Jefferson County Alabama Pressed to File for Bankruptcy, Will Be Largest Municipal Collapse in US History

The reckoning of the muni-bond scandal and cdr financial products is taking place.

March25th-WSJ-Two commissioners in Jefferson County, Ala., are pressing the county to file for bankruptcy court protection, as the county grapples with about $4 billion in debt related to a controversial series of bond transactions earlier in the decade.

The county, which encompasses and surrounds Birmingham, Ala., and is home to about 660,000 residents, was one of the first casualties of the financial crisis, as a series of derivative contracts, known as interest-rate swaps, backfired in late 2007. The bonds and related swaps were issued to finance water and sewer system improvements that had been mandated by the federal government....

If the county were to move ahead with the bankruptcy filing, it would likely be the largest-ever for a local government, surpassing Orange County, Calif.'s $1.7 billion bankruptcy filing in 1994. At present, the county says much of the debt is held by large national banks that were involved in the transactions, including J.P. Morgan Chase & Co., Bank of America Corp. and Morgan Stanley.

On Wednesday and Thursday, a judge in the U.S. District Court for the Northern District of Alabama is expected to hear arguments in a civil suit in which insurers of the bonds are asking the court to appoint a receiver to oversee county finances and find means to repay the debt. The county argues that the court doesn't have jurisdiction to appoint such a receiver, who insurers have requested be "empowered to raise revenue and cut expenses" on behalf of the county.

Langford of course was President of the County Commission that signed off on the deals, he is now under investigation for various corruption charges, by the way the names of those banks and financial houses sound familiar, don't they?

Larry Langford, a Democrat, was accused of soliciting $235,000 from William Blount, chairman of Montgomery, Alabama- based bond underwriter Blount Parrish & Co., and lobbyist Albert LaPierre. William Blount helped Langford get a $50,000 loan, and paid for jewelry, a Rolex watch, an Ermenegildo Zegna suit and clothes from Salvatore Ferragamo, according to the indictment. Blount Parrish received about $7.1 million in fees in connection with the deals, which refinanced debt issued for the county’s sewer system.

Langford, 60, “sold out his public office to his friends,” said U.S. Attorney Alice Martin in a news release. “Through a web of financing agreements, Langford required many institutions to use Blount as a consultant so Blount would make fees and, in turn, pay off Langford. It was a classic pay-to- play scheme.

What is the mayor accused of?
Its pretty straightforward. Starting in 1996 the mayor began to push various deals including a land deal known as Vision Land. Being a man of fine tastes he found his expenses outmatched his revenues, and turned to Montgomery investment banker Bill Blount and lobbyist Al LaPierre. Blount would become the underwriter for every bond offering and LaPierre became a vehicle by which Mayor Langford would recieve bribes. LaPierre would "lend" money to the Mayor to make everything nice and legal and essentialy launder the bribes. In 2006 the SEC began to investigate some of these deals and by December of last year a special federal grand jury in Birmingham returned a 101-count indictment against Langford, the former commission president; Montgomery investment banker Bill Blount and lobbyist Al LaPierre. The indictment includes charges of conspiracy, bribery, fraud, money laundering and filing false income tax returns in what prosecutors described as a long-running bribery scheme related to sewer bonds and other Jefferson County financial transactions. It was this sewage deal which might bankrupt the municipality and involves CDR Financial Products Charles LeCroy of J.P Morgan Chase.
The indictment includes charges of conspiracy, bribery, fraud, money laundering and filing false income tax returns in what prosecutors described as a long-running bribery scheme related to sewer bonds and other Jefferson County financial transactions.


In summary the Mayor is the one:
Who is facing 101 counts on corruption and bribery charges
The man who bankrupted Jefferson County Alabama
Helped increase fees on middle and working class people
The man who did it for designer suits and rolex watches.
Mayor Langford's Culture of Corruption.
Who helped J.P Morgan Chase and other Financial Groups overcharge by 100 million in fees Jefferson County.
The same Mayor who has saddled his constituents with a billion dollar debt.