Seems the deal the Mayor cut with the New Haven Savings Bank is even sketchier than it looked: Under an agreement between bank and city officials, New Haven Savings Bank would revoke its $25 million pledge to create a community-based lending institution if the mayor bashes a pending ownership conversion. Mayor John DeStefano Jr. was a leading opponent to the necessary federal and state approvals for NHSB to go from a mutual savings bank owned by depositors to one owned by stockholders. State Banking Commissioner John Burke approved the plan Jan. 26, the same day the bank and DeStefano announced a new lending foundation. Officials did not disclose at the press conference or in a press release that DeStefano agreed in writing, on behalf of himself and the city, not to "take any action or make any statement critical" of NHSB or its successor NewAlliance or the managers of either bank. The agreement is in effect until the conversion takes place and five years afterward, which would bind future mayors... DeStefano said the agreement is not a de facto gag order because he would be free to blast NHSB if it did not live up to its oral promises to create a $27 million pool for loans to low- and moderate-income borrowers; and contribute $40 million in stock to its charitable foundation, of which $25 million would be used for a new foundation..."If they don’t conform to the agreement, I’m free to criticize them and I will," the mayor said. "It binds me and it binds the city. I think they’re mostly concerned about me, to be honest with you." But Board of Aldermen President Jorge Perez, D-5, of the Hill, raised doubt about whether DeStefano had power under the city charter to obligate the legislative branch to such a pact without a majority vote of the 30-member board. The agreement also requires DeStefano, the city and the bank together will approve statements to the media or public. The mayor also is required to "use his best efforts" to convince other bank opponents to back down. The document refers to Attorney General Richard Blumenthal, state legislators, local unions, the Connecticut Center for a New Economy and Elm City Congregations Organized and others. "The mayor agrees to use (his) best efforts to persuade all other third parties to end further demonstrations against the bank or boycotts of the bank or any threats thereof, withdraw any pending litigation and to desist from opposing" the conversion, the agreement says.


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