Five Wisconsin school districts are seeking damages and federal assistance after they were given financial advice that resulted in a loss of an investment for the teachers’ retirement and health care benefits.

Two years ago, the Kimberly, Waukesha, Kenosha, West Allis-West Milwaukee and Whitefish Bay school districts approved the purchase of $200 million worth of collateralized debt obligations that have since lost their value, according to The Associated Press.

According to Joe Kiriaki, Kenosha Area Education executive director, board members thought they were buying safe AAA-rated bonds. However, when the market fell last fall, the school districts lost almost all of their investments.

To deal with the loss of investments, Kiriaki is calling on the federal government to “bail out” the school districts in the same way it bailed out financial giants like American International Group.

“The toxic investment stuff that AIG was involved in — they got $150 billion of TARP [Trouble Assets Relief Program] — this is no different,” said Kiriaki. “… Because this is just like AIG, we’re saying the school districts should be taken care of.”

To help increase support for his position, Kiriaki sent letters to Sen. Russ Feingold, Sen. Herb Kohl, U.S. Rep. Dave Obey and Gov. Jim Doyle to request their help on behalf of Kenosha School District employees. According to Kiriaki, the school district received a response saying the requests were passed on within the national government.

The school districts are also bringing a lawsuit against their investment advisor, Stifel Nicolaus and The Royal Bank of Canada, who handled their finances, claiming they were misled from the start, according to Craig Peterson, CEO of Zigman, Joseph, and Stephenson, the public relations firm assisting the school districts.

Zigman added the districts have seen considerable support for their lawsuit.

“We’ve all seen what the banking and investment industry is capable of,” Zigman said. “There is a good deal of understanding that the banking industry and investment industry were not being open and transparent in their actions.”

The lawsuit was filed Sept. 29 in Milwaukee County Circuit Court, although according to Zigman, the suit has now been moved to federal court. Currently, lawyers for the districts are working to move the case back into state courts.