On June 24, a delegation of local school council leaders, students and supporters from Pilsen and other communities paid a visit to Jim Reynolds, president and CEO of Loop Capital Markets LLC. The group demanded the renegotiation of its company’s portion of “toxic swaps” costing Chicago Public Schools and the city of Chicago $72 million a year. Interest rate swaps or toxic swaps are highly speculative financial instruments entered between banks and CPS as well as other city of Chicago departments. “Toxic swaps” cost public schools almost $36 million every year at a time of record school closures and further reduction of individual school budgets.
“The children in my school can’t even get a decent place to play, why should companies like Loop Capital be getting the money that belongs to our kids?” said Rosemarie Sierra, local school council president at Pilsen Community Academy. “Taking money from neighborhood children to give it to bankers is wrong. This deal has to stop.”
The largest school closing in U.S. history a few weeks ago in Chicago is being topped off by budget cuts to individual schools of up to 25 percent. Pilsen’s Jungman Elementary, for instance, lost seven teachers and $535,000, according to school officials. This will mean that class sizes will go from 20 students to 30 students, according to the school administration. While CPS refuses to provide a complete picture of the budget cuts, the shortages reported in 100 schools so far amount to $70 million, according to Raise Your Hand Illinois.
“What kind of a mayor tries to balance the budget on the back of public school children while letting bankers make millions off of public schools?” said Rosalie Mancera, a Pilsen resident. “We cannot let them get away with this shameful attack on working communities to the benefit of the one percent.”
Meanwhile, the city pays out $72 million dollars a year to cover losses in “toxic swap” deals, according to research by the Grassroots Collaborative. From five deals with the City of Chicago and CPS starting in 2005 through 2011, Loop Capital has made $100 million in profits to date.
by Nelson Soza
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