JPMorgan Chase Gains Booming Profits after Suckering Alabama’s Biggest County

Friday, June 17, 2011
Jefferson County, Alabama, is placing nearly 1,000 public workers on administrative leave without pay as officials struggle to pay off a staggering debt of $3.2 billion. The financial crater county leaders dug dates back to the 1990s when they authorized the building of an elaborate sewer treatment plant with the “help” of JPMorgan Chase—a project that has earned the bank huge profits while Jefferson County struggles to avoid becoming the largest municipal bankruptcy in U.S. history.
 
On June 13, Jefferson County Sheriff Mike Hale announced that, beginning on Saturday, his deputies will no longer respond to traffic accidents. He also cut back the number of patrol routes (a.k.a. beats) from 37 to 24.
 
Today, the county has the “world’s grandest toilet,” what’s also been referred to as “the Taj Mahal of sewer-treatment plants.” The plant was financed through a complicated scheme of predatory lending created by JPMorgan Chase that resulted in Jefferson County running up a debt that’s three times the size of the government’s annual budget.
 
Why did local leaders commit to such a fiscally disastrous plan? In a word: bribes. More than 20 officials and businessmen have been convicted of corruption, including Birmingham’s mayor, Larry Langford, who was convicted of fraud and money-laundering for taking bribes funneled to him by Wall Street bankers. In November 2009, the Securities and Exchange Commission forced JPMorgan to pay a $25 million fine and to contribute $50 million to help Jefferson County’s displace workers, but these were drops in the bucket of the bank’s overall profits.
 
Meanwhile, JPMorgan Chase continues to earn enormous profits. In 2010, the bank posted a $17.4 billion profit, and during the first quarter 2011, it reported the biggest quarterly profit in its history.
-Noel Brinkerhoff
 
Looting Main Street (by Matt Taibbi, Rolling Stone)

Comments

hattip 7 years ago
how were they "suckered'/ how is it "predatory lending" it seems hard to imagine that than this otion can be applied to a government entity. surely thay have decent contract management people. seems to me that the government people where arrogance and incompetent. if there was indeed corruption, those contract can be renegotiated and more litigation pursued. jpmc hardly held a gun to their heads. perhaps you could explain it a bit better? sounds to me like you are blaming the just bank and not holding the government responsible for their incompetence and hubris of the government. there are usually controls place for such things, and avenues of redress.

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