South Philly Review

An Open Letter to Citizens’ Alliance for Better Neighborhoods Interim Conservator Paul Levy:

In April, when Attorney General Tom Corbett announced his lawsuit against Citizens’ Alliance, representatives from over a dozen nonprofits formed an ad-hoc committee to plead with the Attorney General to preserve assets of the organization for the good of the community.

Serving on this committee are representatives from organizations serving a broad spectrum of community services, including civic associations, youth organizations, women’s advocacy groups and programs for the handicapped. The organizations represented run long-standing, well-recognized programs for their constituencies.

News reports at the time indicated potential options ranged from complete liquidation of Citizens’ Alliance assets to less drastic measures, such as the selection of a new board of directors. Very quickly our group agreed it was imperative to convey to the Attorney General our belief the liquidation and redistribution of Citizens’ Alliance’s assets would constitute a disservice, not only to the communities that benefitted from its programs, but to the communities in the service area that, over the years, had been denied access to its resources.

We are encouraged by your selection as conservator of Citizens’ Alliance given your familiarity with the needs of the communities Citizens’ Alliance resources were intended to serve, and your knowledge of the difficulties our organizations and other organizations like ours now face in these difficult economic times.

While there is no mention of it in the consent decree made public, we would hope it is within your purview, and is in fact your intention, to seek community input into the decisions you must make with regard to the disposition of Citizens’ Alliance resources.

Additionally, it is our hope that it is your intention and the intention of the court to restore the governance of Citizens’ Alliance to a board of directors truly representing the interest and needs of the communities Citizens’ Alliance was established to serve, and further, this new board will function in a manner transparent and responsive to the needs of the target communities.

At the outset of the formation of our ad-hoc committee, which we purposely kept small but diverse, we agreed at the appropriate time we would undertake efforts to contact all nonprofit service providers in the area seeking input and ideas for running Citizens’ Alliance. An idea that has come up in our discussions would be the calling of a meeting, at the appropriate time, of the 100 or so nonprofits in the service area to discuss and seek nominations for the new board of directors.

To these ends, we are hopeful you will consider an informal meeting with our group when time allows to hear our concerns and ideas for the important job you have undertaken.

Bank on it

To the Editor:

It is wise to review what happened to bring about the loss of homes and jobs for millions of Americans. The alleged red-lining, or denial, of mortgage loans to low-income home-buyers in the late 1970s was the reason given for the federal government to muscle banks and mortgages companies to loosen their requirements for applicants.

In the ’90s, stronger measures were applied by the government and it created Fannie Mae and Freddie Mac, in part, to assure the banks they would be relieved of what would become toxic or troubled assets due to government requirements for mortgages.

As more people were qualified to buy houses, demand increased and the costs of houses went up. Rowhouses that sold for $30,000 in ’86 sold for $100,000 in 2006. The natural bust in the housing boom was accompanied by billions in toxic assets of sub-prime mortgages. Fannie Mae and Freddie Mac, even with an injection of hundreds of billions of dollars, could not buy enough of these to maintain the health of the banks.

Insurers, like AIG, and Wall Street speculators contracted derivatives (exchange of payments for the risk associated with sub-prime mortgages) to an enormous degree.

The Treasury allegedly feared banks would panic and stop moving money. The government — finally alerted — alarmed and dumped the crisis on the public, demanding a $700 billion tax, borrow and print bailout or the world would come to an end.

The suffering Americans are experiencing today is the outcome of government intervention in banks.