Louisiana bans banking giant from making bond deal over gun policy
BATON ROUGE, Louisiana (AP) – Officials in Louisiana on Thursday barred banking giant JP Morgan Chase from participating in a bond refinancing deal, amid growing Republicans’ efforts to keep some large investment firms in the state labor gap as they limit business with gun manufacturers.
The State Bond Commission unanimously chose Wells Fargo to refinance the $ 700 million loan debt to get the state a better interest rate and lower cost of repayment, the company financial services collecting fees on the job.
JP Morgan Chase and Co. initially offered a better deal. But Treasurer John Schroder and Attorney General Jeff Landry – both members of the Bond Commission – have raised objections due to the company’s gun policy.
“I am not selling our 2nd Amendment rights to American companies,” said Schroder, a Republican who is considering a possible 2023 gubernatorial candidacy and chairman of the committee.
JP Morgan CEO Jamie Dimon told Congress that the investment banker does not deal with manufacturers of “military style weapons for civilian use.” But the company said its customers can use JP Morgan’s financial products to purchase these types of weapons.
Although the administration of Democratic Gov. John Bel Edwards agreed to choose Wells Fargo for the refinancing job, the governor’s senior lawyer, Matthew Block, said it was bad policy to disqualify JP Morgan for a private business decision. unrelated to work in Louisiana.
Refinancing gasoline and fuel tax obligations is expected to save the state approximately $ 40 million. According to Lela Folse, director of the Bond Commission, Wells Fargo lowered its fee rate to match what JP Morgan was proposing, so the deal won’t cost more by choosing one over the other.
But Block said sidelining JP Morgan and two other of the nation’s biggest banks in earlier funding deals would reduce competition for such work in future deals and could cost the country more money. ‘State because fewer investment firms will compete.
“We’re telling the world … three of the biggest banks lend us money at a good interest rate, we don’t want to do business with them. What we’re going to end up with is the savings and the loan of Joe who will be the one we have to deal with at the end of this, ”Block said.
“It will cost us more money in the long run,” he said.
The Bond Commission previously refused to allow Citigroup and Bank of America to work as underwriters on an interstate highway financing deal because they had policies restricting the sale and manufacture of weapons by their customers. commercial.
JP Morgan declined to comment on Thursday’s Bond Commission decision.
Schroder said the three banking giants could still work on competitively-bid Louisiana loan deals, even if they were excluded from other types of financing deals.
He noted that lawmakers passed a bill to prevent companies from also being eligible for bidding contracts because they restrict business with the gun industry, but Edwards opposed his veto the measure. Texas enacted a similar law.
Even though Schroder and Landry were on the same side of the gun issue, part of Thursday’s discussion involved a difficult exchange between the treasurer and the attorney general over how Schroder’s office handled the refinancing work. . Landry is another potential GOP candidate in the race for governor, so the two could be fighting each other in two years.
Landry said his office and others were not kept abreast of some of the behind-the-scenes refinancing conversations. He accused Schroder of not being transparent about the process.
“These issues are being dealt with in the dark,” the attorney general said.
Schroder took this as complaints against his staff, defended the performance of his workers, and suggested that Landry was largely absent from his role on the Bond Commission, spreading grievances on social media rather than speaking with officials. involved.
“Don’t come here and shoot the staff,” Schroder told Landry.