’s campaign and others on the board support the former superintendent.
“It’s very unfortunate to have the mudslinging and the falsehood of the political campaign injected in the Denver public schools,” said current DPS superintendent and former Bennet deputy Tom Boasberg, who wrote a line-by-line analysis claiming numerous factual errors in the Times story.
Bennet contacted the left-leaning Colorado Independent to try to set the record straight, noting that the story of DPS financial stability has been ongoing, and has been misrepresented as a “bombshell”:
“I know the New York Times is always looking to break a big story, but in this case, they just got it wrong,” Bennet wrote to the Colorado Independent. “This story has been covered by local reporters who have provided more balanced, fair, and accurate coverage. The New York Times got caught up in a heated political primary where my opponent and his supporters have repeatedly tried to score points at the expense of kids and have once again disregarded the facts.” […]
But the DPS deal has been a topic of scrutiny for months. Bennet has said that as a result of the deal with JP Morgan Chase, DPS is paying less now than it would have had the deal never been accepted. Writing a comprehensive survey of the question for Colorado Education News, financial analyst David Milstead, a longtime finance writer for the Rocky Mountain News and the Wall Street Journal among other publications, essentially agreed with Bennet’s read on the pluses and minuses of the deal.
Milstead writes that the flashy deal solved shortfalls for the system that would have left teacher pensions millions bereft but that plunging global markets wrecked expectations of greater short term savings. DPS is now, however, saving millions after markets stabilized, effectively making the deal an even split. [emphasis added]
Bennet addressed the article in a news conference this afternoon:
On Friday Bennet embarked on a 24-hour whirlwind tour of Colorado’s Front Range and Eastern Plains, and his campaign has been issuing frequent updates through Bennet’s Facebook page.