In last-minute sprint for votes, Sen. Bennet defends pension deal as Denver schools chief

Bennet defends pension deal in sprint for votes

ENGLEWOOD, Colo. — Sen. Michael Bennet launched a last-minute sprint for votes Friday amid questions about a pension financing deal he oversaw while superintendent of Denver Public Schools.

Bennet, who faces a tough Democratic primary Tuesday amid anti-incumbent sentiment, started a 24-hour dash for votes while blasting a New York Times report that said the financing deal he recommended in 2008 cost Denver’s school district millions of dollars in extra interest.

Bennet disputed the report and said teachers’ pensions are in better shape that they would have been without the financing plan.

“The deal has been very good for DPS,” said Bennet, who was surrounded by postal workers and teachers as he started his tour in west Denver.

Bennet took issue with the newspaper’s analysis that the deal has cost at least an extra $25 million so far, although that amount could decline depending on future market conditions. The financing was arranged to cover a $400 million gap in the school system’s pension fund.

Bennet and Thomas Boasberg, the current superintendent, said the deal has given the district $20 million in net savings, which is less than originally hoped but still enough to avoid teacher layoffs seen elsewhere.

Former school board member Jill Conrad defended the deal, too.

“The fact remains that this transaction has positioned DPS, its employees, and most of all its students to be better off in the long run that they would have been if we had not taken action,” she said in a written statement.

The Times’ report Friday came in the closing days of Bennet’s fierce primary battle with challenger Andrew Romanoff, a former state House speaker. Romanoff has described Bennet as being too cozy with Wall Street, based on the senator’s acceptance of campaign donations from major financial firms.

It wasn’t clear what effect the report would have on the contest because Colorado’s primary is mostly mail-in, and voters have been returning ballots for the last three weeks.

Bennet sought to distance himself from both Washington and Wall Street on Friday, donning a plaid shirt and jeans and boarding a 1964 bus to canvass workplaces through the night. The senator planned middle-of-the-night stops at hospitals and diners.

Bennet, who took over Ken Salazar’s seat in January 2009 after Salazar became Interior secretary, has depicted himself as an outsider. He called Washington “that infernal place” in one stop, and blasted Congress while talking to workers at a suburban Denver satellite company.

“I’ve tried very hard not to contribute to the nonsense,” he said.

The winner of Tuesday’s primary faces either Ken Buck or Jane Norton in November.

Bennet faced new questions about the complex financial transaction that aimed to save Denver’s schools millions of dollars in annual debt costs. Much like an adjustable-rate mortgage, the deal’s interest rate was subject to change depending on market conditions.

The district offered pension certificates with a derivative attached. They carried a lower interest rate than a simpler transaction at the time, but as the mortgage crisis grew and investors’ appetite for debt disappeared, the school system was on the hook to pay more.

School board members told the Times that Bennet and Boasberg persuaded them to approve the plan. The $20 million in savings the pair touted didn’t take into account hefty termination fees that come with such complex deals, the Times said.

Boasberg, however, said the $20 million was a net savings that did account for the fees and interest, and had it not been for the economic downturn, the district would have saved about $40 million. He declined to say Friday whether the district was actively trying to get out of the deal.

In March, three school board members, including Andrea Merida, a Romanoff supporter, raised questions about the deal after reading about similar deals across the country. At the time, Boasberg told The Denver Post he thought the query was politically motivated.

Merida was paid as a field organizer for Romanoff in May and June but didn’t work for the campaign at the time. She said Friday that neither Romanoff nor her support for him influenced her concern about the deal.

Henry Roman, head of the Denver Classroom Teacher’s Association and a Romanoff supporter, said the consequences of the deal, and whether teachers will lose their jobs as a result, are unclear.

“I think it’s something that needs to be investigated and looked at very closely,” said Roman, whose union represents about 4,500 teachers.