October 3, 2008

DILLON CALLS ON RELL, BLUMENTHAL
TO PROTECT CONNECTICUT COLLEGES
Financial crisis threatens schools in CT

Representative Pat Dillon (D-New Haven) called on Governor Jodi Rell and Attorney General Richard Blumenthal to intervene in Wachovia Bank's planned merger with Wells Fargo to ensure the security of funds of Connecticut colleges and nonprofits invested in Commonfund. Wachovia is the trustee of Commonfund.

Commonfund manages $42 billion in assets for colleges and non profits nationwide, including funds from Connecticut colleges and universities. This week Commonfund restricted redemptions from the fund and said its assets would be liquidated. The move may affect the financial positions of any Connecticut colleges and nonprofits that use Commonfund for short term accounts. Even if Wachovia and Commonfund ultimately release the dollars, organizations may have difficulty paying vendors or meeting payroll.

"It appears that the Wells Fargo move is a better deal for Wachovia shareholders than the alternative proposed merger with Citibank, but it is unclear what the terms of the Wells Fargo merger are and what the fate of Commonfund participants will be" said Rep. Dillon. "Even if they get their money out, it may take time and hurt cash flow. Bob Steele, president of Wachovia, lives right here in Greenwich. We should take advantage of that."

Representative Dillon was first elected to the General Assembly in 1984. She is an Assistant Majority Leader and serves on the Appropriations, Higher Education and Judiciary committees.