Commission President Bettye Fine Collins discusses Jefferson County’s options as clock runs out.
Popularity: 8% [?]
Commission President Bettye Fine Collins discusses Jefferson County’s options as clock runs out.
Popularity: 8% [?]
Read the full story and more here.
Popularity: 11% [?]
As expected, the SEC has filed a lawsuit in federal court here against Mayor Larry Langford, Montgomery investment banker Bill Blount and lobbyist Al LaPierre. The SEC’s complaint is a civil lawsuit, so nobody is getting arrested or going to jail. That’s the Justice Department’s end of things and they’re still working at it.
In the meantime, the SEC wants Blount, LaPierre and Langford to repay money they received in various bond deals from Langford’s tenure at the Jefferson County Commission. According to the lawsuit, Blount paid off more than $150,000 of Langford’s personal debts, while Langford directed more than $6.7 million in fees to Blount’s investment firm, Blount Parrish.
Popularity: 18% [?]
The financial crisis over Jefferson County’s sewer debt will not cause layoffs or otherwise effect employee benefits, Commission President Bettye Fine Collins said Thursday morning.
During the commission’s weekly work session, Collins read from a memo to county employees assuring them that their jobs and benefits are not at risk.
By the contracts with bond holders, the sewer system debt is payable only from the net revenues of the sewer system, Collins said. That means other county services will not be effected. What’s more, the debt service comes after other sewer operating expenses, such as payroll.
While that’s good news for county employees, the commission and its advisors are still struggling over how to keep the county out of bankruptcy. On Wednesday, the county announced that it would not post collateral or insurance to stop terminations of 13 interest rate swaps. Thursday, Collins seemed more upbeat, indicating that the county might be able to work with its creditors to avoid bankruptcy.
Read the full story
Popularity: 75% [?]
Two weeks ago, Banks, Finley, White & Co. delivered the fiscal 2007 audit to the City of Birmingham. The city received a clean bill of health.
“We did enough tests and procedures that we feel that if fraud had occurred, we would have caught it,” Jeff White told the Administration Budget and Finance Committee.
Realize, though, that this audit was for the fiscal year ending June 31, 2007, the last full fiscal year of the Bernard Kincaid administration. Short of inspiring confidence, it is a good indicator of what Birmingham has yet to loose - its good name on the market and credit with the banks.
Next, you have to look to one hiring change made by the new mayor, Larry Langford.
Popularity: 41% [?]
Jefferson County has until Friday to post $184 million in collateral or insurance to prevent the costly terminations of its interest rate swaps, but in two more material event notices Wednesday night, the county says it will meet neither requirement.
PDFs of Jefferson County’s latest event notices can be found here and here.
“The County has notified the counterparties to the Swap Agreements that it does not
presently intend to post collateral or provide insurance to the counterparties for its obligations under the Swap Agreements,” the county said in the notice.
Popularity: 56% [?]
Thursday night Jefferson County released the second “material event notice” in as many weeks regarding its sewer debt crisis. The news isn’t good.
According to this release, recent downgrades by ratings agencies could soon cause the county’s interest rate swaps to terminate, an event that could cost the county hundreds of millions of dollars. The only way to avoid such terminations is for the county to produce $184 million in insurance or collateral by March 7. According to the notice, the county does not have the revenue or cash on hand to provide such collateral.
The county writes in the notice:
“As of the date of this notice, the County can offer no assurances that it can obtain the required insurance or post the necessary eligible collateral to avoid an Additional Termination Event under the Swap Agreements. If an Additional Termination Event occurs, the respective counterparties will have the right to terminate the respective swap transactions upon notice to the County, in which event the County would be obligated to pay the resulting termination payment in accordance with the provisions of the Swap Agreements. The aggregate amount of the termination payments that would be due is approximately $184 million as of February 27, 2008.”
What’s more, interest rates on variable rate warrants continue to rise and auction rate warrants continue to come due. As the auction rate warrants mature, and the county still cannot pay or find buyers for new bond debt to refinance the old.
“The County has experienced a total of eight failed auctions as of February 27, 2008 with respect to $869,450,000 aggregate principal amount of Auction Rate Warrants,” the county said in the event notice.
The county says that, while it continues to look for solutions to the problems, it can promise none.
More to come as we translate from the original Greek.
Or you can find the whole document here.
Popularity: 86% [?]
It is common knowledge in Birmingham that the Securities and Exchange Commission has been investigating a series of conspicuous bond deals that took place during Langford’s tenure as president of the Jefferson County Commission.
Also, it has been widely reported that, in his second interview with the SEC, Langford refused to answer investigators’ questions, citing an ambiguous Constitutional right.
What has not been reported is what Langford said to those same investigators in his first SEC interview on June 21, 2007.
Birmingham Weekly has obtained a copy of a transcript from that interview. What it reveals about the mayor is disconcerting: personal financial habits that are reflective of — and perhaps connected to — his management of public funds, and an attitude towards debt that makes the federal government seem frugal.
And read our Cover Story about it here.
Popularity: 100% [?]
Jefferson County: $73,000
Langford told the SEC that he made $68,000 per year for the Jefferson County Commission, in addition to a $400 per month car allowance.
Birmingham Budweiser: $80,000
For 25 years Langford has done public relations for the beer distributor, a full-time job in addition to his elected positions.
Global Link: $120,000
Langford and his wife run a telecommunications business out of their Fairfield home. However, when questioned by the SEC, Langford gets confused about the company’s name.
Clothes: $70,000
Langford told the SEC that in 2002 he had accumulated that much debt, mostly from buying clothes. About $40,000 of that debt was to Shaia’s mens store in Homewood.
Teeth: $52,000
According to Langford, he maxed out his credit cards paying for dental bills.
More Clothes: Unknown
Langford said that he bought thousands of dollars worth of suits while on county bond trips to New York. He charged them to his credit cards, which he previously testified had been maxed out paying dental bills.
Mortgage: $300,000
Last year, The Birmingham News discovered that Langford had received a $300,000 mortgage in 2000 on his Fairfield home. The loan from The Bank — now Superior Bank — was due in three years, but probate records don’t indicate it was paid. According to Langford, he had two home equity lines, in addition to “a couple of car notes, maybe three.”
Al LaPierre: $150,000
Late last year, Langford told the SEC that he had borrowed a total $150,000 from the lobbyist. Neither Langford nor LaPierre had recorded the loans on their financial disclosures to the Alabama Ethics Commission. The $150,000 is the total from at least two loans. Langford said there is no paperwork and that their agreements were verbal.
Colonial Bank: $50,000 (paid)
Langford took out the loan in 2002 to pay off credit cars and clothing store credit. While the loan was due six months later, Langford never paid. Instead, LaPierre paid it for him with one of the loans above.
Cover story and PDFs of Langford’s testimony here at noon.
Popularity: 82% [?]
May 9, 2003: Email from investment banker Bill Blount to then-Commission President Larry Langford says in part, “Need to know loan request from Colonial.”
May 28, 2003: An entry from Langford’s calendar records a meeting with Blount.
May 28, 2003: Blount writes a check for $50,000 to lobbyist Al LaPierre.
May 30, 2003: LaPierre writes a check to Colonial bank for $20,000.
June 4, 2003: Blount writes an email to the Colonial bank manager over Langford’s loan. The email reads in part, “Langford note will be paid by LaPierre today and then Milton will call REL to report that it has been paid. I think we will be okay by then.”
June 4, 2003: Blount writes a check to LaPierre for $30,000.
June 5, 2003: Al LaPierre writes a check to Colonial bank for $31,644.18.
June 27, 2003: Blount writes the same Colonial bank manager. The email says, in part: “I’m taking commissioners Langford and White to Atlanta tomorrow (flying) to get them out of town (their request as of yesterday afternoon). When you have your third billion-dollar deal in the span of three months, bankers absolutely drive them crazy.”
July 21, 2003: LaPierre’s firm faxes a $100,000 invoice to Blount Parrish Holdings “for services rendered regarding Jefferson County.”
July 2003: Blount writes an email to bond swap advisor Charles LeCroy. The email reads in part, “Langford sent LaPierre home. Said he wanted to meet with White by himself.”
Aug. 6, 2003: Blount writes and email to LeCroy. It reads in part, “I hope you will have some info to give them an idea of what it is we’re doing today. Larry called and wanted LaPierre there at 3:15 to discuss some political stuff. Also, he is hitting us up for something for his ministry. LaP says it isn’t much. I will be headed in that direction about noon. Call me on cell if you can.”
Aug. 28, 2003: Blount writes in an email to LeCroy, “Visited with LL yesterday, and he told me that he was setting up committee to effect the swaps without Commission approval.” The email continues: “He also said he instructed Norm [Davis] to move forward with the swap and for me to call him.”
Sept. 4, 2003: Blount writes in an email to LeCroy, “LaP. met with LL yesterday and put the whip to him. He said that what Compass and UBS are doing will not affect out moving forward with entire swap. They were unable to complete entire conversation, because LL had to leave. LaP felt he was flopping. Anything else from your end, call me on cell today.”
Popularity: 80% [?]
