Republicans are taking ethics shots at Sen. Michael Bennet late in the close race for U.S. Senate, saying Bennet had a conflict of interest while Denver schools chief by holding JP Morgan Chase stock while backing a complex pension deal that saw DPS pay the firm $1 million.


"Michael Bennet needs to tell Coloradans why he pushed through such a risky deal, without disclosing the fact that he had thousands and thousands of dollars invested in JP Morgan," John Swartout, campaign manager for the Republican Buck, said earlier this week.


"Another shameless, factually inaccurate attack from Ken Buck falls flat and only calls into questions his past," said Bennet spokesman Trevor Kincaid. "Buck is the only candidate in this race who has been ordered by a judge to take ethics classes and was condemned by his peers for misconduct."

Bennet's campaign said his stock picks were made by a financial manager and that he ended up losing money on his JP Morgan stock when the advisor sold off assets as the Democrat joined the Senate.

Asset disclosures required by the U.S. Senate show Bennet sold JP Morgan along with many other holdings in January 2009; at that time, his JP Morgan holdings were worth between $50,000 and $100,000.


From the April 2008 DPS pension deal to the time of Bennet's stock sales, the price of JP Morgan Chase stock fell from about $45 a share to about $25 a share.

Bennet and current DPS officials have said JP Morgan and other firms involved in the pension refinancing were chosen by competitive bid, and that Bennet did not have a role in picking the firms.

School board member Bruce Hoyt, a supporter of Bennet who is in the securities business, said any Bennet holdings or DPS fees paid to Wall Street would have been so tiny compared to Morgan's $67 billion in 2008 revenue that the relatively small amount of stock was "less than immaterial," and a "non-issue."

A Denver Public Schools spokesman said the district does not know whether Bennet disclosed his JP Morgan holdings at the time. But the district consulted with inside and outside counsel last week, and those attorneys say such disclosures weren't necessary in this case.


Standing DPS policy on disclosures references state ethics rules, which include language defining "financial interest" as "a substantial interest held by an individual."

JP Morgan received $1 million for its bond work in 2008, and Citigroup $551,000 as a co-underwriter for DPS. DPS officials said they fielded seven competitive bids for the underwriting spots, and hired an independent consultant in Royal Bank of Canada to narrow the field. Bennet did not have any decision-making role in choosing the bond firms, those officials said.

The state GOP pushed the story againtoday, blasting Bennet for the DPS pension deal and for failing to disclose the JP Morgan stock.


And Swartout, with Buck's campaign, pointed to contributions JP Morgan's PAC made to Bennet.



Two donations of $1,000 each from a JP Morgan political action committee to the Bennet campaign do appear on the PAC's disclosures with the Federal Election Commission. Those donations were canceled out, though, in August 2010, according to the FEC records. The Bennet campaign said it never received any money from the PAC. The JP Morgan Chase PAC office in Chicago did not return a phone call seeking comment.





With the new debt, Bennet, then-chief operating officer Tom Boasberg (now superintendent), and bond advisors agreed to complex financing terms. The interest rates DPS paid would change periodically, similar to an adjustable home mortgage. But the rates would be reset during bidding periods from bond firms, and during the 2008 crisis on Wall Street, DPS at first paid more interest than it had predicted.


The current chief operating officer, David Suppes, has said in the last fiscal year DPS saved $18.6 million from what its costs would have been without the refinancing.

Michael Booth: 303-954-1686 or