The letter from [Attorney General Robert J.] Spagnoletti and [Chief Financial Officer Natwar M. ] Gandhi said the city was demanding the return of the money after discovering that Geneva had "failed to comply" with District laws governing financial institutions "by, among other things, failing to maintain the required collateral." It also said that Mayor Anthony A. Williams had "determined that Geneva may be financially unsound" and that "other actions have occurred, or are pending, which the Mayor has decided would place District funds in jeopardy."Geneva Capital Partners were supposed to set up something along the lines of an endowment, with the fund earning working capital from the returns on its investment. However, according to an anonymous source quoted in the piece, the fund hasn't earned much in the way of returns, and Geneva are taking a nice cut by way of fees. The District's IG is also investigating how Geneva got the job in the first place.
Westbury said yesterday that he had not received the letter. He said he has always had good relations with the District government and had no idea why city officials are concerned about his firm, an investment holding company that owns a family of related firms, including SBM Financial LLC.
Friday, March 17, 2006
DC to Geneva Capital Partners: "Give us our money back"
In 2003 Congress passed legislation giving the District funds to help charter schools purchase and maintain facilities. The District administers the fund through the D.C. Credit Enhancement Fund. The District, in turn, has invested the funds with Geneva Capital Partners, LLC. So what's the big stink? The District wants the money back, claiming that GCP are skirting District financial laws and may no longer be financially sound. So they've sent them a letter.