Political corruption led to largest municipal bankruptcy in U.S. history

By David McElroy · November 11, 2011

Do you have any idea what you pay for sewer service? Most people pay so little that they’re no more conscious of the cost than they are of a cup of cheap coffee. That’s the way it used to be in the county where I live, but widespread corruption on sewer construction and bond deals sent rates through the roof. That corruption has now resulted in the largest municipal bankruptcy filing in U.S. history.

Not that many years ago, my sewer bill was only about $10 for each quarter of the year. When the price started rising, billing became monthly. My most recent bill was $20.18. Current rates are now almost 10 times what they were in 1992. Something that used to cost almost nothing is getting a bit expensive. If my bill is anywhere close to typical for one person living alone, the cost could add up quickly for a family of four or five. That extra bill hits many families hard in this economy, especially as local taxes continue to go up.

National stories about the bankruptcy filing today have been all about the huge amounts of money involved and the fight between the Jefferson County Commission and the NYC banks over cutting a deal to avoid bankruptcy. Most of the stories I’ve seen, though, skip lightly over the most important point. They pretty much ignore the issue of why this mess ever got this bad. I worked in the middle of the politics of the situation, so I can give you some insight into that.

In 1993, a lawsuit was filed against the county alleging that the sewer system was allowing sewage to spill over into a small river during times of heavy rains. That river is important because it’s a source of drinking water for the region. Three years later, the county suddenly settled with the plaintiffs by entering into an agreement to spend a lot of money to fix the alleged problems. (I assume the problems were real, but I don’t know enough about it to have a firm opinion about that.)

On the surface, it seemed like a fair deal that was good for everyone. What we didn’t know at the time was the some county politicians saw the requirement to spend money as a way to suck money out of the system — and blame it on someone else. The corruption was bi-partisan. There were 22 people eventually convicted of charges related to the sewer corruption, and there’s no telling how many others weren’t caught. Among the convicted were white Republican politicians and black Democratic politicians, in addition to employees and owners of engineering and construction companies. (For more about the construction portion of the scandal, see this page.)

When local sewer bills started skyrocketing, the politicians had an easy answer. “It’s not us,” they said. “We’re only spending money because we have to. Those environmentalists made us do it.”

As they spent the money, politicians were cutting deals left and right to take kickbacks to funnel business to certain companies. Those of us working in local politics knew there was something going on a long time ago, even though we couldn’t prove much. There was a lot of talk and some evidence. I remember having a meeting with a reporter from the Birmingham News about 10 years ago with one of my clients. My client — who was running for a county position — laid out the case that there was major corruption going on involving the sewer. The reporter didn’t take it seriously, and he never did anything with the information or the documents we provided.

Even after the construction scandal was over, the corruption didn’t end. The county now had a multi-billion dollar debt. New York banks led by JP Morgan Chase talked the politicians into doing complex “bond swap” agreements that made millions of dollars for them — and the politicians got something out of it, too. Former Birmingham Mayor Larry Langford was one of the slickest young black politicians when he started in the game, and he hoped to become the state’s first black governor. (He had a lot of white support for his tough-talking social conservative attitudes about crime and teen-agers, among other things.) Before Langford was elected mayor, though, he was a member of the County Commission, and he was one of those politicians who got favors from the banks. Langford was still mayor of Birmingham when he was convicted of fraud and sent to prison, where he still is today.

You can read more about the Securities and Exchange Commission investigation into the bond swaps and Langford’s trial here. If you really want to be entertained, though, read this great article from two years ago about his life and political career. It highlights the contradictions and personality flaws that are the hallmarks of many politicians.

So here we are. A number of corrupt politicians and businessmen have been convicted of crimes related to the sewer, but it’s the people of the county who are left holding the bag. Because government operates as a monopoly, we don’t have any choice but to do business with the county or else move.

You can read national coverage of this story in all the usual places today, but I doubt any of them are going to let you know just how strongly this is a story about corruption, not just economic hard times. For instance, take a look at this Reuter’s story, which finally mentions the corruption and convictions in the 10th paragraph.

(As a side point, what’s the purpose of this sentence in the Reuter’s story: “Birmingham was the scene of one of the fiercest confrontations of the U.S. civil rights movement in 1963 when city leaders and police violently resisted a campaign for desegregation by demonstrators led by Martin Luther King Jr.” If the article had been about financial problems for Boston, would there have been a sentence about how white people rioted there and attacked blacks when busing was announced to achieve racial integration? Of course not, but some media people can’t mention Birmingham without turning it into a civil rights story.)

I don’t see any good guys in this story. There have certainly been some honest politicians in the past few years who’ve tried to fix the problem, but the financial hole was too deep. Mostly, it’s a cautionary tale of what happens when corrupt and incompetent people are given monopoly power to make decisions that affect close to a million people. (The Birmingham metro area has a million people, and Jefferson County is home to the biggest group of them.)

The individuals involved were certainly corrupt and many of them were incompetent, but it’s the system that’s ultimately to blame. If this had been a business in a free market, the sewer system wouldn’t have been able to bleed customers, because they would have had other choices. And if it had been a private company, the company could fail and go out of business — leaving the banks to take responsibility for their dishonest gambling deals.

The story that gets told is about corrupt, fallible people, but the real story is a monopolistic, coercive state. Until the coercion goes away, we’re going to keep giving corrupt people the power to run our lives.

Share on Social Networks

After I wrote last night about being happy, I thought of an old song that mirrored what I was feeling. After listening to the entire album, I found it remarkable how well the emotions of that music match my own heart at this point in my life. Bob Bennett’s “Matters of the Heart” came out while I was in college. Even after all these years, it holds up really well, and you can listen to the entire album on YouTube. The specific song which matched my feelings last night was “Madness Dancing,” but I still find every song on the album to be strong with the exception of the eighth and ninth. (The song about his parents, called “1951,” is especially poignant.) In fact, the opening and closing songs paint a picture of my heart at its best now in these lines: “A light shining in this heart of darkness, A new beginning and a miracle, Day by day the integration of the concrete and the spiritual.” It’s old music that you’ve probably never heard, but it means a lot to me.

Narcissists tend to turn their children into narcissists — and since a narcissist doesn’t realize he or she is a narcissist, there’s no bad intent. How does this happen? I watched a YouTube video over the weekend from an Australian psychologist who does a nice job of summarizing how it works. None of this is new to me, but I thought it was useful for those who haven’t spent years digging through books and articles about it. The same psychologist has an excellent summary of something which confuses a lot of people about narcissism. You’ve all seen examples of the loud, boisterous and overbearing narcissist, but what about the ones who are more introverted and vulnerable? This type is called a covert narcissist (or a vulnerable narcissist), and this is what my father was. In the first video, I strongly see myself in the ways my father treated me and in the second video, I see what my father was almost successful in making me become.

It’s National Dog Day in the U.S. and Lucy is here to remind you to go express love and appreciation to your favorite canine. Not only does your doggie friend give you love and affection, but he or she also protects your home from intruders — such as birds, squirrels, mail carriers and other undesirables who deserve to be barked at vigorously. Where would we be without that? And if you think this service is actually unnecessary, ask yourself how long it’s been since your home was the victim of a vicious squirrel attack. See? The doggie defense works. Keep barking at ’em, Lucy.

I’ve spent a tremendous amount of time over the last couple of years thinking and writing about love and connection. I’ve come to understand that this lack of love and connection is at the root of a lot of human tragedy and unhappiness, including addictions and depression. As I talked with others and researched the psychology behind the issues, I ran into the surprising fact that researchers are increasingly using psychedelic drugs to allow volunteers to have experiences which are giving them a sense of connection which they’ve lost — something that allows them to feel connected to love and God in a way they didn’t understand before — which is having dramatic effects in combating things such as depression and addictions. In this 15-minute TED talk — without an audience in the age of COVID-19 — Johns Hopkins researcher Mary Cosimano shares her experiences with guided psilocybin sessions being used to treat addiction, depression and end-of-life issues. One of her key observations is the importance of love and connection. She said that it seems love is literally part of the answer. In her role as director of guide/facilitator services for the program, Cosimano is responsible for training and supervising session facilitators.

It’s something I wrote four and a half years ago — in the desperation of loneliness — and it’s become my most popular article. It’s not my best writing. It’s raw and unpolished. But it seems as though a lot of people can identify with it. It’s called Missing someone creates intense physical sensations in my heart. Just to give you an idea how many people still read it, I had 11,586 people visit the page last month — from 2,907 cities and towns around the world. London sent the most readers for it, followed by New York, Westminster, Los Angeles, Chicago, Kuala Lumpur, Melbourne, Sydney, Toronto and almost 3,000 more. I’ve noticed something interesting. It always gets the most hits from an area of the world in the late hours, right after midnight, and that breaks my heart — because I understand why. All these people are so lonely and are missing someone so much that they turn to a search engine looking for answers, so they stumble upon this piece. I wrote this late at night on the day after Christmas because my heart was breaking. I needed to express how much I missed someone, and a lot of people seem to identify with it. If you’re one of those people, I have no way of knowing who you are, but I empathize with you. I know why you hurt. I wish I could do more to help. I hurt with you, because after all this time, I still feel the same way.

Related Posts