Some Wisconsin schools say they should get bailout money, normally reserved for banks. Five Wisconsin School Districts in Kenosha, Whitefish Bay, Waukesha, Kimberly, and West Allis-West Milwaukee claim they were duped by two banks who sold them risky investments in collateral debt obligations.
After losing $200 million in the 2006 transaction, they're asking for federal TARP funds, which are normally prescribed for bank bailouts. Joe Kiriaki, Executive Director of the Kenosha Education Association says the debt obligations were the same ones that insurance giant AIG got off the hook for, He says in the "scheme" the districts became part of both the banking and insurance system.
The union leader also says the request of $200 million is "a drop in the bucket" compared to the hundreds of trillions in total bailout plans.
The five districts have also sued the two banks to recover their money. Kiriaki believes if the districts are successful in the suit, they should give the bailout cash back. He says the government has a much better chance of recouping their money that way than that with AIG. The case has been legally tied up in determining which echelon of courts needs to hear it. Kiriaki expects the federal court to make a decision soon whether the case should be sent back to the state level court.