"If Colorado securitizes its tobacco settlement, New York heavyweights Solomon [sic] Smith Barney, Morgan Stanley Dean Witter and Goldman Sachs would almost certainly emerge as front-runners to broker the deal, not a Denver firm, said Blackwood, of Bigelow & Co. 'This will be a New York deal,' he said. 'This deal is so large, none of the regionals are positioned to do a deal like that. A firm like ours... there is no way we are going to solo manage on a deal that size.'
"The investment banking industry has been lobbying state treasurers nationwide since mid-1999 on the potential benefits of securitizing tobacco settlement money, sponsoring educational conferences and mailing reams of literature on tax-free bond sales. 'Taking advice from people who have an interest like that is not that great a move,' said Steven Murphy, managing director of Standard & Poor's public finance department." Colorado weighs tobacco windfall by Marsha Austin, staff reporter, Denver Business Journal, 2000 Feb. 18.
But in the end, who cares - it's FREE MONEY anyway, because it was stolen!
Actually, according to Charles Gasparino of The Wall Street Journal, the investment bankers began their lobbying for securitization in early 1999 ("States Get Pitch on Street: Sell 'Tobacco Bonds,'" Wall Street Journal 1999 Mar. 1, p C1.
Austin / Denver Business Journal 2000"Tobacco Settlement Asset Securitization Corporation announces underwriting team," New York City Comptroller's Office press release, 1999 Mar. 5. "The senior managing underwriters for TSASC's Tobacco Settlement bonds will be Bear Stearns & Co. Inc., J.P. Morgan & Co. and Salomon Smith Barney, with Salomon Smith Barney appointed as book-running senior manager for the initial bond issue, which is expected to occur in July 1999. The initial firms selected to be senior co-managers are Morgan Stanley Dean Witter, Goldman, Sachs & Co. and Paine Webber Inc."
New York City Comptroller's Office press release, 1999"When Bear Stearns & Co. landed a no-bid contract to underwrite a $147 million stadium bond issue for Miller Park - collecting more than $1.8 million in fees - it prompted criticism of ties between the securities firm and the Thompson administration. Among the firm's executives were Nicholas Hurtgen, a top aide and fund raising advisor to Gov. Tommy Thompson who was hired in 1995 to work for Bear Stearns public finance department in Chicago. Peter Fox, a Bear Stearns executive, was also a key Thompson fund-raiser in Chicago. In 1997, concerns about potential tampering on no-bid state bond issues prompted an audit by the Legislative Audit Bureau. State Rep. Spencer Black, D-Madison, requested the audit after reports linked former Thompson Secretary of Administration James Klauser and campaign contributions from Wall Street bond firms doing business with the state. The audit found Merrill Lynch and Bear Stearns sold more than half of the $440 million in state bonds issued through negotiated agreements.
"To date, 15 governments have converted all or portions of their
tobacco settlements. New York City was the first to do so, securitizing
$709 million to pay for capital school projects. South Carolina has
done the largest deal to date, $934 million, which would be passed by
Wisconsin's $1.3 billion plan. Not all the states are expected to
convert their settlements, however. In Colorado, for example, the
Legislature rejected a proposal to move forward with a securitization."
(Tobacco deal's next winner. Hand-picked broker to get $12M fee. By
Mike
Ivey, The Capital Times (Madison WI), 2001 June 7.) Hurtgen, who faces federal charges in
Illinois over hospital kickbacks, is the brother-in-law of Philip
Morris lobbyist Phil Prange, whose wife, Alison, is Wisconsin
government relations director for the American Cancer Society.
"The three-person board overseeing the state's record $1.7 billion
dollar tobacco bond deal is rather awkwardly called the Badger Tobacco
Asset Securitization Corp. May we suggest a less cumbersome and more
apt name for this panel - say, All in the Family? Just last week, Gov.
Scott McCallum's administration named Madison wheeler-dealer John
Petersen III to the board, which was set up to sell the bonds. On
Monday, it then ratified the choice of Bear Stearns & Co. Inc., a
firm that just so happens to employ Petersen's son, Eric. Eric
Petersen's $18,000-a-year consulting job, according to records, is to
survey and identify on behalf of Bear Stearns "potential markets for
client's bond sales and governmental financing services in the state of
Wisconsin. In other words, drum up state government business for Bear
Stearns, a company with a stranglehold on Wisconsin's bond business."
Petersen's partner, William McCoshen, lobbies for Northwestern Mutual,
the parent company of Robert W. Baird & Co. Inc., the Milwaukee
securities firm that will also be one of the lead underwriters in the
deal. And Petersen himself once worked for Bear Stearns in New York.
"Throughout most of the Thompson administration, now deceased
super-lobbyist Jim Wimmer
carried water for Bear Stearns in Madison. Wimmer, who died in 1998,
was Eric Petersen's partner and mentor. It appears that Petersen, who
purchased Wimmer's business, assumed the Bear Stearns contract three
years ago. Just how close are these relationships? The elder Petersen
was the executor of Wimmer's estate." Fritz Ruf was also a member of
the board. (Everything relative with tobacco panel. By Cary Spivak
& Dan Bice. Milwaukee Journal Sentinel, Apr. 25, 2002.)
"Bear, Stearns and Company Attn: Peter B. Fox, 3 First National
Plaza, Chicago, Illinois 60602, (312) 580-4000 Subjects: any function
or activity of any branch, department or phase of federal, state or
local government; agriculture, outdoors or environment; taxation;
regulation of business, finance or insurance, or other topics
pertaining to the general public health or welfare. Wimmer, James W.,
Jr. " (Period ending May 5, 1990. Alphabetical Index by Name to
Lobbyists' Principals. Dec. 29, 1989.)
"Abstract Peter B. Fox, a native of Champaign, Illinois, is a Senior
Managing Director of Bear Steams & Company where is oversees the
firm's public finance activities. Fields Named Organization American
Cancer Society Department of Commerce (DOC) Stanford University
University of Illinois (at Champaign-Urbana) Wendy's (Fast Food) Named
Person Fox, Peter B.
Date Loaded 16 Mar 2005 Box 8062 Page 1: TI31262179 This
file has been removed"
Who lobbies on Wisconsin Tobacco Settlement Securitization? American Cancer
Society 56 hours; Wisconsin Academy of Family Physicians 15 hours;
Smoke Free Wisconsin 13 hours; Campaign for Tobacco-Free Kids 4 hours.
(Lobbying Effort by Budget Bill Subject. Tobacco Settlement
Securitization. Wisconsin Ethics Board, as of Monday, September 03,
2007.)
From the Legislative Fiscal Bureau Paper #885, "Discussion of Tobacco Securitization (Tobacco Settlement Securitization, 2001 April 26.
New York City: 11/99, $709.0M; Capital funding / schools
Nassau Co. (NY): 11/99, $294.0M; Health care / general expenses (deficits)
Westchester Co. (NY): 12/99, $103.0M; Advance payment of hospital debt
Tulare Co. (CA): 12/99, $45.0M; Establish endowment for general expenses
North Dakota: 3/00, $32.1M; Water resource projects
Monroe Co. (NY): 8/00, $163.0M; Refunding debt / capital projects
Erie Co. (NY): 9/00, $246.0M; Economic development / county expenses
Alabama: 9/00, $50.0M; Capitol projects / economic development
Chautauqua Co. (NY): 9/00, $30.0M; Capital projects / debt defeasance
State of Alaska: 10/00, $115.0M; School construction / renovation
Puerto Rico: 10/00, $409.0M; Capital projects and equipment
Niagara Co. (NY): 10/00, $48.0M; Refunding debt / capital projects
NY Co. Tobacco Trust: 11/00, $239.0M; Refunding debt / capital projects
Washington DC: 2/01, $525.0M; Refunding debt / capital projects
South Carolina: 3/01, $934.0M; Capital projects / health care / econ. development
Proposed offering, expected sale date Oct. 12, 2000, Northern Tobacco Securitization Corporation, Tobacco Settlement Asset-Backed Bonds. Bear, Stearns & Co.; Morgan Stanley Dean Witter; Lehman Brothers; Salomon Smith Barney; Merrill Lynch & Co.; First Union Securities; PaineWebber Inc.; Wedbush Morgan Securities Inc.; Ragen Mackenzie Inc.; Charles Schwab & Co.; Edward Jones.
NTSC Proposed Offering 2000 / State of Alaskacast 09-03-07