force banks, lawyers, and advisers who helped the city borrow billions in the last decade to pay back millions in fees for financial hedges that went bad?

City Councilman James F. Kenney, a Democrat, has posted a resolution "to hold public hearings investigating the use of qualified-interest-rate-management agreements by the City and School District" and to explore whether it's time to sue banks, lawyers, and financial advisers for recommending investments that made them richer and taxpayers poorer.

In his proposal, Kenney cites the multimillion-dollar payouts the city and the School District of Philadelphia have had to make as a result of interest-rate-swap contracts in connection with city bond sales from 2003 to 2008. Swaps sellers said the contracts would protect the city from rising interest rates. But when U.S. interest rates fell, deal terms obliged the city to pay banks and their investors.

Kenney also cites state Auditor General Jack Wagner's 2009 report calling for a municipal swaps ban and the labor-backed Pennsylvania Budget and Policy Center's recent report estimating current and future swaps losses to the city at $330 million.

The center says the banks that sold the swaps should refund the city's losses. But Kenney sees no reason that an investigation should stop there.

He also wants testimony from the Pennsylvania law firms and financial advisers who recommended swaps after the Clinton administration (in 2000) and former Gov. Ed Rendell (in 2003) passed pro-Wall Street laws making swap sales to towns a lot easier.

I noted that School District finance chief Michael Masch and Nancy Winkler, the former Public Financial Management bond adviser who now oversees the city's finances, have disputed Wagner's and the center's estimates of the size of the city's net swaps losses - though they have not supplied their own complete analyses.

Kenney says it's still worth documenting who gained from the city's losses - and maybe trying to get some of it back.

His call for hearings comes two months after CDR Financial Products Inc. and its founder, swaps salesman David Rubin, pleaded guilty to federal criminal fraud and conspiracy charges in a municipal-finance bid-rigging case in New York.

CDR was also active in Pennsylvania, where Rubin donated to key politicians and served on one of Rendell's transition teams. Among its other duties, CDR advised the state on interest-rate swaps.

Parking union

Standard Parking Corp.

, a publicly traded company based in Chicago, will pay $27 million in cash over a three-year period, plus Standard shares worth $110 million at recent prices, and will assume $210 million in acquired debt to buy Nashville-based

Central Parking Corp.


Lubert-Adler Partners L.P.


Versa Capital Management L.L.P.

, and

Kohlberg & Co.

, Central's major owners.

Central manages at least 45 parking garages in Center City and other local business districts, and more than 2,000 nationwide. The combined companies will employ more than 20,000 and manage more than two million U.S. parking spaces. Standard runs lots for Transit of New Jersey and other public agencies across the United States.

The Lubert-Adler and Versa funds are both based in University City and backed by Philadelphia real estate and casino investor Ira Lubert; both funds' investors include the $25 billion-asset Pennsylvania State Employees' Retirement System. The Philadelphia-based law firm Klehr, Harrison, Harvey, Branzburg L.L.P. advised Lubert-Adler on the deal.

A consortium of banks led by Bank of America Merrill Lynch is lending up to $450 million to finance the deal. Standard boss James Wilhelm said in a statement that he hoped to chop "at least $20 million" from the companies' expenses as the deal closes, including a "headcount reduction" of "less than 2 percent."