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Eye On Boise

Report documents Crane’s securities losses for state, secret settlement

An extensive report published in the “Blue Review” at Boise State University this week documents Idaho state Treasurer Ron Crane’s costly foray into securities lending during the subprime mortgage crisis and the recession, the tens of millions it cost the state, and the secret settlement he signed with Key Bank in 2012 that has prevented the state from seeking damages from the bank.

Crane told author Eric Hayes in an email that he “concluded the settlement was the best course of action,” after “careful consideration of the issues in the case and the input from my team.”

Hayes, who received an investigative reporting grant from the Idaho Media Initiative to pursue the story, reports that other states and institutional investors across the nation have successfully reclaimed some of the money they lost in risky investments fueled by securities lending programs and mortgage-backed securities schemes.

In 2014, he writes, the City of Farmington Hills, Michigan, with about 100 other investors, won a $62.5 million settlement from Wells Fargo for, among other things, violating lending agreements by buying high-risk, long-term toxic securities with public monies. BNY-Mellon, with whom Idaho has also banked,   agreed to pay out $34 million to settle similar challenges to its securities lending practices on behalf of the South Carolina Treasurer’s Office and $280 million in another suit brought by investors including a union pension fund and a children’s hospital. JPMorgan reached a $150 million settlement in 2012 to end a lawsuit involving its securities lending program.

The Blue Review report includes extensive documentation, much of it obtained through public records requests, backing up the report. You can see the full report online here.



Betsy Z. Russell
Betsy Z. Russell joined The Spokesman-Review in 1991. She currently is a reporter in the Boise Bureau covering Idaho state government and politics, and other news from Idaho's state capital.

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