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.

Join the discussion below, or Read more at The Morning Call.

Sally

Bethlehem, PA

#22 Jun 7, 2009
wow wrote:
<quoted text>
i think lesson and dexter have been the saviors. there is no love lost between them and stan and joe.
Your first sentence is utterly preposterous. These two, along with the rest of the BASD board and administration are running for cover. All are complict in this deal. Leeson's quote about how the advisory firm let them down is more sad than true. Can't duck this won Loretta.

Since: Jan 09

Riegelsville, PA

#23 Jun 7, 2009
I don't know what all the fuss is about. Men who already have money are making more on the backs of the taxpayers and consumers by doing what is in THEIR best interests...isn't that how things work in America today? Isn't that business as usual?
Mr. Lewis and Majewski would make any PA politician proud with the way they lined their pockets with their self-interests and conflict of interests.
Something tells me the well being of BASD was somewhere far down their list of concerns.
jim

Bethlehem, PA

#24 Jun 7, 2009
wow wrote:
<quoted text>
i think lesson and dexter have been the saviors.
great use of irony/sarcasm
basd taxpayer

Bethlehem, PA

#25 Jun 7, 2009
wow wrote:
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'
You are right about not everyone was on the Board when it STARTED. But this has been ongoing... Leeson was there when it all began and Dexter came on soon after. How were they saviors?
The River

Northampton, PA

#26 Jun 7, 2009
The Bear wrote:
<quoted text>
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.
Yes, inflation is the secret killer in the economy and it is a problem totally created by the Federal government and the Fed Reserve. We are a nation deeply in debt to ourselves and the rest of the world. It is difficult to believe that the international community will continue to bail us out by purchasing our debt. If China, Russia, and Japan stop purchasing our debt, we will experience an inflationary depression on a scale that is almost unimaginable. I am an optimist, though. We are still America and we still possess the genius to solve major problems. People are waking up and I believe we can and will avoid an apocalyptic situation.
But still, it is a good idea to put a little money if you have some savings into precious metals assets just in case the worse case scenario happens.
Southside resident

Westville, NJ

#27 Jun 7, 2009
Thanks to The Morning Call and to Tim Darragh & Steve Esack for this in-depth reporting and analysis.

I don't know whether there were any kickbacks or other benefits to the BASD folks, but it's obvious that there was, at a minimum, a huge conflict of interest with Bear filling multiple roles. This is not unique to this problem, however -- BASD's consulting engineer is from a local firm that also contracts specific jobs. While he seems to be doing a good job, there's certainly a conflict of interest when a firm that recommends certain courses of action also bids on them.

And when the District changed financial auditors last year, the new auditors reported a large number of discrepancies and failures to abide by basic accounting requirements or even common sense.

So we still don't know how bad things are -- they could be better or worse than they appear. A thorough, independent, no-holds-barred investigation is the only way we'll ever find out!
LV Reader

Lansdale, PA

#28 Jun 7, 2009
Ummmmm wrote:
I don't understand economics and finance very well. I guess this could be summed up by saying "we got f*cked"?
If you're under 35 years old then maybe you were naive and didn't know what was happening. You grew up in good economic times and didn't experience how hard things can be.
The board members are definitely old enough to remember the 80's and double digit interest rates. Mortgages are long term instruments. Why would someone with a 5% fixed rate enter into a swap? It's really just gambling.
Majewski appears to have a gambling problem, and he's using the taxpayer to fund his addiction. It's either that or he was in bed with the finance company. How could anyone lose so much and not stop?
Angry taxpayer

Philadelphia, PA

#29 Jun 7, 2009
I cannot understand how Mr. Majewski has not been fired. The BASD board did approve them, but they rely on the financial person to ensure it is a sound investment. At any company, that is the CFO's responsibility, which basically Mr. Majewski is for the school district. If this happened in any company, the CFO would be fired. But again in most company's there are internal controls to ensure this does not happen. Does Mr. Majewski get to make risky investments with the tax payers money without any controls!!!! He needs to be fired, Lewis too, but since Lewis is leaving the mess, someone needs to be held accountable.
WONDERING

Ridley Park, PA

#30 Jun 7, 2009
Whatever happened to all the stolen and missing lap top computers that BASD lost over the Lewis years? Thousands and Thousands of Dollars.

I guess the taxpayers take it in the butt for that one too.

Thank LEWIS and School Board for doing nothing AGAIN
Bethlehem City Too

Bethlehem, PA

#31 Jun 7, 2009
Check the Callahan bond swaps and you'll find the same kind of dirt. Some of the shenanigans were thwarted, some went through.It's a family affair in Bethlehem between the City Council, the Mayor, and their cronies. Literally, a family affair.
mama mia

Glenolden, PA

#32 Jun 7, 2009
to think that stan the man quit basd, went to northampton community college, and was begged back by the basd(i'm sure with a raise) he was gone and they pulled him back.

“Cool Logic - Burning Passion”

Since: Feb 07

Location hidden

#33 Jun 7, 2009
Jim wrote:
<quoted text>
Great quote.......right to the point
The point I'd like to now see is the pike pole point that all BASD board members' heads should be on!

So what happens now? Everyone just shrugs their shoulders flips their open palms up and says, oh well...?
fool

Trenton, NJ

#34 Jun 7, 2009
wow wrote:
<quoted text>
i think lesson and dexter have been the saviors. there is no love lost between them and stan and joe.
Oh, please! Leeson is pointing fingers all around instead of accepting responsibility for her own votes. All of the board members asked for their jobs, wanting the spotlight. Own up!! Stan and Joe Lewis should be investigated for off shore accounts!
LV Guy

Bethlehem, PA

#35 Jun 7, 2009
The PA State Attorney General needs to visit Bethlehem.
basd taxpayer

Bethlehem, PA

#36 Jun 7, 2009
Angry taxpayer wrote:
I cannot understand how Mr. Majewski has not been fired. The BASD board did approve them, but they rely on the financial person to ensure it is a sound investment. At any company, that is the CFO's responsibility, which basically Mr. Majewski is for the school district. If this happened in any company, the CFO would be fired. But again in most company's there are internal controls to ensure this does not happen. Does Mr. Majewski get to make risky investments with the tax payers money without any controls!!!! He needs to be fired, Lewis too, but since Lewis is leaving the mess, someone needs to be held accountable.
You are right about firing the private industry CFO, but that CFO is probably making more in one week than Majewski makes in a year. You get what you pay for.
elmer

Bethlehem, PA

#37 Jun 7, 2009
Just a few more greedy butt holes. Filling their pockets at the tax payers expence.
Taxpayer

United States

#38 Jun 7, 2009
Southside resident wrote:
This is not unique to this problem, however -- BASD's consulting engineer is from a local firm that also contracts specific jobs. While he seems to be doing a good job, there's certainly a conflict of interest when a firm that recommends certain courses of action also bids on them.
That is a common practice in every field, at least they have competitive bidding on those projects and thats how it should be done. Engineering firms have two roles to play and as long as they following the same bid docs everyone else does they should not be counted out, or you won't have many enginers willing to consult because it will excude them from bidding. But let us remind ourselves that those services are done by Bid and may the lowest bidder win.

Since: Mar 07

Bethlehem, PA

#39 Jun 7, 2009
Why does this sound like a Ponzi Scheme to me?
Sparky

Washington, DC

#41 Jun 7, 2009
It's supposed to rain again on Tuesday.
jones

AOL

#42 Jun 7, 2009
Joe Craig was a plant on the school board to vote for every athletic program that came before the board. He was a gym teacher and didn't know what made a tennis ball bounce let alone figure out how Stan's bounce in the Swaps worked. Now every one admits they didn't understand Stan's presentation of the swaps but voted for them any way.

You think Stan has a gambling problem and an addiction ? Oh yeah, here come de judge.

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