Banksters
Banks' $7 Billion Tax-Exempt Bond Ruse Yields Nothing for Needy
By William Selway, Martin Z. Braun and David Dietz
Oct. 4 (Bloomberg) -- Pastor Willie Williams frowns as he approaches a 10-foot-high concrete wall that's topped by spirals of barbed wire. On a steamy August morning in Pensacola, Florida, he's entering the Oakwood Terrace apartments for low-income residents. Williams, 62, shakes his head as he passes an unmanned security station.
"It looks like a concentration camp,'' he says.
The 300-apartment complex was on a list of developments that were eligible to benefit from $220 million in bonds issued by a public agency in 1999 to promote affordable housing in Florida. None of the money went to Oakwood Terrace. Not a penny of the $220 million bond issue -- which was underwritten by JPMorgan Chase & Co., the third-largest bank in the U.S., and insured by a unit of American International Group Inc., the world's largest insurance company -- was ever spent on low- income residences.
During the past decade, local governments across the U.S. have issued more than 70 of these phantom bonds -- at least $7 billion of them. That's enough money to pay the salaries of 150,000 teachers in the U.S. for one year, based on an average pay of $46,597. Proceeds from the tax-exempt bond sales are supposed to be used to improve homes for the poor or upgrade health care for the elderly or supply computers to inner-city schools.
Taxpayers never get most of those benefits; the winners are the banks, insurance companies and financial advisers that get paid millions of dollars for crafting these transactions and then profit by using bond proceeds for their own investment gains.
2 comments:
Kate,
A few years ago I became familiar with the writings of Katherine Austin Fitts who served at HUD in the Reagan era.
http://www.solari.com/
She knew of plenty of chicanery in the accounting there. Here's just a sample:
http://www.whereisthemoney.org/59billion.htm
Of course you'll recognize that the $59 Billion that went unaccounted for was during the Clinton years, when the Democratic Attorney General of New York candidate, Andrew Cuomo, was at the helm of HUD.
In 2000, I attended a U.S. Conference of Mayors meeting in Seattle. Andrew Cuomo gave one of the best political stump speeches I've ever heard in person. I asked a friend of mine, the mayor of my home town, what he thought of Cuomo as a Presidential candidate. My friend was brief. His comment was "he's bent".
To paraphrase, those who ignore history are... the designated suckers.
Any pol doing more than one term is "bent." Have to be to survive in the political cesspool. Term limits might help.
I know more than a few realtors and an assortment of contractors in this region who became wealthy with doing HUD deals for low to moderate income housing. Their corruption and theft, most of it legal on paper and the remainder basically unprovable, still amazes me.
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