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SAN FRANCISCO – Attorney General Kamala D. Harris, along with the U.S. Department of Justice and the attorneys general of eighteen states and the District of Columbia, on Tuesday announced a settlement with Standard & Poor’s Financial Services LLC (S&P) and its parent company, McGraw-Hill Financial Inc., to resolve federal and state civil claims related to S&P’s conduct in inflating ratings of residential mortgage-backed securities and structured investment vehicle notes.
Combined with a separate settlement also announced today resolving a lawsuit filed by the California Public Employees’ Retirement System (CalPERS), S&P will pay a total of $1.5 billion to federal and state government entities.
The state of California, through Attorney General Harris’ office, will recover $210 million in damages, from which CalPERS and the California State Teachers’ Retirement System (CalSTRS) will receive allocations for their losses on investments of certain S&P-rated securities.
Separately, S&P also will pay CalPERS $125 million to settle CalPERS’ specific lawsuit.
The remainder of the total settlement proceeds will be distributed amongst the U.S. Department of Justice and the other nineteen attorneys general.
“S&P profited by misleading investors who trusted its ratings,” Attorney General Harris said. “California’s public pension funds suffered significant losses due to S&P’s failure to honestly and accurately disclose the risk of the very investments that caused an international economic recession. This settlement holds S&P accountable for financial losses caused by these misrepresentations and compensates our pension funds.”
This settlement is the latest in several resolutions holding responsible the institutions that contributed to the financial crisis. To date, Attorney General Harris has recovered over $900 million for California’s public pension funds.
In August 2014, Attorney General Harris announced a $300 million settlement with Bank of America over its misrepresentations in residential mortgage-backed securities sold to CalPERS and CalSTRS.
Similar settlements were reached in July 2014 with Citigroup Inc. for nearly $200 million and in November 2013 with J.P. Morgan Chase & Co. for $300 million.
An investigation conducted by Attorney General Harris showed that S&P systematically misrepresented to the public, and to CalPERS and CalSTRS, that its ratings of structured finance securities were based on an objective and reliable analysis and not influenced by S&P’s economic interests. Investors relied on these ratings to invest in the structured finance securities, the collapse of which led to the financial crisis.
As part of the settlement, S&P agreed to a statement of facts which indicate that, despite its claims of objectivity and independence, it overruled the recommendations of its ratings experts out of concern that S&P’s business would be harmed if the company did not rate its clients’ securities positively. The settlement does not absolve S&P or its employees from any possible criminal charges.
The settlement with S&P arises from the investigation into mortgage-backed securities by Attorney General Harris’ Mortgage Fraud Strike Force, which was formed in May 2011 to comprehensively investigate misconduct in the mortgage industry.
The attorney general's additional efforts to investigate the mortgage crisis include securing approximately $20 billion for California in the National Mortgage Settlement and sponsoring the California Homeowner Bill of Rights, a package of laws instituting permanent mortgage-related reforms.
For more information on the U.S. Department of Justice settlement, visit: http://www.justice.gov/ .
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SACRAMENTO – North Coast Sen. Mike McGuire introduced bipartisan legislation on Thursday to ensure that the 70 percent of California's students who will not go on to obtain a four-year degree will have a greater opportunity to receive the career and job skills they deserve.
Career technical education programs have suffered from severe cuts in funding, while the importance of the programs have grown due to the state’s rebounding economy.
Sen. McGuire is proud to lead a bipartisan coalition that will ensure that students of California can receive the job and career skills they need to thrive.
The legislation was jointly authored by Sen. Connie M. Leyva and co-authored by Republican Senate Leader Bob Huff, Senators Isadore Hall, Tony Mendoza, Andy Vidak and Ben Allen, and Assemblymembers Bill Dodd, Jim Wood and Autumn Burke.
The legislation – The Career and Job Skills Education Act, or SB 148 – would appropriate $600 million of Prop 98 funds to a career technical education (CTE) incentive grant for local educational agencies, joint power authorities, and regional occupational centers and programs.
“We are at a time when the rapid growth of California’s population and labor force depends on attracting, supporting, and retaining businesses that pay sustainable wages to highly skilled and qualified workers. Improvement in the overall quality of the workforce is a vital component of the economic development of California,” McGuire said.
Career technical education has proven to not only significantly reduce high school dropout rates, but motivate more than 70 percent of high school students who have been involved in CTE programs to pursue higher education shortly after graduation.
The Career and Job Skills Education Act closely mirrors, in language and intent, the CTE incentive matching grant program outlined in the Governor’s 2015-16 budget proposal.
It expands upon that $250 million, using funds from the anticipated billions in growth of Proposition 98 funds.
“For the first time, this is a bill that will ensure funds go directly to CTE programs by requiring rigorous performance standards and accountability measures based on student outcomes,” McGuire added.
In addition, the bill is specifically tailored to districts by preserving the local control funding formula.
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SACRAMENTO – The moratorium for stores to apply for authorization in the California Women, Infants and Children (WIC) program will be lifted effective Feb. 1, Dr. Ron Chapman, California Department of Public Health director and state health officer, announced this week.
“This positive step will improve availability and access for the approximately 1.4 million women, infants and children who participate in the California WIC program,” said Dr. Chapman.
To address rising food costs in the California WIC program, the United States Department of Agriculture in 2012 continued a moratorium on the addition of new vendors into the program so that CDPH and USDA could develop and implement strategies to contain costs and ensure program integrity.
USDA notified CDPH by letter that the moratorium can now be fully lifted.
In June 2014, USDA partially lifted the moratorium to include additional locations for stores that already had a master contract with the WIC program. Since that time, 217 stores have been added to the program.
In September 2014, USDA partially lifted the moratorium to include new full-line grocery stores. Since that time, 24 stores have been added to the program.
It is anticipated that 200 stores will be added statewide after the moratorium is fully lifted. California currently has approximately 4,300 authorized stores that participate in the WIC program.
“USDA and CDPH continue to work together to ensure the strategies now in place are effective in containing food costs and comply with federal regulations and mandates,” said Dr. Chapman.
California WIC provides access to healthy supplemental foods, nutrition education, breastfeeding support, and referrals to health care and community services for the infants, children and pregnant or post-partum women it serves. WIC spends approximately $83 million each month on food.
At the federal level, WIC is administered by the United States Department of Agriculture and California’s WIC Program is administered at the state level by CDPH.
Additional information is available on the cost containment strategies recently implemented at www.cdph.ca.gov .
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NORTHERN CALIFORNIA – AAA Northern California, Nevada & Utah has announced that three Northern California hotels and seven restaurants have been awarded the prestigious AAA Five Diamond Award for 2015, including one first-time recipient.
These establishments represent the upper echelon of hospitality and fine dining.
The AAA Five Diamond lodgings are establishments chosen for providing refined, stylish and upscale physical attributes where guests receive personalized attention from an experienced staff who enhance an extensive array of amenities and services.
The Five Diamond restaurants are chosen for their distinctive culinary experiences that feature highly innovative chefs, handcrafted artisanal menus featuring fresh top-quality ingredients and expert staff.
Northern California AAA Five Diamond Award-winning hotels are:
– The Ritz-Carlton in San Francisco (since 1994).
– The Ritz-Carlton in Truckee, Lake Tahoe (2011).
– Château Du Sureau in Oakhurst (2013).
Northern California AAA Five Diamond Award-winning restaurants are:
– The Restaurant at Meadowood in St. Helena (since 2013).
– Erna’s Elderberry House in Oakhurst (1996).
– The Kitchen Restaurant in Sacramento (2011).
– Benu in San Francisco (2012).
– Gary Danko in San Francisco (2003).
– Saison in San Francisco *(First time-recipient).
– The French Laundry in Yountville (2005).
“Attaining a AAA Five Diamond rating is not an easy undertaking,” said AAA Northern California spokesperson Cynthia Harris. “Establishments at this level must consistently provide an unparalleled guest environment and experience. We are proud to recognize these dedicated local establishments for the Five Diamond rating.”
AAA inspectors visit more than 58,000 hotels and restaurants over the course of the year, allowing them to identify emerging trends in the industry.
Inspectors have observed hotels increasingly using technology to complement the white glove service guests expect at the ultra-luxury level, allowing options such as mobile check-in and touch-screen access to concierge services.
Similarly at restaurants, they have observed the emergence of tablet-based digital menus, with electronic ordering and tableside payment features.
Continuing a 79-year tradition, AAA professionally trained inspectors rely on published guidelines to conduct unannounced property evaluations. AAA inspectors collectively visit some 1,200 hotels and restaurants nationwide each week.