The mere mention of municipal bonds triggers this recent news piece, which details Bank of America (and the other giants) corruption in a complex list of mortgages, credit cards, investment malfeasance and much more.
"The two that, to me, are the most incredible are municipal bid rigging—Bank of America a couple years ago paid a $137 million settlement, because they were caught rigging the bids for municipal bond issues in at least 88 different cases across—I think that was 25 different states.
What this means is whenever some municipality—it could be the Guam power authority or, you know, the city of Baltimore—when they want to raise money, they have to do it through an investment bank, and they’re supposed to do it through an auction process, where all the banks compete to see how much they’re going to pay to get that business.
Well, these banks have been systematically colluding and submitting artificially low bids, and there’s usually an insider on the municipal side who kind of games the whole process. They’ve been systematically doing this around the country for years and essentially cheating municipalities out of hundreds of millions of dollars in revenues that they would have otherwise gotten. That’s a big one."With the backdrop of a known nationally corrupt financial system, it is naive to take the city finance director's presentation at the last meeting at face value. Again, it has been said before on this blog; we have well earned our right to discern, to distrust, to question everything related to a completely monetized form of governance, utterly dependent on banks, lawyers and financial consultants.
Oh, and that big bite out of the money stack at the opening is the nearly half a million dollars the national, regional consultant team will be paid to do a stack of paperwork revisions based on the original bonds they all worked on in 2004. More than $450,000 (Jay's math is lower) to go to a hand full lof individuals with firms headquartered out of state? Just because it is a contingency fee doesn't mean it isn't going to be paid and included in the bond debt. Can't we do better than fairy dust, blinkers or worse approaching an economy in crisis?
The council all voted to go ahead and the public speakers are coming from different perspectives than are presented in this post. There will be plenty of opportunity throughout May - a standard budget discussion month - to communicate all kinds of viewpoints. Encinitas government will not suffer from too much scrutiny. What better time to put people's fears to rest or demonstrate a willingness to allow more transparency?
Public Speakers with decades of experience in the financial dealings of the city.
