OAKLAND, Calif. – Fighting back tears, anger in his voice, Al Marshall recounted how his “kids were crying when the judgment came down” to abandon the home in which they were growing up.
“I’m sick and tired of (these banks) holding the city of Oakland hostage,” Marshall, a city worker and member of Service Employees International Union (SEIU) Local 1021, told a crowd in front of city hall steps March 9.
Marshall said city workers are taking pay cuts, furloughs and layoffs while critical public services are being slashed. It’s high time, he added, for Wall Street banks “to step up and help fix the mess they created.”
SEIU organizer Ariana Casanova told the World the protest is the first of several actions demanding from the big banks financial relief for homeowners and for Bay Area cities. The action was part of a national campaign by SEIU and community allies.
Demonstrators called on big banks to renegotiate or cancel “interest rate swap” agreements they now hold with Oakland and other Bay Area cities. This action followed “a historic vote” by the Los Angeles City Council last week to no longer do business with banks that refuse to renegotiate or cancel swap deals to help the city recover, SEIU said in a press advisory. In Pennsylvania and Tennessee, lawmakers are also pursuing action on the swap deals.
“We are not going to patronize banks anymore that loot and steal our money,” said Andy Stern, SEIU International president, “We rescued these banks and now we expect a fair treatment.” Stern was one of several speakers, including city council members, representatives of unions and community organizations, and Oakland residents recently victimized by the banks.
Wall Street banks sell swap deals to cities and states at a fixed interest rate during periods of economic upswing. In return these government entities pay banks back what they owe at the fixed rate and the banks take the liability if rates go up. That seems like sound business practices for the banks and protection for cities and states against unexpected interest hikes.
However, during the periods of capitalist economic slump when interest rates tend to bottom out as in the current devastating crisis, big banks get off like bandits and cities and states are left holding the bag.
This year Oakland will pay $5.2 million on its swap deal with Goldman Sachs, exceeding the city’s $4 million budget gap. Goldman insists that Oakland pay the interest on the swap deal through 2021 even though the city five years ago paid off the underlying bonds that were part of the swap, SEIU’s press advisory said. If Oakland were to exit the deal, it would have to fork up $19 million in termination penalties.
Bay Area cities will dole out more than $150 million to big banks on these swap agreements while, in many cases, what they are paying back in interest on these deals is equal to or larger than their current budget gap.
Casanova said the labor-community coalition will come back to the Oakland City Council to request a base ordinance similar to that of Los Angeles and “more.” The group will also hold the banks accountable to homeowners threatened by foreclosure and to communities blighted by empty and often damaged structures when residents are forced to abandon their homes.
Moments after the rally, the crowd marched to a nearby branch of Citibank and entered the premises chanting “Banks got bailed out, we got sold out!”
While the dazed security guard strained his voice over the din, threatening to call police, the demonstrators handed over a poster-size letter making the case for their demands to bank management, promising “We will be back!”
Photo: Marilyn Bechtel/PW