Thursday, December 15, 2011

BBC News - The scandal of the Alabama poor cut off from water

BBC News - The scandal of the Alabama poor cut off from water
Banks stand to lose millions of dollars in debt repayments if the biggest municipal bankruptcy in American history is allowed to proceed.

But the real victims of the financial collapse in the US state of Alabama's most populous county are its poorest residents - forced to bathe in bottled water and use portable toilets after being cut off from the mains supply.

And there is widespread anger in Jefferson County that swingeing sewerage rate hikes could have been avoided but for the greed, corruption and incompetence of local politicians, government officials and Wall Street financiers.

The bankruptcy of Jefferson County was caused by a toxic stew of local government corruption and Wall Street greed. The county bought a gold-plated sewer system and then was encouraged by JP Morgan to get all creative with paying for it. The result? "The facility, which has been under construction since 1996, was meant to cost about $300m. But the bill soared to $3.1bn after construction problems and a series of bond and derivatives deals that went sour in the financial meltdown of 2008. Investment bank JP Morgan Securities and two of its former directors have been fined for offering bribes to Jefferson County workers and politicians to win business financing the sewer upgrade."

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