Bankruptcy

WASHINGTON - The Municipal Securities Rulemaking Board is expected this week to discuss whether to change its Rule G-37 to restrict broker-dealer contributions to campaign committees that urge voters to approve ballot measures for new muni bond issues.

CHICAGO - The Illinois Senate yesterday opened its historic impeachment trial of Gov. Rod Blagojevich as the governor took to the national airwaves in a series of talk-show and news interviews, in which he proclaimed his innocence on corruption charges and argued lawmakers want him out so they can raise taxes.

SAN FRANCISCO - Vallejo, Calif., has tentatively agreed to contract changes with its police union, the first breakthrough in months of negotiations on a plan for the city to exit bankruptcy.

SAN FRANCISCO - California Attorney General Jerry Brown is investigating allegations of bid-rigging in sales of derivatives and guaranteed investment contracts to municipalities.

Mary Schapiro, who is poised to be sworn in today as the chairman of the Securities and Exchange Commission, will push to broaden the agency's responsibilities as well as to boost its funding levels, she told a top Democratic lawmaker last week.

BRADENTON, Fla. - Jefferson County, Ala., commissioners tomorrow will be asked to approve a $950,000 contract to hire Washington-based Book Hill Partners LLC.

WASHINGTON - Senate Banking Committee members Charles Schumer, D-N.Y., and Richard Shelby, R-Ala., introduced legislation yesterday that would provide an additional $110 million for federal law enforcement agencies to boost the number of investigators and prosecutors of white-collar crimes that have contributed to the ongoing financial crisis.

WASHINGTON - The House yesterday voted 260-166 to pass legislation that would establish new conditions for the disbursement of the second $350 billion portion of the Troubled Assets Relief Program, including a provision clarifying that the Treasury Department has the authority to help the municipal bond market.

Christopher Cox stepped down as the chairman of the Securities and Exchange Commission Tuesday, after having been criticized for acting too slowly on the financial crisis and failing to protect investors.

CHICAGO - Former Bear, Stearns & Co. public finance banker P. Nicholas Hurtgen faces a March trial on federal charges that he participated in an extortion scheme involving a Chicago-area hospital as it sought Illinois regulatory approval to build a new facility.

CHICAGO - An appeals court in Chicago is expected to rule within the next 60 days on Indiana-based Hoosier Energy Electric Cooperative Inc.'s efforts to stall a demand for a $120 million termination payment on a lease transaction triggered by the downgrade of the transaction's insurer.

BRADENTON, Fla. - Alabama Magistrate-Judge John E. Ott has recommended postponing Monday's federal receivership hearing of the Jefferson County sewer system until Feb. 25.

A group of international finance experts led by former Federal Reserve chairman Paul Volcker is calling for regulation of over-the-counter derivatives, improvements in credit ratings, and a reevaluation of fair-value accounting among its recommendations for financial regulatory reform.

SAN FRANCISCO - When California Attorney General Jerry Brown said "cash-out refunding bonds" violated the state's constitution, he gave bond lawyers and school officials a degree of clarity on a controversial aspect of the law.

Mary Schapiro, president-elect Barack Obama's choice to lead the Securities and Exchange Commission, told members of the Senate Banking Committee yesterday that she would "reinvigorate" the SEC's enforcement division and ensure the commission adopts a "laser-like focus" on uncovering fraud and protecting investors.

DALLAS - A civil lawsuit claiming that two New Mexico pension funds lost $90 million by investing in toxic assets is the first to assert pay-to-play allegations against Gov. Bill Richardson's administration.

BRADENTON, Fla. - Jefferson County, Ala., commissioners yesterday approved new forbearance agreements on nearly $120 million of non-sewer general obligation warrants.

WASHINGTON - House Financial Services Committee chairman Barney Frank and Rep. Gerald Connolly, D-Va., yesterday called for Congress to consider legislation that would require the federal government to provide direct credit enhancement or a guarantee for municipal bonds.

DALLAS - One of the Southwest's most prominent political consultants and a member of the Arizona Board of Regents pitched business for underwriter UBS AG while also heading one of New Mexico Gov. Bill Richardson's fundraising committees.

CHICAGO - Investors who hold $98 million of St. Louis convention center hotel bonds took the first step this week toward foreclosing on the property following the obligated group's default on its December debt service payment.