Worcester County Freedom Trail

Does anyone find it odd that Governor Deval Patrick is a former Managing Director of UBS bank and the state has just manage to wrangle nearly $50 million in reparations from UBS for questionable selling practices?

According to the Wall Street Journal:

UBS AG will pay $4.4 million to resolve allegations by Massachusetts that the Swiss bank misled cities and government agencies into investing in auction-rate securities.

Massachusetts Attorney General Martha Coakley alleged that a local broker working for UBS misled cities and government agencies into thinking that such securities were as liquid as cash, a legal requirement for government investments in Massachusetts. But early this year, the market for auction-rate securities dried up, and the cities were stuck holding long-term debt.

Of the $4.4 million, $1 million will go to the state for fees and to educate government officials about appropriate investments for their money. The remaining $3.4 million will let Massachusetts cities and agencies redeem the full value of their securities from UBS, Ms. Coakley said.

The payments bring to $41.3 million the total amount UBS has paid to Massachusetts, after a $37 million partial settlement in May. The bank didn’t admit or deny wrongdoing in the settlement, which it said “represents the final step in the resolution of this matter with the Massachusetts attorney general.”

Good news on the same day voter registration, bad news on bailing out the Mass Turnpike Authority. This from the Worcester Telegram on the last minute push to finalize the 2009 state budget:

Bills to allow Election Day voter registration, reform the state’s criminal offender records system and scale back mandatory sentencing laws for illegal drug sales near schools died without final action last night as the Legislature wound up its final session for the year.

In a late surge of bill bargaining and rushed voting yesterday before starting a five-month hiatus, House and Senate members approved $11 billion in new borrowing, expanded use of electronic medical records and a bailout for the Massachusetts Turnpike Authority’s costly financing problems.

The pace of votes quickened throughout the day as lawmakers faced a midnight deadline to end their final scheduled formal session of a two-year legislative session, but actually worked beyond that deadline. They restored more than $60 million in spending on social services and county jail and local project funding as they overturned about half of the $122 million in spending vetoed by the governor from the state budget.

And after weeks of wrangling over what to do about the financial crisis at the Turnpike Authority, House and Senate leaders in the final minutes of the session agreed to a plan to have the state back a significant portion of the $2.5 billion in Massachusetts Turnpike Big Dig debt.

That credit backing is expected to allow the agency to refinance at least $800 million in debt now tied up in an expensive derivative finance agreement that is costing the agency almost $1 million in special finance fees each month. Those fees are expected to rise to $2.3 million monthly in September, unless the authority finds a way to refinance the debt and get out of the costly derivative agreements with UBS.