Governor Kotek Vetoes Bill to Study Creation of State Bank
Wall
Street and Other Financiers are Big Donors to the Democratic Governors'
Association, which gave $4.9 million to Kotek's 2022 campaign
August 7, 2023
Governor
Tina Kotek on August 4 vetoed a bill passed by the Oregon Legislature
(HB 2763) to set up a task force to study the creation of an Oregon
state bank. Such a bank, like the Bank of North Dakota that has been
operating since 1919, could save Oregon taxpayers billions of dollars
in unnecessary fees to Wall Street vulture capitalists and save Oregon
businesses and students additional billions of dollars in the form of
lower interest rates.
First, the State of
Oregon has over $134 billion of investment funds but has placed much of
it with world-wide vulture capitalists, corporate raiders, leveraged
buyout artists, and hedge funds. These Wall Street operators charge
Oregon huge fees (not fully disclosed), likely over $1 billion per
year. They invest almost 100% of the money in enterprises outside of
Oregon.
That includes $223 million in “an Israeli company whose smartphone spyware has been used against dissidents, human rights defenders and journalists by repressive regimes” and “two prison companies that run immigrant detention facilities.” -- Associated Press (November 19, 2019)
Second, both
the State of Oregon and its counties, cities, and districts also pay
huge fees to Wall Street firms in order to float bonds to pay for
public works. The typical fee on $100 million of bonds is $3 - 5
million. Local governments in Oregon typically issue over $3 billion in
bonds. That’s at least $150 million in fees to Wall Street every year,
not to mention the higher interest rates that Oregon government have to
pay on their bonds, compared with the rates charged by the Bank of
North Dakota.
So
Oregon taxpayers pay Wall Street to "manage" our money and then pay
Wall Street again to borrow money that we had in the first place.
We
can cut out the middle men. Oregon should use its investment funds for
public works (transportation, bridges, water systems), housing, and
small business opportunities in Oregon. Oregon local governments should
borrow funds from the State of Oregon and avoid the huge cost of
floating bonds on Wall Street. See www.orpublicbank.org.
It
is not surprising that Governor Kotek would veto even a study of a
state bank. Such a study would show the huge benefits a State Bank
could bring to Oregon taxpayers and businesses--and students (the Bank
of North Dakota makes low-interest student loans). The Kotek campaign
in 2022 received $4.9 million from the Democratic Governors'
Association, a nonprofit corporation that avoids full disclosure of its
donors. "We know, however, that its biggest donors include many Wall
Street financiers--who most certainly do not want to lose the billions
of dollars they are charging Oregon taxpayers for using their own
money," said David Delk, chair of the Oregon Progressive Party.
The
State of Oregon could provide low-interest loans through local credit
unions and community banks for renovation and weatherization of
existing homes. It could provide start-up loans for Oregon's small
businesses, instead of funding Wall Street sharks and spyware makers.
Small
businesses are the organs of Oregon's economy, and community banks and
credit unions are its lifeblood. A State Bank of Oregon could provide
capital at lower cost, enabling them to lower the interest on loans, to
increase lending capacity, and to help entrepreneurs and farmers access
the funds they need to grow our economy.
This
veto illustrates the need for campaign contribution limits in
Oregon. Oregon politicians receive campaign contributions literally in
the millions of dollars. The contributors know what they are
buying. Wall Street financiers and hedge fund operators are buying the
ability to take literally billions of dollars from Oregon taxpayers for
their services that are unnecessary. They charge us taxpayers to invest
State money (in businesses almost entirely outside Oregon) and then
charge us again to borrow back the money (issue bonds).
To get involved in campaign finance reform in Oregon, visit honest-elections.com.
Wall Street's most rewarding investment is its investment in politicians.