Monday, March 15, 2010

Grad School Admission Test (Yinzer Edition)

1. If InsolvenCity's finance director (assume the director is the final survivor of a three-clown circus) publicly accepts or releases a legal opinion, a strategic suggestion, a financial forecast or a policy argument supporting a plan to use a vital public asset to rehabilitate a hideously underfunded pension fund, that action signals that which of these conditions has been met?

(a) the plan includes gigantic upfront fees for politically connected financial, legal and business advisors;

(b) the plan includes prearranged jobs for several of the mayor's associates;

(c) the plan will inflict heartache on city residents, parkers and pension beneficiaries for decades; or

(d) all of the above.

Please discuss your response.

1 comment:

Anonymous said...

The correct answer is D.

From the PG...
This year, when the city faced a possible state takeover of its ailing pension fund, Mr. Verbanac got involved again. On Sept. 3, when Mr. Ravenstahl e-mailed data to Sen. Jane Orie, R-McCandless -- in an effort to win her over to his position that a takeover would hurt the city, while continued local management could right the fund -- he sent a copy to Mr. Verbanac.

"I know the issue intimately," Mr. Verbanac explained.

Mr. Kunka knows the issue intimately as well:
1. Morgan Stanley gets $3 million+ up-front fee for the lease
2. Morgan Stanley takes long-term ownership of the public assets at a deeply discounted rate.
3. Fees will be paid for the "local management." of the proceeds.

There is a lot of public money to go around for all the "team members" if this deal takes place.

Residents of Pittsburgh and western Pennsylvania should be asking how this lease will benefit anyone other than those who are intimately involved?