Merrill Lynch Scandal in Springfield Widens…Gabrieli Still Does Nothing To Get House in Order

(An important story. - promoted by David)

This is an update on the ongoing situation with Springfield and Merrill Lynch, which I outlined earlier here http://www.bluemassgroup.com/s… .

Basically, documents unearthed by a State Senator reveal that last fall, after Springfield had already lost millions in Merrill Lynch accounts, the Springfield Treasurer put $55 million in new money with an different firm, but the Control Board Executive Director had him switch the money over to Merrill, where his long-term friend happened to work.

See the somewhat blurry local news story:


Next, the treasurer himself tells his side of the story.  He says that the deal with Merrill Lynch was made because of inside connections, admits that he didn’t fully read an important document, and tells of the new $55 million sent to Merrill Lynch.  More local news:

What is the response of the the powers-that-be in Springfield to the new bombshells?   Executive Director Stephen Lisauskas, as always, refuses to answer or explain- except, of course, to say he did nothing wrong.  The person who is most ultimately responsible in Springfield government, Control Board Chairman Chris Gabrieli, continues to channel Dana Perino and dismiss requests for responsibility and/or answers to basic questions as the “blame game.”

http://www.masslive.com/news/i…

Over a week has passed, and there’s no sign Gabrieli and the Control Board are going to hold their Executive Director responsible or even react to the new revelations in any way.   What’s up with this?  Is it my imagination or is this pretty bad and deserving of more attention- even from the Boston press?  

Here’s some more good Springfield coverage;

http://www.youtube.com/user/Se…

 

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2 Comments . Leave a comment below.
  1. I try not to think about it...

    because what's happening in Springfield is really ugly, inexcusable and, honestly, downright criminal. The people of Springfield not only deserve competent leadership, at this point they deserve justice.

  2. Disappointing

    This is really disappointing because as this continues to grow, it stains the important work that Springfield's FCB has done for the city. Springfield has a rock-solid rainy day fund, and at a time when many other communities are laying off employees (mostly teachers), there is no such talk in Springfield. Things are moving forward in Springfield.

    As a member of the public, it appears to me that the Executive Director of the FCB put loyalty to a friend in front of fiduciary duty to the city. If he was an elected official he would be voted out of office on this issue. If he was a city employee, he would have probably been fired by now. But since he is a state employee, accountable only to the state-appointed FCB, he remains, and information about his conduct is brushed aside.

    The latest allegations, that Lisauskas stepped in and prevented the city's treasurer from pulling money out of Merrill Lynch as losses were occurring, is preposterous. And the fact that Lisauskas did not report this information to the full FCB for several months is at best, pure negligence, and at worst, corruption.

    While it may be inefficient to replace Lisauskas and "break in" a new executive director, since the FCB has only about a year left in town, I think that the seriousness of this issue demands that something be done. I still contend that Lisauskas should face discipline under the state's conflict of interests laws, because he steered a large contract to a personal friend. Unless he disclosed this in writing to the FCB ahead of time, that is a violation of the "appearance of impropriety" clause.

    Gabrielli, more and more, appears to be just trying to wish this goes away. I don't understand why he isn't saying more about it. The issue isn't about the loss (and return) of the $13 million -- it is about a direct report of the FCB steering a large contract to a personal friend, and then later showing favoritism towards that friend when things went south, putting his friendship before the city.

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Fri 31 Oct 1:43 PM