The scandal of the Alabama poor cut off from water (BBC)

[eppur_se_muova]

By Brian Wheeler
BBC News, Alabama

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.

Tammy Lucas is the human face of a financial and political scandal that has brought one of the most deprived communities in America's south to the point of what some local people believe is collapse.

She says: "If the sewer bill gets higher, my light might get cut off and if I try to catch up the light, my water might get cut off. So we're in between. We can't make it like this."
***
more: http://www.bbc.co.uk/news/magazine-16037798




How nice that I have the BBC to let me know what's going on in my own state.

[ceile]

1. 329% in 15 years?!

That's robbery!

[dkf]

2. What is the explanation for how the financing went wrong?

Funny they throw around some pretty strong language but don't give details. I would expect more of the BBC.

[LanternWaste]

3. Derivative deals, bribes and overruns... it's in the story

"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."

"Six of Jefferson County's former commissioners have been found guilty of corruption for accepting the bribes, along with 15 other officials."

"New county commissioners, struggling to service the debt they inherited from their crooked predecessors, took the decision to file for Chapter 9 bankruptcy last month."


In the story.

[dkf]

6. That doesn't describe what actually happened.

From that I can't tell what is fixable and what isn't. Financing i would think is fixable. If the construction was simply too outrageous to handle then that isn't. It also doesn't explain how this possibly applies to other counties many of which will need sewer upgrades.

Maybe that is too much to expect from one article.

[dkf]

4. Sounds like the original project was botched.

http://mobile.bloomberg.com/news/2011-11-18/jefferson-county-sewer-receiver-fights-for-control-of-star-crossed-system.html

Saying that New York bankers enabled too much debt and risky financing, he said corruption among some former politicians and incompetence were the real culprits. Taking advantage of a federal order to repair the crumbling system, county officials went on a spending spree with their friends and with no budget or plan, Young said.

Five former commissioners were convicted of or pleaded guilty to corruption charges in connection with the project.

Young showed slides of a $52 million treatment plant sited so poorly that it filled with groundwater and needed $36 million to repair, and a “tunnel to nowhere” that stops halfway under the Cahaba River.

“They had a tendency to just make projects up,” he said.

[G_j]

5. thank you BBC nt

[prairierose]

7. Matt Taibbi wrote about this and it is in his book Griftopia..

you should be able to find the story in his columns on Rolling Stone. His explanations of the fraud are usually easy to understand.