In his op-ed (“A public bank for Santa Fe? It’s too expensive,” June 12), Jim Lodes suggested that instead of establishing a public bank, Santa Fe could earn better interest investing in New Mexico’s State Investment Council fund. He’s right that Santa Fe doesn’t invest in the SIC fund. That’s because city policy prohibits investments in “derivative instruments, collateralized mortgage obligations or equity securities” and “investment purchases on margin or short sale,” and the SIC invests in both derivatives and hedge funds.
Meanwhile, in April, The Associated Press reported on the $90 million 2008 State Investment Council loss in the pay-to-play scheme involving an investment in collateralized mortgage obligations. Gov. Susana Martinez, chairwoman of the Investment Council, now recommends taxpayers accept a $24 million settlement from the outfit that sold those dodgy derivatives in the first place, and with it, a $66 million loss. Maybe Santa Fe does need a public bank free from political meddling after all.
