Why is the Chicago Teachers Pension Fund Investing with Company the CTU Protested Against for Toxic Swaps
By Jim Vail
The Chicago Teachers Pension Fund (CTPF) has invested $10 million in an infrastructure fund set up by Loop Capital, an investment company that the Chicago Teachers Union (CTU) once protested against in 2014.
In a Labor Beat video posted on Substance News Sept. 19, 2014, CTU members marched in front of the Chicago headquarters of Loop Capital, a private investment company they say extracted through risky interest rate swap deals over $100 million yearly from the city´s public schools that were facing major cuts.
The video is available from Labor Beat at youtu.be/46gRPVpYdpw
The video features former CTU staff coordinator/ chief of staff Jackson Potter, organizer Matthew Luskin, President Jesse Sharkey and former Financial Secretary Kristine Mayle saying that when these loans were set up, banks such as Loop Capital failed to fully disclose the risks of the agreements. The protesters called for then Mayor Rahm Emanuel to file for arbitration so that CPS and the city can renegotiate the loans in order to recover hundreds of millions of dollars which would have helped alleviate the schools funding crisis.
¨But Mayor Emanuel doesn´t want to have these swaps arbitrated, probably because his friend Jim Reynolds, head of Loop Capital, is making so much money from them,¨ Substance reported. They further reported that Loop threatened to call the cops on the protesters.
Jim Reynolds is now investing money for the Chicago Teachers Pension Fund that will earn him a 1.5% management fee, or $150,000 for one year on $10 million investment, according to one board trustee. After they return the $10 million investment the pension fund can then earn 80 percent on profit and Reynolds will earn 20 percent.
Reynolds also told the media that teachers are more concerned with their pensions than the curriculum.
"I hear the teachers union talk a lot about pensions but not about what's going on in the classroom," Reynolds told a local newspaper.
Former Chicago Teachers Union President Karen Lewis responded, "Parents have watched class sizes grow, after-school programs close and experienced teachers get laid off while bankers like Mr. Reynolds and billionaire tax loopholes were protected."
Reynolds has teamed up former NBA superstar Magic Johnson to create the infrastructure investment fund as a minority firm. The city mandates that a certain number of contracts go to minority firms.
Magic Johnson earlier teamed up with Edison Schools, a controversial for-profit education company tied to charter schools which once sold shares based on how well its schools performed. He ended the partnership in 2016.
Edison was at the forefront of the education reform mania when it saw its share price go to $40 in 2001, before falling to 14 cents after the SEC charged that Edison failed to disclose that as much as 41 percent of its revenue that year consisted of money it never saw, a similar charge for many charter school scams including the old UNO Charters, now Acero. Edison went private in 2003 in a buyout from the Florida Retirement System, which handles pension investments for the state´s public school teachers.
When CORE trustees led by Jay Rehak, president of the CTPF board of trustees, first took office about 10 years ago, they vowed to not give pension money to funds that supported charter schools.
That should include Loop Capital and others who robbed our schools and bash our teachers!
By Jim Vail
 |
| Jim Reynolds, Loop Capital & teacher basher |
The Chicago Teachers Pension Fund (CTPF) has invested $10 million in an infrastructure fund set up by Loop Capital, an investment company that the Chicago Teachers Union (CTU) once protested against in 2014.
In a Labor Beat video posted on Substance News Sept. 19, 2014, CTU members marched in front of the Chicago headquarters of Loop Capital, a private investment company they say extracted through risky interest rate swap deals over $100 million yearly from the city´s public schools that were facing major cuts.
The video is available from Labor Beat at youtu.be/46gRPVpYdpw
The video features former CTU staff coordinator/ chief of staff Jackson Potter, organizer Matthew Luskin, President Jesse Sharkey and former Financial Secretary Kristine Mayle saying that when these loans were set up, banks such as Loop Capital failed to fully disclose the risks of the agreements. The protesters called for then Mayor Rahm Emanuel to file for arbitration so that CPS and the city can renegotiate the loans in order to recover hundreds of millions of dollars which would have helped alleviate the schools funding crisis.
¨But Mayor Emanuel doesn´t want to have these swaps arbitrated, probably because his friend Jim Reynolds, head of Loop Capital, is making so much money from them,¨ Substance reported. They further reported that Loop threatened to call the cops on the protesters.
Jim Reynolds is now investing money for the Chicago Teachers Pension Fund that will earn him a 1.5% management fee, or $150,000 for one year on $10 million investment, according to one board trustee. After they return the $10 million investment the pension fund can then earn 80 percent on profit and Reynolds will earn 20 percent.
Reynolds also told the media that teachers are more concerned with their pensions than the curriculum.
"I hear the teachers union talk a lot about pensions but not about what's going on in the classroom," Reynolds told a local newspaper.
Former Chicago Teachers Union President Karen Lewis responded, "Parents have watched class sizes grow, after-school programs close and experienced teachers get laid off while bankers like Mr. Reynolds and billionaire tax loopholes were protected."
Reynolds has teamed up former NBA superstar Magic Johnson to create the infrastructure investment fund as a minority firm. The city mandates that a certain number of contracts go to minority firms.
Magic Johnson earlier teamed up with Edison Schools, a controversial for-profit education company tied to charter schools which once sold shares based on how well its schools performed. He ended the partnership in 2016.
Edison was at the forefront of the education reform mania when it saw its share price go to $40 in 2001, before falling to 14 cents after the SEC charged that Edison failed to disclose that as much as 41 percent of its revenue that year consisted of money it never saw, a similar charge for many charter school scams including the old UNO Charters, now Acero. Edison went private in 2003 in a buyout from the Florida Retirement System, which handles pension investments for the state´s public school teachers.
When CORE trustees led by Jay Rehak, president of the CTPF board of trustees, first took office about 10 years ago, they vowed to not give pension money to funds that supported charter schools.
That should include Loop Capital and others who robbed our schools and bash our teachers!
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