RISKY BUSINESS: Firms reap millions i...

RISKY BUSINESS: Firms reap millions in fees from swap deals

There are 53 comments on the The Morning Call story from Jun 7, 2009, titled RISKY BUSINESS: Firms reap millions in fees from swap deals. In it, The Morning Call reports that:

On a spring night in 2005, Stanley J. Majewski Jr. dazzled the Bethlehem Area School Board with a budget presentation that highlighted how a rise in home sales was triggering "a vibrant local economy" not seen since the fall of Bethlehem Steel a decade earlier.

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Dolusio

Lehighton, PA

#1 Jun 7, 2009
thanks Stan and Dr. Lewis. Talk about to butt holes. By the way Dr. Lewis's good friend is Bear do you think there was any "you scratch my back I'll scratch yours" going on . Who do you think is pocketing extra cash???? Dr. Lewis is very shady. He seems caring and concerned but he could care less. He would have fit well in with the other CEO's of the steel. Ask yourself :Who's smiling and could give a sh#t about the BASD taxpayers. after all this mess how much is Lewis and MaJewski raking in a year. LOTS

“Cool Logic - Burning Passion”

Since: Feb 07

Location hidden

#2 Jun 7, 2009
BASD pikers being eaten by the financial sharks and you get to pay for the meal...
Jim

Bethlehem, PA

#4 Jun 7, 2009
StaberDearth wrote:
BASD pikers being eaten by the financial sharks and you get to pay for the meal...
Great quote.......right to the point
PickleJuice

Bangor, PA

#5 Jun 7, 2009
The Board needs an Enema for being ignorant. They should be the ones looking out for the people. After all they are elected by the people. FIRE STAN, FIRE STAN! FIRE STAN!!!!!!
Ummmmm

Allentown, PA

#6 Jun 7, 2009
I don't understand economics and finance very well. I guess this could be summed up by saying "we got f*cked"?
Jack

Bethlehem, PA

#7 Jun 7, 2009
Now I am convinced, after reading this article it is time for a criminal investigation into these bond swaps. It is pretty clear to me that at a minimum Joe Lewis and Stan Majewski had a conflict of interest and quit possible reaped personal financial benefit from these swaps that only a complete investigation will reveal.

Joe Lewis is retired from the BASD but is double dipping at Moravian College. Joe continues to receive a salary while also receiving a salary at Moravian College. This really stinks and is just plan not right.

I would hope that Moravian College makes sure that Joe has no access to College funds what so ever and as a alumni I would hope the College would seriously consider terminating his employment. He cannot be trusted!!! Personally I won't be donating any funds to the school as long as he is employed at Moravian and I urge all other Moravian alumni who read this article to do the same.

Stan on the other hand is still working for the Bethlehem Area School District. I would like the board to explain why they have not terminated his employment for cause??? It seems clear to me that he either disregarded the board or deceived them on a number of occasions.

IT IS TIME TO CLEAN UP THIS MESS!!!
taxpayers

AOL

#8 Jun 7, 2009
Dr. Lewis moving to Moravian College is just giving him a new source to milk dry. Hopefully The college will review its decision before it effects its enrollment. By the way,not only is Stan still employed in a powerful position, but so is his wife too......Bethlehem THROW OUT THE TRASH!!
The River

Whitehall, PA

#9 Jun 7, 2009
"On a spring night in 2005, Stanley J. Majewski Jr. dazzled the Bethlehem Area School Board with a budget presentation that highlighted how a rise in home sales was triggering "a vibrant local economy" not seen since the fall of Bethlehem Steel a decade earlier. "
That statement was at best wishful thinking and more than likely an outright lie just to sell these swap products. A rise in home sales by no means automatically equates to a vibrant local economy. The national real estate bubble was simply due to the inflated easy money that flooded the system. The local Bethlehem economy experienced no real economic "boom" whatsoever. An economic boom occurs when local per capita income significantly increases, due to business expansion creating higher paying jobs. No such event happened in Bethelehem. As a matter of fact, price inflation has exceeded national averages in the Valley for most of this decade. Let's say that inflation is 6%(a common LV rate for this decade) and incomes increase 2%(another realistic number from this decade). That is actually a loss in purchasing power and a loss of prosperity. Despite the new McMansions and shopping centers, the Lehigh Valley economy has been stagnant for decades. ANd that is the reason school districts are resorting to these financial gambling instruments to make up for depressed tax bases.
Samuel Adams

Spring City, PA

#10 Jun 7, 2009
Stan and Joe should both be fired. That would really mess up Joe's retirement plans. If Joe is fired for cause his retirement package would be taken away.
basd taxpayer

Bethlehem, PA

#11 Jun 7, 2009
Stan and Joe proposed it, but the School Board approved it. If they didn't understand it, they could have raised their hand (just like our children are taught to do in school) and say "I don't get it. I need more explanation." DUH!! Like all politicians they were interested in getting re-elected and if they could keep taxes down during their term, it's back for another term. Well were stuck with them again. Its also interesting that the Morning Call waited until after the elections to run this story. Sounds like a RAT within the School Board.
The Bear

Brooklyn, NY

#12 Jun 7, 2009
The River wrote:
"On a spring night in 2005, Stanley J. Majewski Jr. dazzled the Bethlehem Area School Board with a budget presentation that highlighted how a rise in home sales was triggering "a vibrant local economy" not seen since the fall of Bethlehem Steel a decade earlier. "
That statement was at best wishful thinking and more than likely an outright lie just to sell these swap products. A rise in home sales by no means automatically equates to a vibrant local economy. The national real estate bubble was simply due to the inflated easy money that flooded the system. The local Bethlehem economy experienced no real economic "boom" whatsoever. An economic boom occurs when local per capita income significantly increases, due to business expansion creating higher paying jobs. No such event happened in Bethelehem. As a matter of fact, price inflation has exceeded national averages in the Valley for most of this decade. Let's say that inflation is 6%(a common LV rate for this decade) and incomes increase 2%(another realistic number from this decade). That is actually a loss in purchasing power and a loss of prosperity. Despite the new McMansions and shopping centers, the Lehigh Valley economy has been stagnant for decades. ANd that is the reason school districts are resorting to these financial gambling instruments to make up for depressed tax bases.
Absolutely correct and point well taken. Keep in mind that the largest LV employers for the last several years have been nonprofits and public entities. Also, the influx of people to the LV continued to work in North Jersey and NYC earning much more than local residents. Perhaps most importantly, but not as evident, has been the erosion of the value of the dollar for the last 20 yrs., decreasing by over 1/2. We in the LV have endured higher inflation on top of a ever worsening job market and spiraling currency. We are approaching critical mass, I fear.
WTF

Saylorsburg, PA

#13 Jun 7, 2009
Why is nobody in jail or committing the honorable sepuku?
Tom N

Philadelphia, PA

#14 Jun 7, 2009
Good Reporting Morning Call...

I wanted to tip my hat to The Morning Call for a great article on a complicated topic.

It appears that Lewis and Majewski were either complicit or ignorant with the dealings, which makes them culpable in both situations.

I remember Lewis getting hired years back, and the search that took place in hiring him. It reminds me of the exhaustive searches many failed Fortune 500 companies put into getting their bad (or corrupt) leaders, and the high salaries, bonuses, and guaranteed pensions they commanded.
You could have left the CEO position of many Wall Street companies - as well as the Bethlehem School Distric - EMPTY for the last five years (using a small group of execs or even the Board for direction), and ALL would be in better financial shape today.

There should be criminal investigations all up and down this chain of people and companies.
Hmmm

King Of Prussia, PA

#15 Jun 7, 2009
basd taxpayer wrote:
Stan and Joe proposed it, but the School Board approved it. If they didn't understand it, they could have raised their hand (just like our children are taught to do in school) and say "I don't get it. I need more explanation." DUH!! Like all politicians they were interested in getting re-elected and if they could keep taxes down during their term, it's back for another term. Well were stuck with them again. Its also interesting that the Morning Call waited until after the elections to run this story. Sounds like a RAT within the School Board.
Oh there is a rat alright! Her name is Judy Dexter. I heard she warned Stan before Easter about these articles. How would she know if she wasn't in on the conspiracy?
MaryPickford

Hazleton, PA

#16 Jun 7, 2009
News Article printed on FEBRUARY 2008-

"Money-Making Plan
Bethlehems school district has used derivatives to try to
make money. At an April 2005 meeting, Les Bear, of advisory firm
Arthurs Lestrange %26amp; Co. in Pittsburgh, told the school board by
arranging two interest-rate swaps tied to $110 million in bond
issues, the 15,350-student district could generate more than $11
million over 25 years.
School finance director Stan Majewski supported the plan.
“Mr. Majewski commented that we all try to surround
ourselves with people who know more than we do, minutes of the
meeting say.“He believes Arthurs Lestrange is the best public
financing department of any organization in this country.
None of the board members asked Bear or Majewski how much
the district would pay for the swaps, the minutes show.
A month later, Lestrange, working with a Lancaster,
Pennsylvania, firm called Access Financial Markets, negotiated
two swaps with JPMorgan and Morgan Stanley without competitive
bidding."
http://www.educationnewssite.com/business-edu...
wow

Clifton Heights, PA

#17 Jun 7, 2009
lets not forget that only three board members were on the board when this all started. lets not forget people like joe craig, who was joined at the hip with lewis. they shared many a breakfast and craig ran to his house to tell him he was resigning from the board because of 'medical reasons'
MaryPickford

Hazleton, PA

#18 Jun 7, 2009
I couldn't copy & paste the entire article but I can say with confidence this website is called
"Education News Site"
wow

Clifton Heights, PA

#19 Jun 7, 2009
Hmmm wrote:
<quoted text>Oh there is a rat alright! Her name is Judy Dexter. I heard she warned Stan before Easter about these articles. How would she know if she wasn't in on the conspiracy?
i think lesson and dexter have been the saviors. there is no love lost between them and stan and joe.
WHAT A LOAD OF BULL

Clifton Heights, PA

#20 Jun 7, 2009
what kind of person can still say i think it was a sound idea? also lets not forget that people like haytmanek, rosie, and joe craig pushed through a new contract for lewis before the old one expired and new board members came on who could have voted against it.
Vote

Emmaus, PA

#21 Jun 7, 2009
These people need JAIL time and ethics education.

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