Thursday March 11, 2010

PITTSFIELD — Like spring, the 2010 federal census is just around the corner.

Two days after the federal government sent letters to 120 million households across the country announcing that census forms will begin arriving in the mail next week, local officials gathered at City Hall on Wednesday to reinforce community awareness and participation in the U.S. census.

“We want to make sure that people are aware of it,” said Andrea F. Nuciforo Jr., the Middle Berkshire register of deeds.

Follow this link to the full article…

This article originally ran in The Berkshire Eagle, Op-Ed, Saturday, December 06, 2008.

On Nov. 24, 2006, the day before Thanksgiving, shares in the international banking giant Citigroup closed at 50.31. Citi investors had reason to toast the holiday season. The company had paid tens of millions of dollars in dividends to shareholders, and Citi stock values were riding high on the strength of its retail and investment banking businesses.

But the holiday cheer did not last. Just two years later, on Nov. 21, 2008, Citi shares were trading at 3.77, having lost more than 90 percent of their value. One of the most sophisticated banking conglomerates on earth was facing insolvency.

What happened? Citi’s management chose to make disastrous bets on mortgage- and consumer loan-related securities. Some of these securities, which Citi’s balance sheet carried at a value of some $90 billion in 2006, were effectively worthless by 2008. In most cases, the revenue streams that supported these assets – the periodic loan payments made by millions of borrowers throughout the world – were drying up, making it impossible for Citi to find investors willing to buy these securities.

For many Citi customers, of course, Citi’s distress was little cause for concern. The FDIC provides insurance to all US depositors up to $100,000. But the big guys – institutional investors, wealthy individual depositors, Citi executives and Citi’s trading partners – had a lot to lose. Citi’s shareholders, many of whom are corporate shareholders like insurance companies and hedge funds, began to recognize that their shares could become worthless. Corporate borrowers faced the possibility that Citi would not be able to originate new loans or continue its existing loan agreements.

That’s when the Washington, with the blessing of President Bush, Treasury Secretary Paulson and a compliant Congress, stepped in. As reported by the Wall Street Journal and Marketwatch.com, here is what American taxpayers have agreed to do for Citi.

Citigroup and the government have identified a pool of $306 billion in troubled loan-related assets. Citigroup will absorb the first $29 billion in losses in that portfolio. After that, three government agencies – the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp. – will take on almost all additional losses. The plan would essentially put the government in the position of insuring Citigroup’s balance sheet. Taxpayers will be on the hook if Citigroup’s massive portfolios of mortgage, credit cards, commercial real-estate and big corporate loans continue to sour.

In addition, the Treasury Department also will inject $20 billion of fresh capital into Citigroup. That comes on top of the $25 billion infusion that Citigroup recently received as part of the broader U.S. financial industry bailout. Think about this for a moment: having put up more than $45 billion in cash, American taxpayers could ultimately suffer an additional $270 billion in losses resulting from Citi’s toxic investments. The treasury’s largess in favor of Citi startled even the most jaded and self-interested people on Wall Street.

The government’s rescue of Citi, while notable for its generosity, is more notable for its shortcomings. Simply put, the treasury’s plan does not provide taxpayers with the ownership, management and security that they deserve as Citi’s savior. Here are the top five requirements that the government should have imposed when agreeing to put the taxpayers at risk to save Citi.

• Taxpayers should have an ownership interest in Citi. Unlike any other recent investor, the government did not gain any meaningful ownership interest in Citi or its assets. If ownership is good enough for Alwaleed bin Talal, the wealthy Saudi Prince who obtained preferred shares in Citi in exchange for his $350 million investment last month, it should be good enough for the American taxpayer, who has $300 billion at risk.
• Taxpayers should obtain a collateral interest against Citi’s assets. The government has obtained no collateral against any of Citi’s real estate or securities. This leaves taxpayers vulnerable and unsecured should Citi fall into bankruptcy or insolvency. Whether by agreement with the treasury or by special legislation passed by the Congress, the taxpayers deserve this basic level of protection.
• Taxpayers deserve a vote in the Citi boardroom. Notwithstanding the huge government investment in Citi, taxpayers hold little sway within the company. In fact, the few Citi “shares” that taxpayers get provide no guaranteed dividend, and carry a “non-voting” designation. This should be corrected immediately, again by agreement or by special legislation.
• Taxpayers should demand new management. The government’s most puzzling misstep is its failure to change Citi’s executive ranks. The government did not demand a change in Citi’s governing board, much less seats on the board, in exchange for the taxpayer bailout. Taxpayers, to say nothing of the investing public, deserve a fresh approach to Citi’s problems, free from the myopia that brought Citi to the brink of insolvency.
• Citi must submit to strict and enforceable limitations on executive compensation. The public is understandably suspicious of huge government bailouts for financial titans. Such extraordinary moves can work only if the public trusts that they are necessary to preserve the American economy, and not geared to rewarding poor management. Thus, the government should exact substantial sacrifices from the executives that led Citi into its current crisis.

Citi has reason to give thanks this season because taxpayers stepped in to save the company from insolvency. Now that taxpayers bear the risks associated with Citi’s continued operation, taxpayers deserve the protection and operational clout that comes from being Citi’s saving grace.

Andrea F. Nuciforo Jr. represented the Berkshire, Hampshire & Franklin district in the Massachusetts State Senate from 1997-2007, and served as chairman of the Legislature’s Committee on Financial Services for eight years. He is currently Central Berkshire County registrar of deeds.

This article originally ran in The Boston Business Journal, Friday, September 26, 2003

In nearly six years in the Legislature, Sen. Andrea F. Nuciforo Jr., a Pittsfield Democrat, earned a reputation as a quiet legislator skilled in retail politics and versed in legislative minutiae.

In recent weeks, however, Nuciforo’s visibility has grown after inserting himself into high-stakes probes of brokerages and mutual funds, filing legislation to toughen state securities law.

Now, his proposal has been assailed by the man it was meant to help — Secretary of State William Galvin — leaving the 39-year-old senator, widely believed eyeing a run for Congress, deflecting criticism of political opportunism. But for Nuciforo, filing the legislation was more about doing the right thing than staking a claim to an issue capturing headlines.

“It’s pretty clear to me that there are abuses going on in the securities market that needed to be addressed,” Nuciforo said in an interview in his modest, second-floor State House office. “The DDi situation added fuel to that fire.”

The state pension fund lost $349,000 in DDi Corp., a company in which the state invested after a Lehman Bros. analyst was pressured by bankers at the firm to give the stock a favorable rating. As the state Treasury weighed its legal options, Nuciforo, along with Sen. Jarrett Barrios, a Cambridge Democrat, filed a bill that garnered the support of 17 Beacon Hill colleagues. Galvin, however, came out against the bill the day it was unveiled in August.

“We value his interest, but we think this loosens, not tightens, the law,” Galvin said in an interview with the Boston Business Journal.

The bill would eliminate the requirement that investment fraud be willful, which Nuciforo, a lawyer by education, said would make it easier to make civil and criminal cases stick. Eliot Spitzer, the New York attorney general who has been at the forefront of securities and mutual fund industry probes, has not had to prove willfulness, Nuciforo noted.

But Galvin, whose office has worked closely with Spitzer’s, said the Bay State has “had no difficulty bringing securities cases” under the present law, citing recent investigations into fraud at Morgan Stanley and Prudential Securities.

That might change if Nuciforo and his allies succeed, Galvin said. The Republican Congress, under the guise of seeking uniformity in investment regulation, wants to strip states of their decades-old role overseeing securities and place that authority entirely with the federal government. Nuciforo’s efforts would give ammunition to that cause by signaling that state regulation is inconsistent, Galvin said. It’s a position shared by securities lawyers such as Michael Unger, a lawyer with Boston’s Rubin & Rudman LLP and a former top state securities regulator under Galvin’s predecessor, Michael Connelly.

Nuciforo responded, “It’s a specious argument because not all of the states are in lock-step now.”

The struggle is about political turf, some say, noting Nuciforo’s proposal shifts power away from Galvin and to the attorney general.

“Given Galvin is high-profile, he’s trying to protect what has been an asset to him,” said Lou DiNatale, senior fellow at the McCormack Institute. For Nuciforo, it is a way to take an issue the Legislature certainly would have taken up and making it his own, DiNatale said.

Politics has been part of Nuciforo’s life since childhood. His father, Andrea Sr., was a state senator from 1964 to 1973, before being elevated to a judgeship by Gov. Francis Sargent. The younger Nuciforo won the first race he ever ran, filling the Senate seat vacated by Jane Swift when she challenged U.S. Rep. John Olver in 1996.

“He does a lot of nonsexy things you don’t see a senator do,” said North Adams Mayor John Barrett. As a freshman, Nuciforo pushed through the Senate a $4 million request Barrett said will help North Adams pay for a court-ordered water-filtration plant.

If Nuciforo’s next step is Congress, as is rumored, he would have a leg up not just for his bringing money back to the district but for his ability to straddle consumer and business interests, experts say. Since 1998, Nuciforo has chaired the Senate Banking Committee, taking the pro-consumer stand against mutual banks going public, while siding with banks on automated teller fees and modernizing state bank law.

“I don’t see ourselves as on opposite sides,” said Daniel Forte, president of the Massachusetts Bankers Association. “He has an open-door policy.”

As he moves to protect “mainstream U.S.A. investors,” Nuciforo can expect to be on the opposite side of the aisle from Galvin when his bill is heard by the Legislature in the coming weeks.

“We’ll make our views known,” Galvin said.

Andrea F. Nuciforo, Jr., was elected to the Massachusetts Senate in 1996, and is serving his fifth term. Representing 48 cities and towns in the Berkshire, Hampshire and Franklin District, Sen. Nuciforo has worked to enhance elder services, promote economic development, strengthen public education and protect the environment.

Sen. Nuciforo serves as the Senate Chair of the Joint Committee on Financial Services. He is Vice Chair of the Elder Affairs Committee, and is also a member of the Higher Education, Consumer Protection, and Election Laws Committees.

As Senate Chair of the Financial Services Committee, you are charged with reviewing and acting on various auto insurance proposals. What are some of the reforms you think the Legislature could adopt to make auto insurance work better for consumers?

I believe we can make our auto insurance market more competitive without sacrificing important consumer protections. We need legislation that fights fraud and theft, and reduces the high incidence of traffic accidents in the commonwealth.

We must also fix the so-called residual market (i.e. the place where high-risk drivers get auto insurance) so that all of the auto insurance companies share losses in an equitable way. I do not believe that Massachusetts law should allow insurers to set rates using criteria such as credit history, occupation, marital status and education level.

I’m sure you’re hearing about high energy prices from your constituents. What are you advising them to do to deal with this problem?

In response [to my constituents], I have supported, and the Massachusetts Legislature has passed, a bill providing tax credits and tax deductions to those meeting eligibility requirements—the Home Energy Assistance and Tax Relief Act.

This, along with state and federal programs, such as Citizen Energy Oil and Low Income Home Energy Assistance Program (LIHEAP), will provide temporary relief to those most affected by high costs.

However, this energy crisis calls each of us to re-evaluate how we consume energy. An energy audit can be helpful in recommending improvements that will conserve energy resources and help create a home environment that is efficient. Collectively, each person’s conservation efforts will go a long way to help control energy costs.

And with the Bush administration pushing for policies that favor big, polluting, profitable energy companies, what can the Commonwealth do to get on the track toward a cleaner energy future?

When the Bush administration proposes giving away $7 billion in royalties to the oil and gas industries, as they did in February, we had better take it upon ourselves to address clean energy solutions. Frankly, we missed an opportunity earlier this year when the governor opted out of the Regional Greenhouse Gas Initiative.

Moving forward, we always need to be focused on conservation efforts and should instill this upon our children through educational outreach. We also need to actively engage efficiency programs, as we did recently in the Legislature by passing energy efficiency standards and tax credits, promoting green building design, and instituting a $1 million Fuel Cell Initiative.

Identifying new sources of clean energy is truly a unique opportunity for the United States, and Massachusetts is well positioned to lead that effort.

What are the issues that top your agenda right now at the Statehouse?

I’ve been working closely with my colleagues to provide meaningful health care coverage for all residents of the Commonwealth. I am also focused on securing additional resources for the Brownfield Redevelopment Fund, which has been extremely successful at reviving contaminated sites in cites and towns across Massachusetts. I have also authored a bill to require the state pension fund to divest its holdings from companies that do business with the Sudan. And, as mentioned, I look forward to addressing many of the shortcomings of the auto insurance situation.

What role do groups like MASSPIRG play in the debates about clean energy and consumer protection?

MASSPIRG continues to play an active role in keeping the legislative spotlight on key environmental and consumer issues. My staff and I interact frequently with representatives from MASSPIRG, who provide us with fair and accurate information, which I very much appreciate. The organization has also had tremendous success at mobilizing support on the grassroots level. Like my colleagues, it’s critical to hear from my constituents about their positions on the issues.

Contacts:
Andrew Schuyler, Chief of Staff, Senator Andrea F. Nuciforo, Jr. 617-722-1625
Carol Rose, ACLU of MA, 617-482-3170, ex. 313
Robin L. Rich, League of Women Voters of MA, 617-523-2999
Nancy Talanian, Bill of Rights Defense Committee, 413-582-0110
Katie Baxter, Massachusetts Library Association, (781) 320-7230

Boston – Citizen groups applaud the resolution adopted by the Massachusetts Senate yesterday reaffirming the civil liberties of the people of Massachusetts as set forth in the U.S. Constitution, the Bill of Rights and the Massachusetts Declaration of Rights.

“This is an important statement by our Commonwealth that the people want the government to stop illegal spying on ordinary Americans, the indefinite detention of people without due process, racial and religious profiling, and other government abuses of power,” said Carol Rose, Executive Director of the ACLU of Massachusetts. “We thank the citizen-patriots in the Senate who, through this resolution, have called for the restoration of our Constitutional system of checks and balances.”

Nancy Talanian, director of the Bill of Rights Defense Committee said, “We thank the Massachusetts Senate for affirming the civil rights and liberties of their constituents, as more than 400 state and local governments throughout the nation have done. This makes Massachusetts the ninth state to stand up for the principles that the United States was founded upon.”

Senator Andrea Nuciforo (D-Pittsfield), was the lead sponsor of the resolution, which was adopted yesterday on a voice vote.

“While we must always support the aggressive pursuit of terrorist activities at home and abroad, some of our leaders in Washington feel compelled to pry into the private daily lives of Americans, despite any reasonable cause for doing so,” said Nuciforo. “This resolution puts Massachusetts on record as questioning some of the most offensive provisions of the Patriot Act.”

The resolution will be transmitted to President Bush, Attorney General Gonzales, the U.S. Attorney for Massachusetts Michael Sullivan, all members of the Massachusetts Congressional delegation, and all city and town halls and public libraries in Massachusetts.

“The Massachusetts Libraries Association is pleased with the Massachusetts Senate Resolution Affirming the Civil Rights and Liberties of the People of Massachusetts, as the resolution calls for support for the Bill of Rights and is in accordance with libraries’ commitment to upholding our state law to protect the right of privacy in using libraries,” said MLA President Katie Baxter. “MLA’s long-standing allegiance to principles of intellectual freedom leads the Association to assert the individual’s right to seek information without undue intimidation or interference by the government. The Senate’s resolution both upholds measures to keep America safe and safeguards the very fundamental individual freedoms that allow libraries’ to remain democratic cornerstones for learning, self-improvement, and public good.”

Madhu Sridhar, President of the League of Women Voters of Massachusetts, said: “The League of Women Voters applauds the Legislature for taking action to protect our civil liberties. The Legislature has now affirmed its belief that the state, Congress, the President and all Americans must vigilantly work together to preserve the greatest degree of civil liberty in the fight against terrorism.”

“When it comes to protecting civil liberties, the League of Women Voters is not the new kid on the block,” added Sridhar. “Today, the League is once again involved in this great national debate: What do we gain as a nation if as we strive to protect national security we lose the very liberties that are the foundation of this country?