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By: Michael de Yoanna

Category: Economy, Politics, Panorama

Posted: August 6, 2010 10:57 AM

How Michael Bennet's DPS Deal Went Off Course

Michael Bennet has received plenty of praise from the White House for his innovative approach to education, including finding funding for Denver Public Schools. Now, as the Democrat fights to hold onto his U.S. Senate seat, he's defending a 2008 deal he helped convince school officials to accept in order to fill a $400 million gap in the pension fund. At the time, Bennet was the superintendent of DPS, and Tom Boasberg, the current superintendent, was serving as the school system's CEO. The New York Times writes that while the two claim their efforts with JPMorgan saved the school system money, the deal was also complex, involving multiple financial institutions and transactions with a variable interest rate. Then the economy was shaken up, and the transaction went "awry," leaving the school system to pay $115 million in interest and fees---at least $25 million more than was originally anticipated. Back in February, there were signs that DPS's budget was tight: A Denver Post story noted in passing that school-level budgets would be cut by 3.5 percent and the administration budget slashed by seven percent to obtain roughly $30 million in savings. Meanwhile, in an article quoting cynical election "observers," The Washington Post thinks that Bennet, who was slightly trailing former state House Speaker Andrew Romanoff in the latest poll, might have waited too long to start running negative ads against his opponent. The paper points out contrasts with Senator John McCain's fight to retain his seat in Arizona, writing that "some observers are wondering whether Bennet might have been better served by pursuing a McCain-style 'scorched-earth' strategy against his upstart primary opponent."
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