BATON ROUGE, La. (AP) — Gov. John Bel Edwards’ administration accused Louisiana’s treasurer and other state leaders Thursday of sidelining one of the nation’s largest banks from working on multimillion-dollar state borrowing deals because of the bank’s firearm restriction policies for corporate customers.
At the urging of Treasurer John Schroder, the Bond Commission — a key state panel that oversees taxpayer-financed borrowing deals — selected eight banks to be given favored status in competing to handle Louisiana’s largest bond sales for up to three years. The list excluded Citigroup, which came in ninth in a scoring process, from the financial underwriting work.
The Edwards administration accused Schroder and others of rigging the scoring process to drop Citigroup’s ranking and to pick just enough banks to exclude Citigroup from the list, because of their objections to the financial giant’s gun control policies.
“We certainly know your feelings (about Citigroup),” Edwards’ chief lawyer Matthew Block told Schroder at the Bond Commission meeting. “If that’s how we’re going to decide this, then let’s just do it honestly and transparently.”
Schroder, chairman of the Bond Commission, objected to the accusations from Block and Commissioner of Administration Jay Dardenne, saying the scoring process was fair.
“You said it’s based on politics. That’s not true. That’s not the case at all. You don’t know how I scored,” the treasurer told Dardenne. “It was done fairly and openly. There’s no tricks to this.”
In 2018, Citigroup announced it was ending relationships with retail clients that sell guns to people who haven’t passed a background check, that sell rapid-fire devices known as bump stocks and high-capacity magazines and that don’t enact gun sale restrictions to people under 21.
In response, Schroder, Attorney General Jeff Landry and other Republican officials previously have sought to ban Citigroup — and a second bank with similar policies — from involvement in bond sales, accusing the banking giant of violating Second Amendment rights. The Democratic Edwards administration argued the gun restriction policies had nothing to do with bond sales and all banks should be able to compete for the financial work so the state can get the best deal for the work.
To assemble the favored underwriter list, six people scored the banks — representing the treasurer’s office, the attorney general’s office, the governor’s Division of Administration, the transportation department, the House speaker and the Senate president.
“Three of the graders scored Citigroup extremely low, and when the question was asked why, the answer was politics,” Dardenne said.
The treasurer’s office didn’t immediately release the scoring information. Schroder didn’t directly say if he gave Citigroup a poor score, though he called it an “individual decision” and said he didn’t try to influence other scorers.
Dardenne sought to have a 10-member pool of favored banks that would include Citigroup, but Schroder objected. The Bond Commission — a panel of legislative leaders, statewide elected officials and members of the governor’s administration — voted 11-2 against Dardenne’s proposal, with Dardenne and Block the only two panel members supporting the idea. Schroder, Landry’s chief deputy, Republican lawmakers and the other GOP members of the commission opposed the idea.
Citigroup didn’t immediately respond Thursday to a request for comment about the Bond Commission action.
Louisiana hasn’t used a favored list for bond work in prior deals. The state’s financial adviser, Renee Boicourt with Lamont Financial Services Corp., said other states use the approach to help make financial deals quickly and take advantage of favorable market conditions without having to start a new public solicitation process for each transaction.
When questioned, Boicourt described Citigroup as a “very well-qualified firm, a very dominant player in the industry” that would “bring value if they were included” in the state’s list.
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