Another story incorrectly reported that a $100,000 media campaign urging Cleveland voters to approve the sale of the municipal power company to the Cleveland Electric & Illuminating Co. was funded by CEI. The campaign is being funded by the Cleveland Growth Association, a local business promotion group.
Cleveland's largest bank and private utility company are being scrutinized by The Justice Department for possible antitrust violations in connection with the city's financial problems.
Justice Department spokesman Mark Sheehan confirmed that the department was "looking at the matter in an effort to determine whether or not a formal investigation is called for."
Sheehan acknowledged that Cleveland Mayor Dennis Kucinich had spoken with department officials "on several occasions" to outline his charges that Cleveland Trust, the city's largest bank, and the Cleveland Electric & Illuminating Co., (CEI) the private utility serving 80 percent of Cleveland, have conspired to force the city to sell its municipally owned utility (Muny Light) to CEI.
Kucinich claimed that Cleveland Trust told him it would not reissue credit to the financially strapped city unles such a sale were made, giving CEI a power monopoly in Cleveland.
Kucinich has alleged, however, that Cleveland Trust has a significant financial tie to CEI and would itself profit by such a sale of Muny Light.
Sourced close to the Justice Department probe say the department has been in touch with Kucinich several times during the past month since it began looking into the Cleveland situation.
The Justice Department reportedly is looking for possible violations of Section 1 of the Sherman Antitrust Act, which bars conspiracy, combination or contract in restraint of trade. Withholding credit from the city in an effort to force the sale of Muny Light could be construed as a violation of that act by Cleveland Trust, Kucinich has claimed.
At least two congressional banking oversight committees also have begun to examine the Cleveland situation while at the same time asking the bank regulatory agencies to open their own investigations.
When Cleveland Trust refused to roll over $5 million in city notes last December, Cleveland went into technical default. But the banks in Cleveland have agreed not to call for payment on the debt at least until after next Tuesday's city election, in which voters will decide whether to sell Muny Light and whether to increase the city income tax from 1 to 1.5 percent.
That election has given rise to a heated campaign on both sides. CEI is said to be spending more than $100,000 on television advertising urging city voters to approve a sale.
A committee formed to urge a "no" vote on the sale -- headed by Mayor Kucinich -- is spending at least half that amount on its media advertising.
Two weeks ago, a Washington Post article outlined the many financial and other corporate ties between Cleveland Trust and CEI, as well as other connections the bank has with downtown business interests.