Springfield City Councilor James Ferrera (pictured) issued a memorandum dated February 11 to Stephen Lisauskas, executive director of the Springfield Finance Control Board, demanding answers to detailed questions regarding how decisions may have led to the city’s $13.9 million investment last spring with Merrill Lynch, which suffered a rapid loss.

More specifically, the memo seeks to probe directly into Lisauskas’s relationship with former Merrill broker Carl Kipper, one of two Albany-based agents who were recently let go. The memo was released mid-day today to members of the media.

At a City Council Finance Committee meeting yesterday on the matter, according to a report in today’s Republican, city solicitor Ed Pikula assured six members of the currently disempowered elected body that a transparent effort is underway to find out if there was any wrongdoing or failure to follow protocol at the city level.

On February 1, Mayor Domenic Sarno held a press conference in his City Hall office, which included Ferrera and a number of other officials, to announce Merrill’s reimbursal to the city of the full $13.9 million. Lisauskas was absent from that event. In his memo, Ferrera takes issue with the absence of Lisauskas at yesterday’s committee meeting. Ferrera previously commented on the air at WAQY regarding his concerns about Lisauskas and the Merrill investment.

The full, unedited text of Ferrera’s memo is below, in which he begins to specify items with the letter a), and then follows with another letter a), and then drops itemization itemizes his concerns (viewable only in certain word processing software). At the end, Ferrera demands a written response to his questions by 2:15 pm on Friday, February 15. He also requests receipts for any meals Lisauskas and Kipper may have shared together.

City of Springfield
Memo

To: Steve Lisauskas
From: James J. Ferrera, III, Vice President, City Council
CC: Control Board Members, Western Massachusetts Delegation
Date: February 11, 2008
Re: Merrill Lynch

After reviewing Docket No. 2008-0001 filed by the Secretary of the Commonwealth Securities Division, I have many serious questions that need to be addressed by you in a timely manner.

First of all I must say that I was very disappointed that you did not take the time to come to a committee hearing of the City Council’s Finance Committee which you were invited to. In order for this City to move forward and in the right direction, we need to have transparency at all level of local government. We cannot run government in a vacuum. We need to open all lines of communications between the FCB and the City Council. After that being said, please respond in writing with details to the following questions:

1.) Describe in detail how and why the Albany Branch of Merrill Lynch was chosen to do business with the City of Springfield and why other local branches of Merrill Lynch were not given the opportunity to give a sales pitch.

2.) a.) Were these investments sent out to bid? Was there an RFP used? If yes, please send a copy of the bid/RFP that was used for these investments.

b.) If no, please state why no RFP was used. Please also send a copy of all the policies and procedures when handling these types of investments with the City.

3.) a.) As stated in the complaint filed by the Secretary of the Commonwealth, please describe your “longstanding friendship” between you and Carl J. Kipper, Vice president, Global Private Client Group for Merrill Lynch.

b.) When/where did you first meet him?

c.) Do you have any personal accounts set-up with him or Merrill Lynch (active or non-active)?

d.) In Exhibit One of the Secretary’s complaint, there is an e-mail from Carl Kipper to slasauskas [at] mindspring.com which states “Steve, thank you. Nice chatting with you this morning and I will give you a call so we can get together for lunch or dinner within the next week or so. Have a great day…” At anytime did you have lunch or dinner with Carl Kipper and if you did, who paid? Please provide receipts.

4.) Please list in detail all the times you worked with Carl J. Kipper in any capacity, when, where and why.

5.) Why did you “orchestrate” the deal between the City and Merrill Lynch when it is the responsibility under state law that the treasurer has the right to invest the money?

6.) As stated in the complaint filed by the Secretary there was a committee formed of four people, you, the Treasurer, the CFO and the Auditor. Was a vote taken by that committee to select Merrill Lynch? If yes please provide me with the results of the vote and if no please indicate why no vote was taken.

7.) Did the Law Department review and approve the contracts with Merrill Lynch and any other investment contracts? Was there any oversight by the City Auditor with regards to these contracts?

Again, please respond in writing by 2/15/08 at 2:15 p.m. You can drop your response off at the City Council Office or feel free to contact me when done. Any questions, please feel free to call me at [----]. Thank you for your time.

This entry was posted on Tuesday, February 12th, 2008 at 2:20 pm and is filed under City Council, Finance, Finance Control Board, Media, Springfield, Urban Compass.