Something is very wrong in the Land of Cotton



Dr. Robert Bullard
Environmental Justice Movement Founder

Friday, September 16, 2011

Jefferson County Bankruptcy Debacle Languished in Debt While Paying Lobbyists

In an article from OpenSecrets.org (linked and excerpted below) from July 2011, reporters from the Center For Responsive Politics laid out the ugly truth of how irresponsible Jefferson County has been in managing their financial affairs. Two lobbying firms have received almost one million dollars from Jefferson County--both have ties to Senator Richard Shelby and Senator Jeff Sessions among a whole host of Alabama politicians and various state corporations.

One of those lobbyists, Michael J. Davis, is involved in a current controversy involving Birmingham Mayor William Bell. Mr. 'revolving door' Davis has collected some sizable fees from the Jefferson County Commission and the Jefferson County Sheriff's Department over the years, in addition to functioning as the loot collector for Governor Bentley's Inaugural corporate collection plate fund.

Despite claiming "we're broke" the county continues to pay lobbyists with money they claim they don't have while it wallows in a staggering debt. An offer is now on the table to place the burden on the backs of ratepayers (and taxpayers) by increasing the sewer rates to allow the county to avoid bankruptcy. 
*(County voted in favor of offer @ 10:30 CST September 16, 2011) 

In typical Alabama fashion, the bankruptcy issue is dividing the rich and poor sections of the affected areas as well as the populace and the business community. The business community *(BBA) has even more potentially financially devastating plans on the block for Birmingham that we think are inappropriate with the county's current financial status--a $60 million dollar ballpark and the $90 million dollar per mile Northern Beltline are the most troubling. 

Jefferson County's political atmosphere is just as bad as it was in 2009 when one lobbying firm, Book Hill Partners, pulled out of a contract citing the "toxic political landscape" as a major factor when they refused to lobby for Jefferson County in the sewer scandal aftermath. (audio interview WBHM)

So who's still standing? 

Balch & Bingham and lawyer Michael J. Davis, who in addition to his lobbying role, is also the *chair of the BBA's Government Affairs Committee.

Jefferson County has defined itself as an easy mark for corruptibility and it should come as no surprise to anyone that their answer to handling their financial matters is: 'Let's keep right on repeating our mistakes and continue over-paying the same scoundrels (lobbyists, lawyers and Wall Street firms) who helped get us into this mess to begin with."

This won't be the end of the troubles for Jefferson County, and could even spell the beginning of a new chapter of financial disaster for the county despite this morning's vote to reach a settlement with Wall Street.

From the OpenSecrets.org story:
The county, now on the brink of bankruptcy, once, though, had hired guns in Washington.

Between 2001 and 2009, according to research by the Center for Responsive Politics, the Jefferson County Commissioners spent $930,000 on the lobbying services -- about $30,000 per quarter.

Over those nine years, the commissioners retained the services two different lobbying shops -- first, Van Scoyoc Associates, then Balch & Bingham.

Van Scoyoc Associates advertises offering "companies, nonprofits, universities and cities with a full menu of services." According to a review of lobbying reports, the firm mostly lobbied on budgetary and transportation issues.

Balch & Bingham, likewise, lobbied mostly on budgetary and transportation issues. The firm also worked on development issues such as "Cahaba River waste water treatment plant for solids handling improvement" and "Jefferson County Parks Improvement Project."

Beginning in 2005, the Jefferson County sheriff's office also retained the lobbying services of Balch & Bingham -- investments they continue to make to this day.

Since 2005, the Jefferson County sheriff's office has spent $478,000 on lobbying, including $38,000 during the second quarter of 2011.

During this time, one federal-level issue that has affected Jefferson County is the new Wall Street reform legislation, passed by the Democratic Congress last year and signed into law by President Barack Obama a year ago.

And this year, the fight to delay the new regulations in the Wall Street reform law -- often called Dodd-Frank after its chief congressional sponsors -- has been aided by a congressman who actually lives in Jefferson County. (Spencer Bachus)

Read more here

Timeline from scandal to settlement

*Update 9/21--Davis resigned from his chair position at the BBA. 
*photo credit: How JP Morgan helped bankrupt an entire county
Bookmark and Share
 Subscribe in a reader


  1. Would this fall under the legislature's definition of acting corruptly?
    Probably not since so little rarely does.

  2. I had no idea how tangled this web really was...can't help but wonder if it figured into the push to settle.

  3. “At the most critical juncture in the long and drawn out negotiations with creditors, the commissioners took control of the situation and negotiated an extremely favorable settlement for taxpayers and ratepayers," said BBA Chairman James McManus said in a written statement. "The final resolution of the sewer crisis will set the stage for a rebound in the County’s economy and will strongly support BBA’s efforts to stimulate economic development and job creation."

    Earlier this year, BBA leaders told us that it was imperative for the county's economic development efforts to avoid bankruptcy.

    Read: The BBA gets to continue fleecing Birmingham and Jefferson County.

  4. The BBA and every other coalition in this state does not care about the small businessman, they are just doing the bidding of a few wealthy corporate entities who stand to gain from things like the Northern Beltline. So I guess the BBA thinks since we are now once again chocking every cent they can from the poor private citizen they can negotiate more irrational economic development pet projects. So sad and corrupt.

  5. Convenient timing right before the public meetings on the Northern Beltline isn't it?
    What say you Mr. Davis?

  6. Via Reuters:
    "But a key -- and potentially deal-breaking -- provision remains the creation by the Alabama state legislature of an independent public company."

    "This General Utilities Services Corporation would serve as the issuer of the refinancing debt. But there is no guarantee that the proposed public company will be approved by a Republican-controlled legislature which earlier this year voted down a bill to establish a new tax for the county."

    Create another figurehead commission to give the legislators and politicians cover while sticking it to the taxpayers. What would Grover Norquist say about the state coming up with $50 million to bail out JeffCo? Governor Bentley signed his no new taxes pledge along with others in the legislature.
    This smells as bad as the sewer.

  7. Cue operatic music as Alabama AG Strange throws back his cape and announces he will protect the ratepayers in Jefferson County:
    "I commend the Jefferson County Commission for it's leadership and hard work for the people of the county. The job of the Alabama Attorney General's Office is to represent the sewer system rate payers, and we will diligently review the rate structure contained in the proposed settlement to ensure that rates are just and reasonable."
    Um.. Luther, you are just a little late to the disaster scene don't you think?

  8. Stick it to the taxpayers, with the Governor's blessing no less, while all the looters walk away scott-free.

  9. After all this time, this possible predictable finale is of interest to me. All this time invested in creative financial shenanigans after they 'made off' with the money. They are most likely thinking they have stretched it out like a well written script worthy of Academy Award recognition. Perhaps some are thinking in NASCAR terms, as in a well driven race. Just think about the talent required for such a feat. The twists and turns. The red light when it all appeared to stop, caution light during election years and the green light when various plans would be presented, as if it was 'all systems go'. The whining, crying, theatrics and assorted drama played out year after year, for the people, of course. It was all for the people.

    And now, the fix is just about in.

    You didn't actually believe the people would not pay, did you?

    The notes from commissioners, now and in the past must read something like: People will pay increased rates, People will pay additional increased rates, People will pay more now, People will pay more later. (PS - Next meeting - present business to pay more lobbyists, more money).

    Most likely.

  10. Jefferson County Averts Bankruptcy (Maybe)
    Business Insider by David Johnson
    September 16, 2011

    It appears that Jefferson County, AL has averted a chapter 9 bankruptcy filing. If it has been averted, the terms for bondholders were steep: a 35 percent haircut ($1.1 billion on $3.14 billion of sewer bonds, with JPMorgan providing $750 million of that) and crossed fingers that the state of Alabama would create a new bond issuing entity.

    I say “appears” because this agreement, passed by the County Commission on a 4-1 vote, is contingent on the following:

    Governor Robert Bentley must call a special session of the Alabama legislature.

    The special session must be persuaded to create an independent sewer authority with the power to issue new bonds.

    This independent authority must be backed by a “moral obligation” pledge from the state.

    The Alabama legislature must also cure Jefferson County’s general fund deficit.

    All this and a 35 percent haircut, and I am receiving emails today crowing that this development proves the underlying health of municipalities?

    Whatever happened to the much-hyped ability of local governments to generate the incremental revenue necessary to satisfy their debts? Jefferson County has had one attempt to do so struck down by the Alabama state court and the issue of the size of sewer-rate increases was a major point of contention between debtor and creditors throughout this situation.

    We are in the very early stages of what is likely to be a long, slow process of restructuring in the municipal space. Politicians will grandstand, unions will raise the decibel level, bondholders will do their best to remain ignorant of political realities, but in the end many local governments across the country will come to the conclusion that they have unsustainable liabilities and drastic action must be taken.


    If JeffCo continues to allow the BBA and BARD machine to lead them down more primrose paths they'll be right back in this mess again sooner rather than later.

  11. Why does Alabama answer corruption with bailing it out and putting the liability on the backs of taxpayers, instead of prosecuting the criminals responsible for the problems?
    Wouldn't it be interesting if some reporter took the time to investigate what the cost of corruption in Alabama really is?

  12. The BBA, BARD, Balch& Bingham, the city, county and state and all of those bureaucrats and assorted types with classic cookie cutter mentality decide who gets the tab.

    It's you. Tag. You're it.

    Sooner. Later. This is it. Always.

  13. The Birmingham Business Alliance, which represents 1,200 firms in the seven-county metro area, has no official position on a bankruptcy filing, said its president and chief executive, W. Brian Hilson. He said he wasn’t in favor.

    “I would prefer the county work through the issues with creditors, begin restoring services and most importantly make the creditors whole,” he said.

    We would expect this from the champion of the Northern Beltline wouldn't we? Mr. Hilson intends to have this ill-gotten road one way or the other.
    What about making the people who had nothing to do with this swindle whole? Doesn't fit your BBA agenda eh Mr. Hilson?

  14. theskinny et al: Exactamundo. BBA, BARD, Balch etc would have browned their britches, methink, if the commission had actually filed for chapter 9. Bankruptcy would have quashed the bond deals these guys so desparately want for their pet projects--Northern Beltline, elevated Hwy 280, and whatever others we don't know about yet.

    And is it possible for the Birmingham News to write more than 3 paragraphs without mentioning the Birmingham Business Alliance or one of its mouth pieces?

  15. Noflush--Nah, they love the greedy bastards waaaaaay too much.

  16. Note to Sheriff Hale: get rid of the f'in lobbyist already.


  17. Max, did you see that Michael Davis has resigned his position with the BBA? Good work!! The news brief is inthe Business section of the Sept 21 Birmingham News. "The Briefcase: Davis Gives Up BBA Role."


IP tracking & BS detector is enabled.
Don't set it off.