Cleveland Mayor Dennis Kucinich has scheduled several private meetings with banking regulators and members of congressional banking oversight committees today in an effort to get them to investigate alleged irregularities in the role of at least one Cleveland bank in that city's fiscal crisis.
Reached at home in Cleveland last night, Kucinich confirmed that he was planning to be in Washington today, but would not discuss the subject of his meetings or the names of the people he will be seeing.
Informed sources told The Washington Post Kucinich will be meeting with several bank regulators and Reps. Henry Reuss (D-Wis.), chairman of the House Banking Committee, and Benjamin Rosenthal (D-N.Y.), chairman of that committee's subcommittee on commerce, consumer, and monetary affairs.
Accompanying Kucinich on several of his Washington stops will be consumer advocate Ralph Nader, who in an interview last night called Kucinich a "brave, courageous, and determined mayor.
"Kucinich has refused to give in," Nader said. "He is bringing to the public's attention one of the more important issues of our time: who runs our cities? Is it the political goverment duly elected by the people, or the unduly elected corporate government?"
Although Kucinich refused to discuss what specific allegations he is planning to raise, Nader said the bank, Cleveland Trust Co., "is trying to advance its own economic interests against other banks by conditioning its loans to the city on political criteria. It is trying to shake down the city government."
Nader pointed to recent allegations that Cleveland Trust was willing to loan $50 million to the city only on the conditon that the city sell its publicly owned power company, Muny Light -- which serves about 20 percent of Cleveland -- to a private utility, with which the bank reportedly has several ties.
A report in today's editions of the Village Voice revealed, for example, that two members of Cleveland Trust's board of directors are also on the board of the Cleveland Electric Illuminating Co. (CEI) -- the privately held utility that serves the rest of Cleveland and would take over Muny Light in the event of a sale.
In addition, the Voice reported, Cleveland Trust directly controls at least 1.8 percent of CEI's voting stock and manages a significant part of CEI's $140 million pension plan. Other sources say the bank may control even more CEI stock.
Cleveland Trust held one-third of the city's $15 million short-term debt due at the end of last year. Kucinich has said in news reports that Cleveland Trust was the only one of six banks refusing to accept a refinancing plan offered by the mayor.
When Cleveland was facing its fiscal crisis late last year, a city councilman said on television that if the mayor would sign an agreement to sell the Muny power system -- an action urged by the council -- "the chairman of the Cleveland Trust bank has informed the council that his bank will purchase $50 million worth of city bonds."
That councilman, Basil Russo, has since said he misspoke, but Kucinich claims that's the way the deal was presented.
In any case, according to Nader, "a select few people run Cleveland. It is worse than most cities. The only difference is that in Cleveland, they have a mayor who is telling them they can't run city hall."
Brock Weir, Cleveland Trust Co. chairman, could not be reached for comment, but the bank's president, Jerry Jarrett, said it was "questionable" that Cleveland Trust actually "controlled" 1.8 percent of CEI's stock.
Jarrett also denied any improprieties on the part of the bank.