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Dent robo-call blames Callahan for lost bond savings

Congressman Charlie Dent (R-15) continues to go directly after Democratic challenger John Callahan’s legacy as Bethlehem mayor, using a new robo-call to resurrect a six-year-old bond refinancing on which the city lost more than $1.5 million worth of potential savings.

The issue is incredibly complex, and in the robo-call, Dent’s campaign seeks to blame Callahan for the lost savings, and for allegedly steering work to a preferred financial firm. But Dent’s campaign attack omits key facts, and the historical record is far from clear on the matter. At the time, the bond refinancing for the city’s water authority became so contentious that the District Attorney briefly investigated, though no one was ever formally accused of any wrongdoing.

The saga began when the Bethlehem Authority, the independent water agency, was in the midst of a bond refinancing in 2003. Though an independent agency, its loans were guaranteed by the city, and Callahan, having only recently came into office in 2004, raised questions as to why Merrill Lynch, then one of the state’s largest bond underwriters, hadn’t been involved in a competitive bidding process. That briefly put the brakes on the process and created tensions between Callahan and other city officials.

Merrill Lynch later came forward with a bid that would have saved the city more money than any other firm, according to a bidding document from July of 2004. News reports from the time indicate that it was the water authority, not Callahan, that rejected that bid. And by the time the dust settled, the bond market had changed and some of the savings were lost (in a touch of irony, an article written by Dent’s own campaign spokesman, then a reporter for the The Express-Times, slightly undercuts Dent’s current claim in reporting that the authority, citing previous news reports that raised questions, was responsible the delay that cost Bethlehem significant savings).

At the time, Callahan was criticized for bringing Merrill Lynch into the picture, and critics noted that that firm employed a broker who was friends with a Callahan adviser—a connection that never amounted to more than complaints recorded in the official minutes of meetings and in quotes to reporters.

Still, the latest robo-call underscores that Dent is willing to challenge Callahan on local issues, and to try to turn back Callahan’s criticism of the incumbent as tied to Wall Street.

“The truth is Callahan interfered with an independent authority’s bond refinancing so he could push a bid by his friends at Wall Street firm Merrill Lynch,” a narrator says in the call. “Because of Callahan’s intervention the city lost the opportunity to save taxpayers more than $1.5 million. John Callahan put his Wall Street friends ahead of taxpayers.”

In a statement, Callahan campaign manager Justin Schall said the mayor was just doing his job.

“This is a factually inaccurate attempt by Congressman Dent to distract voters from the real issue in Congress happening right now,” Schall told pa2010.com. “Mayor Callahan made a financially responsible decision to carefully review a $66 million dollar bond, that’s his job. Meanwhile in Washington Dent has taken over $300,000 from financial special interests, but he refuses vote for Wall Street reform to end taxpayer funded bailouts. I know Congressman Dent is a career politician, but enough of the silly Washington double talk.”

Click her to listen to the robo-call.

June 9, 2010 at 5:03 pm

--Dan Hirschhorn

Tags: Charlie Dent, John Callahan, PA-15

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