"Federal prosecutors on Monday unsealed a 101-count indictment against the mayor of Birmingham, Ala., and two associates on bribery and other charges related to the $5.4 billion worth of financial instruments for a massive cleanup of county sewers. ... The indictment accuses Mayor Larry Langford--along with Birmingham investment banker William Blount and local lobbyist Albert LaPierre--of conspiracy, bribery, fraud, money-laundering and tax evasion related to $5.4 billion worth of financial contracts negotiated while Mr. Langford was in his previous post as president of the Jefferson County Commission. ... The 62-page indictment follows an investigation and civil lawsuit earlier this year by the [SEC] with largely identical allegations. That case is pending. ... The county's problems stem from a series of derivative contracts, known as interest-rate swaps, negotiated to finance the improvements to water and sewer systems. ... The county's credit downgrade and the change in the value of the swap caused its counterparties to demand additional collateral for the swaps. But county officials have said they can't meet that increase in collateral and continue to make bond payments. Jefferson now owes more than $400 million to swap counterparties, according to Swap Financial Group, a south Orange, N.J., advisory firm", my emphasis, Paulo Prada and Craig Karmin (P&K) at the WSJ, 2 December 2008.
"Larry Langford ... is accused of telling Wall Street giants JP Morgan, Goldman Sachs, Bank of America and the now-bankrupt Lehman Brothers that they had to include his friend's investment banking firm on the deal if they wanted to handle the county's bond work, which was worth hundreds of millions of dollars", Houston Chronicle, 2 December 2008.
As soon as I read the words "swap counterparties" I thought,"what is Goldman's part in this"? GSG isn't named in P&K's article. Need to post more collateral, just tell Zimbabwe Ben that Jefferson County is an AIG affiliate. Piece of cake!
That'll learn yuh! If GSG doesn't want someone in its "syndicate", it will call its "enforcement arm" on you, the (in)Justice Department. Nobody tells GSG anything, excepting maybe, Vladmir Putin. Maybe.
3 comments:
Stinky poo in BHam...
If GSG so smart how come they tangled themselves up in all the derivjunk?
I guess they thought that their endless web of money spinning would go on to infinity?
Big wind blow web down?
Jesse is on pointe today with his remark that all the actions are about saving financial engineering, financial speculation, consumption on credit and penalizing manufacturing and the median wage.
This is just another example of the crime mob thinking that pervades Wall street and Pennsylvania Avenue.
Kind of like Chicago in the 20s and 30s. Maybe we can add Michigan Avenue to the streets of shame in the 2000s.
All of this to bleed main street. I guess Birmingham was too main street. Small time corruption was making the big timers look bad.
Printfaster:
I've been saying things like Jesse for years. Eventually the dollar will collapse and the US will return to making things again as opposed to creating paper products of no value to anyone except the syndicators.
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