Saturday, August 16, 2008

Biggest local government bankruptcy in history?

Alabama county is on the brink of bankruptcy | | The Tennessean: "BIRMINGHAM, Ala. — Alabama's largest county appears headed for the biggest municipal bankruptcy in U.S. history, a $3.2 billion mess created by the nation's credit crunch and a colossal, corruption-riddled sewer project.

Politicians in Jefferson County — which has 658,000 residents and includes the state's biggest city, Birmingham — are struggling to find a way out of the jam, but they have mostly abandoned talk of raising taxes and fees after running into fierce opposition at raucous public meetings."

They are going to put the bankruptcy question to the voters in a referendum. Orange County, CA, has the record at $1.7 billion back in 1994, caused by county treasurer Robert Citron gambling on derivatives with public funds. In the Jefferson County situation there is a massive public works project that has (surprise!) led to massive corruption. Read the article for the details, but this is disgraceful.

Here is some advice. If you are going to use public works projects as the basis for large-scale corruption, at least come to Chicago and see how the experts do it, before you screw it up.

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