- 46 -
HALPERN, J., concurring: I agree with the majority's
opinion except in one respect, the majority's reliance on tracing
the bond proceeds into the GIC's. I am not convinced that the
statute (sec. 148(f)) contemplates tracing, and I would rely on a
different rationale, viz, that the issuer (the Housing Authority)
itself invested in the GIC's.
The key to the majority's analysis concerning section 148(f)
is in the following paragraph:
The Whitewater and Ironwood GIC's were acquired
with the gross proceeds of the Whitewater and Ironwood
bond issues, respectively. These proceeds were first
placed in developer loan fund accounts and then
transferred to Unified. Unified then transferred most
of these proceeds to the MCFC entities, which, in turn,
used them to purchase the GIC's. Following the flow of
funds on February 20, 1986, it is clear that
$16,110,817.98 of Whitewater bond proceeds and
$11,047,408.05 of Ironwood bond proceeds were expended
to acquire the GIC's. The governmental purpose for the
issuance of the Whitewater and Ironwood bonds was the
construction of low- and moderate-income multifamily
housing projects. The GIC's were not acquired to carry
out this governmental purpose. Accordingly, the GIC's
constituted nonpurpose investments within the meaning
of section 148(f)(6)(A). [Majority op. p. 28.]
Petitioners attempt to rebut the majority's conclusion about
the GIC's by (1) conceding that, yes, the bond proceeds are
traceable into the GIC's, but (2) arguing that the GIC's were an
unauthorized investment. In effect, petitioners' argument is
that, whatever in fact happened to the bond proceeds, the Housing
Authority did not do it: Some other guys (thieves!) did it. Id.
p. 28. The majority makes plain that, to the majority, it does
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