Mass. embroiled in SVB’s mess

Mass. embroiled in SVB’s mess

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ECON SECRETARY ON SVB CRASH — Charlie Baker had his blizzards. Two months into her tenure, Gov. Maura Healey has a bank collapse that’s threatening everything from local startups to affordable housing.

The Bay State dodged an immediate bullet when the federal government said it would guarantee all deposits at Silicon Valley Bank, which in Massachusetts had topped $5 billion as of mid-2022. That took pressure off the Healey administration — which spent the weekend engaged in calls with industry leaders, state lawmakers and congressional members — to find quick fixes to issues like helping businesses meet payroll.

But the economic and political fallout from the bank’s stunning crash is only just beginning. At the federal level, where most of the regulatory action will happen going forward, disagreements are running rampant over what caused both SVB and New York’s Signature Bank to fail and how to proceed. Sen. Elizabeth Warren and other Democrats are pinning the failures on Trump-era rollbacks of Dodd-Frank banking regulations and calling to reverse them. But former Rep. Barney Frank, one half of the law’s namesake and a former Signature Bank Board member, is blaming cryptocurrency panic for his bank’s closure.

A Silicon Valley Bank sign is shown.

A Silicon Valley Bank sign is shown in San Francisco, Monday, March 13, 2023. | Jeff Chiu/AP Photo

At home, worried customers lined up outside SVB’s Wellesley and Beverly branches to withdraw their money. And businesses far beyond the tech sector are doing damage control. While the California-based bank was known for serving startups and venture capital firms, its acquisition of Boston Private Financial Holdings in 2021 meant SVB’s Massachusetts branches were also dealing with housing developers, nonprofits and even charter schools.

“We’re not out of the woods yet,” Yvonne Hao, Healey’s economic development secretary, told Playbook in an interview. “We avoided the payroll crisis of this week, but I think [the bank collapse] is going to have a lot of aftershocks and reverberations here in Massachusetts. … And as we feel those aftershocks there may be other ways we want to support these companies.”

SVB’s collapse is injecting new fears into an already uncertain economy just as the new governor is trying to sell her economic agenda on Beacon Hill.

While the fallout is “going to not just be a Massachusetts problem,” it “impacts us more” because of the state’s focus on tech, life sciences and innovation, Hao said. And as the startup ecosystem takes a hit, she said the Healey administration is going to have to get even more “creative” when it comes to driving longer-term economic growth.

“SVB was a big lender of venture debt so that’s going to impact startups and their ability to survive,” Hao said. “Everybody is going to be much more conservative and some of that may be warranted and some of that is not. It could be a couple of years where it’s going to be much harder to start or grow companies. … We’re thinking through already what are some ways the state can partner with our communities.”

GOOD TUESDAY MORNING, MASSACHUSETTS. Healey also has a wicked nor’easter on her hands today. She’s directed non-essential executive-branch workers to stay home, but has no plans to visit a salt pile — yet.

TODAY — Healey speaks at the Massachusetts Building Trades Unions’ annual convention at 10:45 a.m. at the MGM Springfield. Lt. Gov. Kim Driscoll is on WHMP at 9:30 a.m. Rep. Ayanna Pressley announces federal funding at 10:30 a.m. in Dorchester. Boston Mayor Michelle Wu is on GBH’s “Boston Public Radio” at 11 a.m.

Tips? Scoops? How is SVB’s collapse affecting you? Email me: [email protected].

A message from NextEra Energy:

A Beacon Research Poll shows that a majority of Massachusetts voters support clean, low-cost nuclear energy as a tool to fight climate change. Support for nuclear increases beyond 70% as people learn more.


— ON THE DOCKET: The MassGOP is being told to drop the lawsuit former Chair Jim Lyons launched against Treasurer Pat Crowley over access to the party’s bank accounts, so long as Crowley drops his counterclaim. Whether the Lyons faithful on the state committee listen remains to be seen.

CATCH UP: New Chair Amy Carnevale hired former Whitey Bulger prosecutor Brian Kelly to conduct an independent review of the lawsuit. The dispute was over whether Lyons had the quorum he needed to pass the party’s annual budget at a January 2022 meeting and, subsequently, whether Crowley had the money and authority to pay the party’s bills.

KELLY SAYS: Basically, that none of this matters anymore. The committee regained control of its accounts a week after Crowley froze them. The 2022 budget is moot because members already approved one for 2023. And the factual disputes “cannot be resolved short of an expensive trial,” Kelly wrote in a memo to the party obtained by Playbook. “There is no valid economic or legal reason for the Committee to continue to pursue this litigation,” he concluded.

NOW WHAT: State committee members will vote at their June meeting on whether to drop the lawsuit and whether to request Crowley’s resignation. Lyons allies pushed for both to be added to the agenda before Kelly issued his report.

THE KICKER: This whole debacle can be traced back to Nicaela Chinnaswamy. Members walked out of their January 2022 meeting over Lyons’ refusal to seat Chinnaswamy on the state committee, throwing the quorum into question and triggering the financial dispute that led to the lawsuit. A year later, that’s moot, too. Chinnaswamy no longer lives in the district she was trying to represent.

STEP INSIDE THE WEST WING: What’s really happening in West Wing offices? Find out who’s up, who’s down, and who really has the president’s ear in our West Wing Playbook newsletter, the insider’s guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won’t find anywhere else, subscribe today.


“Boston cops involved in anti-vaccine-mandates push say they’ve been fired,” by Sean Philip Cotter, Boston Herald: “Shana Cottone and Joe Abasciano, two Boston cops involved with the anti-vaccine-mandate push over the past year and a half, say they’ve been fired. Cottone, who had been a police sergeant, led the Boston First Responders Union, a group that started to push back on the employee COVID-19 vaccine mandates that Mayor Michelle Wu put into place in December 2021. … Abasciano, a patrol officer, has been out on medical leave, but at one point was the subject of an investigation into whether he’d done anything wrong by attending the rally former President Donald Trump held before some of Trump’s supporters stormed the Capitol on Jan. 6, 2021.”


— FIRST IN PLAYBOOK: Former state Rep. Liz Malia is endorsing Bill MacGregor for 10th Suffolk state representative, according to MacGregor’s campaign. MacGregor, who served as chief of staff to former City Councilor Matt O’Malley, is among those running in the special election to succeed Ed Coppinger.


“MBTA to riders: Add 20 minutes to your commute each way,” by John R. Ellement, Kate Armanini and Mike Damiano, Boston Globe: “The MBTA’s top executive, interim general manager Jeff Gonneville, said Monday he could not predict when the lowered speed limits would be lifted.”

“‘It will happen’: Senate President Karen Spilka, Sen. Jake Oliveira visit Palmer depot, proposed stop on east-west rail,” by Jim Kinney, Springfield Republican: “State Senate President Karen E. Spilka toured Palmer’s historic Union Station Monday as legislators begin considering Gov. Maura T. Healey’s proposed budget, including the $4.5 million Healey’s included for a passenger station here. ‘When, not if,’ Spilka, D-Ashland, said of the east-west passenger rail project promising faster and more frequent trains from Boston west to Springfield and Pittsfield. ‘It will happen.’ But Spilka was light on details beyond saying the service would be a boon for the entire state, not just Western Massachusetts.”

A message from NextEra Energy:

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— BIDEN ON BLAST: Massachusetts Democrats are dinging President Joe Biden over his administration’s approval of a massive oil project in Alaska that’s opposed by environmental groups and some nearby tribal communities.

Sen. Ed Markey called it an “environmental injustice” that “sends the wrong message to our international partners, the climate and environmental justice movement, and young people who organized to get historic clean energy and climate investments into law last year.”

Rep. Jim McGovern called it the “wrong decision” in a tweet: “Big Oil is comfortable putting profits over people, but will do nothing to secure our planet for posterity.”


“Berkshire students want more than a voice on school committees — they want a vote,” by Sten Spinella, Berkshire Eagle: “Local students, with backing from their state representative, are pushing to allow for a student vote on decisions that come before school committees. State Rep. Tricia Farley-Bouvier, D-Pittsfield, has introduced a bill in the state Legislature that would allow student-members of school committees to vote on such decisions. State Sen. Paul Mark, D-Becket, and state Rep. Smitty Pignatelli, D-Lenox, are co-sponsors. If it passes, Massachusetts would become the second state to allow student-representatives such power.”

DOWNLOAD THE POLITICO MOBILE APP: Stay up to speed with the newly updated POLITICO mobile app, featuring timely political news, insights and analysis from the best journalists in the business. The sleek and navigable design offers a convenient way to access POLITICO’s scoops and groundbreaking reporting. Don’t miss out on the app you can rely on for the news you need, reimagined. DOWNLOAD FOR iOS– DOWNLOAD FOR ANDROID.


“Boston’s tech, life science, and nonprofit communities hail SVB rescue, but worries persist,” by Aaron Pressman and Jon Chesto, Boston Globe: “Business leaders across technology, life sciences, housing, and education opened new accounts, scrambled to move funds, and investigated whether their loans would be affected by the abrupt closure of SVB. And concerns remain about financial problems spreading to other banks, many of which saw their stock value drop Monday, even as President Biden sought to reassure the public that the banking system is safe.”

“Smaller banks in Mass. have a unique safeguard for their deposits,” by Meera Raman, Boston Business Journal: “The Federal Deposit Insurance Corp. insures just the first $250,000 in deposits in the event that an FDIC-insured bank fails. But customers of Massachusetts-chartered savings and co-operative banks have additional protection: a unique program that insures a customer’s total deposit beyond the FDIC limit.”

“TikTok on Underground Railroad activity at Mass. Nature’s Classroom prompts response,” by Irene Rotondo, MassLive: “A Massachusetts woman went viral on TikTok describing how she had to pretend to be a slave as a child during the Underground Railroad activity on a field trip to Nature’s Classroom. Now, more who attended are coming forward to share their own experiences.”

“PETA accuses Mass. lab company of illegal testing of monkeys,” by Henry Schwan, Telegram & Gazette.


— TOP TARGET: New Hampshire Rep. Chris Pappas is among the Democratic lawmakers the National Republican Congressional Committee is aiming to oust in 2024. Pappas defeated Republican Karoline Leavitt by 8 percentage points to win reelection last year.

“Sabina Matos announces run for Congress,” by Steph Machado, WPRI: “Lt. Gov. Sabina Matos has become the first major Democrat to jump into the race to replace David Cicilline in Congress.”

— “Vermont shocked by decision to remove books from state college libraries: ‘It’s an embarrassing decision’,” by Hilary Burns, Boston Globe: “Leaders of Vermont’s public colleges are taking an extraordinary step to save money: getting rid of most of the books in campus libraries.”

A message from NextEra Energy:

Registered voters in Massachusetts show a clear interest in leveraging nuclear energy in the fight against climate change, according to a recent Beacon Research survey. The survey focused on the state’s energy resources, specifically how nuclear energy can be incorporated to reach long-term clean energy goals.


TRANSITIONS — Adam Marx has joined Smith, Costello & Crawford as a lobbyist focusing on health care.

— Bonnie Heiple of Wilmer Cutler Pickering Hale and Dorr starts next week as MassDEP commissioner.

Gov. Maura Healey’s six-member state police colonel search committee includes: former Essex DA and Patrick administration public safety Secretary Kevin Burke; former Gaming Commission member Gayle Cameron; Roca’s Molly Baldwin; Massachusetts Chiefs of Police Association ED Mark Leahy; MOVA ED Liam Lowney and Mintz’s Natashia Tidwell.

HAPPY BIRTHDAY — to Taunton Mayor Shaunna O’Connell, Massachusetts Democratic Party Chair Gus Bickford, Jackson Cote, Denise Lloyd, Kenzington “Zing” Elechko, Miles Weber and Susan Slattery.

Want to make an impact? POLITICO Massachusetts has a variety of solutions available for partners looking to reach and activate the most influential people in the Bay State. Have a petition you want signed? A cause you’re promoting? Seeking to increase brand awareness among this key audience? Share your message with our influential readers to foster engagement and drive action. Contact Jesse Shapiro to find out how: [email protected].

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