Law and legal issues

DALLAS - Orleans Parish district attorney Leon Cannizzaro Jr. has temporarily withdrawn a petition for bankruptcy filed with the Louisiana State Bond Commission over a $15 million federal court judgment against his office for withholding evidence.

BRADENTON, Fla. - Jefferson County, Ala., officials last week disclosed that they were notified once again about a default for covenant violations on some or all of their $3.2 billion of outstanding sewer warrants, most of which remain in troubled variable- or auction-rate mode.

WASHINGTON - House Financial Services Committee chairman Barney Frank is expected to introduce legislation today that will give the Treasury Department and the Federal Reserve explicit authority to purchase or guarantee municipal debt under their economic recovery programs, congressional sources briefed on the legislation said.

CHICAGO — The Illinois House is expected to debate and vote today on the impeachment of Gov. Rod Blagojevich following a special investigative committee’s recommendation that his arrest on federal corruption charges and other alleged abuses of power warrant his removal.

WASHINGTON - The Federal Reserve yesterday offered to provide a backstop for state and local government investment pools by making them eligible for its Money Market Investor Funding Facility, marking the first time during the financial crisis that the federal government has shown a willingness to provide direct assistance to municipal issuers.

BRADENTON, Fla. - Alabama enters 2009 still under the cloud created by Jefferson County's lingering sewer debt crisis. A lot is riding on what happens in the first half of the year.

DALLAS - Two former operatives for New Mexico Gov. Bill Richardson are under scrutiny in a federal investigation into the hiring of a swap adviser for a $1.5 billion bond program that served as the governor's signature economic development program.

CHICAGO - Illinois Lieut. Gov. Pat Quinn - who would take the reins of state government if the General Assembly acts to remove Gov. Rod Blagojevich - yesterday named a former federal prosecutor to lead an ethics panel with the charge of overhauling state government.

DALLAS - CDR Financial Products stepped up its defense of its role in a high-profile New Mexico bond program yesterday after Gov. Bill Richardson withdrew from consideration as secretary of commerce for Barack Obama, citing a grand jury investigation of the deal.

SAN FRANCISCO - Copia: The American Center for Wine, Food, and the Arts - a bankrupt Napa, Calif., nonprofit with about $77 million of outstanding tax-exempt bonds - has abandoned its attempt to secure debtor-in-possession financing, signaling that the so-called wine shrine has closed its doors for good.

Massachusetts Turnpike Authority officials may postpone a vote on proposed toll hikes to give incoming Transportation Secretary Jim Aloisi time to review the agency's books.

WASHINGTON - A top Democrat on the House Financial Services Committee is urging Congress to draft the stimulus package to include a "general revenue sharing" program for state and local governments that would provide aid to municipalities facing budget shortfalls as a result of the economic crisis.

WASHINGTON - Next year is fraught with uncertainty for municipal and other securities markets as a new chairman takes over the helm of the Securities and Exchange Commission and financial services regulatory reform takes center stage in Washington.

WASHINGTON - President-elect Barack Obama formally announced yesterday that he will nominate Mary Schapiro, the chief executive officer of the Financial Industry Regulatory Authority, to become chairman of the Securities and Exchange Commission.

CHICAGO - The Illinois Supreme Court yesterday shot down Attorney General Lisa Madigan's requests that the court declare Gov. Rod Blagojevich unfit to govern following his arrest last week on federal corruption charges.

DALLAS - The U.S. Justice Department is investigating a 2002 bond sale by the University of New Mexico as part of an investigation into possible violations of securities laws, officials said.

CHICAGO - The fiscal costs of the political turmoil resulting from Illinois Gov. Rod Blagojevich's arrest last week on federal corruption charges continued to mount this week as Fitch Ratings downgraded the state, in part due to concerns the scandal might impede its ability to resolve a $2 billion deficit.

The Financial Industry Regulatory Authority yesterday detailed a special arbitration procedure for investors who suffered "consequential damages," such as losses that resulted from their inability to liquidate their auction-rate securities for cash.

BRADENTON, Fla. - Facing the prospect of increasing sewer rates nearly 400% to pay debt service, the Jefferson County, Ala., Commission yesterday unanimously voted to suspend automatic sewer rate increases.

WASHINGTON - The Supreme Court yesterday removed a legal barrier to tobacco lawsuits filed over the allegedly deceptive marketing of "light" cigarettes, allowing for suits based on certain state deceptive practice laws to move forward.