BRADENTON, Fla. - Jefferson County commissioners yesterday voted 3 to 2 to approve a seven-day extension of its forbearance agreements with banks and swap counterparties at the request of Alabama Gov. Bob Riley.
Riley, a Republican, met individually with each commissioner late Wednesday, asking them to approve the forbearances so he could continue facilitating negotiations with the county's creditors on a plan to restructure $3.2 billion of sewer debt, nearly all of which is in troubled variable- and auction-rate securities.
Despite reportedly being asked by the governor to downplay remarks about a possible bankruptcy, commissioner Jim Carns, also a Republican, yesterday explained why he voted against the forbearances and why he still believes that the best solution for the county is to file for what would be the largest bankruptcy in U.S. history.
"Wall Street is greedy; it wants more, always more" and "Wall Street has failed to live up to its responsibilities in this and many other matters," Carns said in a
Although the sewer system debt is supported solely by its revenues, he said he was told that creditors want all or a portion of a one-cent sales tax that the county now collects to pay off education warrants and that they want "complete release from responsibility ... for what has happened to Jefferson County." Carns said he objects to both.
The commissioner admitted that the county made mistakes in the massive sewer system rehabilitation project under way for more than a dozen years, including "a total of 22 indictments and 21 convictions so far" related to corruption. But he blames Wall Street for that, too, stating that "Wall Street brought the money machine that made all of these crimes possible."
The Securities and Exchange Commission continues to investigate sewer bond deals and swaps, he said, alluding to the recent admission by former county commissioner Mary Buckelew that she took gifts from an investment banker who worked on most of the sewer bond deals.
Buckelew has agreed to plead guilty to one count of obstructing justice after lying to a federal grand jury about the gifts.
"I do not want to release Wall Street before I even know for sure what it did," Carns wrote. "Motivated by overwhelming greed, Wall Street thrashed around creating financial structures divorced from reality and good sense and paid lots of people way too much money."
