Monday, October 20, 2008

Hartford Insurance...Need or Greed...Pt. 2

Anonymous left a comment on our previous blog:
Did anyone bother to find out if the Hartford would have stayed or left the area if the new deal was not reached?

Why did they want to abandon a perfectly good building on Middlesettlement Rd?

Does anyone know?
Concerned Citizens is trying to figure that out. We even spoke to County Legislator Jim D'Onofrio, who represents part of New Hartford, about our "idea" as to what was going on. However, he really couldn't offer any insight; in fact, he kept saying he was unaware of most of the information we shared with him in our meeting and the information he had conflicted with what we knew to be true. Either he is a great actor or someone has been feeding him a lot of misinformation. Course, it could be that he has been in politics for so long he is starting to forget who it is that elected him to office! Makes a good argument for "term limits"!

At any rate, when Peter Zawko from Mohawk Valley EDGE attended the October 1, 2008 Town of New Hartford Board Meeting to ask the Town Board to pass a resolution to "shift" some Empire Zone credits from one parcel to another parcel adjacent to the New Hartford Business Park, the pieces of the puzzle started to fit together.

After that board meeting, Concerned Citizens tried FOILing some documents from Mohawk Valley EDGE. Peter Zawko, Vice President of Mohawk Valley EDGE wrote to us in response to our FOIL request stating that:
“EDGE is a New York not-for-profit corporation, managed by a Board of Directors comprised entirely of private individuals…none of the voting directors or members of MV EDGE is a government official, appointed by a government official or government entity, or subject to removal by a government official or government entity, Mohawk Valley EDGE has long taken the position that it is not an “agency” within the meaning of the New York Freedom of Information Law and, therefore, has no responsibility to comply with it.” copy of letter received from Mr. Zawko.
According to Mr. Zawko’s letter:
“Mohawk Valley EDGE has decided, in this instance, to voluntarily respond to your FOIL Request.” “Bearing in mind that we are voluntarily responding to your FOIL request, you may inspect the records at our office during our regular business hours”.
Mr. Zawko also gave us the option of paying $45.00 for copies.

Got news for you Mr. Zawko, we spoke to RoAnn Destito and she seems to disagree with you…isn’t her husband on the Mohawk Valley EDGE Board of Directors? Robert Freeman, Executive Director of the Committee on Open Government also seems to disagree with you. Your records are FOILable and the FOI Law allows for electronic transmission of documents. Given the fact that an Article 78 can be filed, your Board of Directors might want to re-think their position.

In the meantime, we visited the Town Clerk’s office and picked up a copy of the resolution Mr. Zawko presented at the October 1, 2008 board meeting. Mr. Zawko wanted the town board to pass the resolution, the first step in the “shift” of Empire Zone credits; however, too many questions were asked by Concerned Citizens at the board meeting upsetting Town Supervisor Earle Reed and the resolution was tabled for the next meeting.

In our next blog, we are going to take a look at what appears to be going on. Stay tuned…

7 comments:

Anonymous said...

Have you guys seen the clearing that the NH Business Park developer has done recently?? Obviously they are getting ready to tie into the eventual intersection with Rte 840! Also, have you checked to see if they have obtained the necessary permits from the DEC to do this clearing?? They need a State Pollutant Discharge Elimination System (SPDES)permit which requires a Stormwater Pollution Prevention Plan (SWPPP).

I'm guessing the shift for Empire zone credits was because the Hartford was built on property adjacent to and outside of the original NH Business Park boundary and never was included in the Empire Zone. Am I right?

Anonymous said...

Also, it receives a lot of money from the state and county. That's a dead giveaway that it is an agency as the FOIL law intended rather than a truly private entity.

Anonymous said...

i don't know if it was "the" reason for moving, but while walking out at quitting time, we often smell a foul-toxic smelling smoke coming from Special Metals, we certainly won't miss that!

Anonymous said...

How could they close Woods Hwy without prior notice. There was a small clip in the OD as they were putting up the "Road Closed" signs. Nice New Hartford, thanks for the warning. The OD had published Henderson St was going to be closed a week before any work started. I guess it's all about Larry!

I'll bet Hartford employees were given prior notification of this.

Anonymous said...

Did anyone notice the small article in the NY Post about the Hartford Ins buying up s few of the loan companies? This was in about 2 weeks ago. It named the Hartford as one of those who will make theselves eligable for billions of taxpayer funded money because of these acquisitions. I did not see this mentioned anyplace else. I will try to find it again.

Anonymous said...

Here it is I found a similar article in the USA today. Seems like the billions they may recieve the can afford their own bridge. And, this is the same company that can't afford to pay its fair share of the taxes...please read the last paragraph. I would say greed is in order.


4 insurers seek to buy thrifts for part of bailout
Posted 11/14/2008 6:01 PM | Comment | Recommend E-mail | Save | Print |


By Marcy Gordon, AP Business Writer
WASHINGTON — Four insurance companies on Friday asked the government to allow them to buy thrifts so they can qualify to receive federal money under the financial rescue program.
Hartford Financial Services Group Inc., Genworth Financial Inc., Lincoln National Corp. and Aegon NV, a Dutch company that owns U.S. insurer Transamerica, each asked the Office of Thrift Supervision for permission to acquire an existing savings and loan.

The deadline for filing applications was Friday. The Treasury Department agency said it received submissions from those four firms to become thrift holding companies by acquiring savings and loans.

Insurers that own thrifts, which are federally regulated, are eligible to apply for a piece of the $250 billion the government is spending to buy shares in banks and other financial companies. Thrifts differ from banks in that, by law, they must have at least 65 percent of their lending in consumer loans such as mortgages.

Hartford Financial said it expects to be eligible for between $1.1 billion and $3.4 billion in government bailout money

Anonymous said...

And another...

Troubled Orlando-area bank is big prize for Hartford in bailout deal
Sat. November 22, 2008; Posted: 01:16 PM
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Nov 22, 2008 (The Orlando Sentinel - McClatchy-Tribune Information Services via COMTEX) -- FDTR | Quote | Chart | News | PowerRating -- The Hartford, a longtime giant of the insurance industry, is making a run at some serious government-bailout money, and its gateway to billions of dollars runs through a small, troubled savings and loan in Central Florida.
The Hartford Financial Services Group Inc. has launched a $10 million bid to buy Sanford-based Federal Trust Corp. -- holding company of Federal Trust Bank -- in an attempt to tap into the government's $700 billion financial-bailout program.

Hartford joined other big insurers such as MetLife, Prudential, Lincoln and Genworth that want to acquire financially shaky small banks as conduit to obtain government assistance during the financial crisis. Insurers themselves are facing billions of dollars of losses because of exposure to investments whose values are plummeting.

If they are successful, big insurers could end up securing billions of dollars in aid for mere millions of dollars in buy-in costs to acquire banks that are on the skids.

Hartford has offered about $10 million for Federal Trust. That equals $1 a share for the only publicly traded financial institution based in Metro Orlando. The bank's shares traded above $10 in 2007 but fell as low as 20 cents this year amid its financial woes. Many of its investors clearly would take a bath in the deal.

But for Hartford, it appears to be an incredible bargain.

"They're getting Federal Trust for a song," said Greg McBride, senior financial analyst for Bankrate Inc., a consumer-finance-research company. "When I first saw the figure, I was just struck by what a rock-bottom price that it appeared to be."

Hartford is seeking anywhere from about $1 billion to $3.4 billion of the bailout cash, which it can't receive if it doesn't own a bank. But if Hartford's bailout petition is rejected by the U.S. Treasury Department, it will drop its bid for Federal Trust, which would leave the thrift still struggling.

"We are taking these actions as a strong, well-capitalized financial institution looking for maximum flexibility and stability," said CEO Ramani Ayer of Hartford, which posted 2007 revenues of $27 billion.

On the backs of taxpayers

The entire deal poses a quandary for taxpayers -- much like the bailout itself, said James Gilkeson, a former federal banking regulator and finance professor at the University of Central Florida. It would pull Federal Trust out of the fire and support lending in the local economy -- but all on the taxpayers' dime.

"You can say that Federal Trust is being acquired in a way that means no loss to the deposit-insurance system," Gilkeson said. "But if we have to give Hartford more than $1 billion from taxpayers, well, someone is paying a whole lot for that."

Its capital dwindling, Federal Trust scrambled to raise money earlier this year through an unsuccessful stock offering and more recently through unsuccessful acquisition talks with private-equity firms.

Then came The Hartford, which worked with federal regulators to identify the Sanford-based thrift as an acquisition candidate. With assets of $631 million and deposits of $433 million, Federal Trust is the 16th-largest financial institution in Central Florida. It has 11 branches across the six-county region.

But Hartford will face big challenges getting Federal Trust back in shape. The thrift has lost more than $21 million since early 2007, and regulators sanctioned it earlier this year for shoddy lending practices during the housing boom. Its former CEO, James V. Suskiewich, was ousted last fall.

Federal Trust's new managers hope the Hartford deal will right the ship.

"With the renewed strength from this additional capital, we will be able to serve our customers as a strong, financially viable institution," CEO Dennis Ward said.

'I'm in safe territory'

There is at least one big fan of the pending buyout of Federal Trust. Jack Ebbess says he can rest a little easier now.

The 89-year-old retiree, who lives in Altamonte Springs, decided to keep his savings at Federal Trust this year, though the thrift was sick, with millions of dollars in losses from bad real-estate loans.

"I have had a few sleepless nights over it," he said. "But I resolved myself to the fact that the FDIC [Federal Deposit Insurance Corp.] would cover me and I'd get my money back if something happened. Now, I think this Hartford deal is wonderful. I'm in safe territory."

For Ebbess and banking customers in general, confidence in the system is the main dividend so far from the bailout. If nothing else, it has bolstered their feeling that money in the bank is safe.

But the cost of that confidence keeps getting bigger as more players -- from insurers and automakers to municipal-transit agencies -- line up for cash.

"Yes, the bailout is shoring up the banking system and keeping the FDIC from incurring massive losses," said Gilkeson, the former regulator. "But as this thing keeps getting extended, the taxpayers are taking it on the chin big-time."

Richard Burnett can be reached at rburnett@orlandosentinel.com or 407-420-5256.

To see more of The Orlando Sentinel or to subscribe to the newspaper, go to http://www.OrlandoSentinel.com. Copyright (c) 2008, The Orlando Sentinel, Fla. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

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