Largest-Ever Bankruptcy for U.S. County?

" Sort of related to what's been happening nationally accounting and Alabama and how could file the largest ever bankruptcy. For a local government -- Orange County. Jefferson county. Encompassing the city of Birmingham Alabama struggling under the weight of a four billion dollar debt stemming from a series of bad on transactions that were made years ago and there are some indictments we should mention in relation to those joining me now. On the phone for Birmingham -- county commissioner. Jim cards commissioner currents thank you for joining us I'm so sorry to hear about this pending bankruptcy isn't a done deal that that you are going to go into chapter nine."

" God -- not a done deal right now we have five commissioners and three of the battles are still low hoping for a miracle I'm trying to be what I would think would be pragmatic we have. Break one man billion dollars in debt. I'll we have 460 million dollars the planned. On. Our revenues are sure about revenues and they grow. Revenues are roughly a 190 -- about a year."

" Well there are there are precedents for miracles but they don't happen every day -- what kind of miracle. Are you realistically hoping for."

" They don't murder plot worked last year for the first six months to try to avert bankruptcy because Jeff -- was leading the pack before. The carnage started don't Wall Street and we did not want debate. Quote quote the next aren't happening because everybody still remembers that even though. Aren't Gannett would have eleven or twelve months was doing band after they placed their problem and blow through it and got it and Hillary Rivero."

" That's true they did we should mention by the way that was in 1994 and it's Orange County California. That was a one point seven billion dollar bankruptcy of course yours would eclipse that by about two or three billion dollars but we should mention sir that. The former mayor of Birmingham -- Larry Langford. And an associate to associates actually. Have pleaded not guilty to charges of 101 count charge against them. Off for situations in which they bought these interest rate swaps that kind of led up to this bankruptcy correct."

" Right he was the one that's got the charges against them that still we have only gets -- state court in. Very Debra will be presented but. He was president -- the county commission probably trying to go to it 2006. And in 2007. He is that Karl -- Birmingham but is. The thing that they is being charged forward some things that happened during his tour -- as they county commissioner."

" note to go to but I -- sort predates is is that ten years as mayor but these interest rate swaps. Frankly I've I've studied this stuff in the past and it makes my head spin but. They're very complex. Financial instruments and again it's like the CDOs in the NBS's and all the other alphabet soup financial instruments everybody was getting greedy they get they get make a quick buck right --"

" Truth and you know. Most folks and they held at interest rates swaps. In their portfolio will be counterfeit bank percent of their portfolio. And what I inherited when I was elected the county commission and -- did not 2006. Is that we had at the time three point two billion and many or percent of that was swaps."

" Wow nine these were percent of trucks and of course these are these are these derivative instruments that are risky and good times but in bad times. They're worth practically nothing now assume the worst that you don't get your miracle and you're going to chapter nine. How do you work your way out of it and specifically. How do you go about placing bonds if you needed to build sewer systems are high razor roads or whatever."

" Well all of that is the problem men. You know probably where you were and a straitjacket was certainly good -- thing under current financial position that's why I feel like. We need to might get a you know a strong move to start resolving this. Because at some point in the not too distant future there will be additional funds required through. The way you most counties and states -- city raise funds and has through bonds."

" Now we pass this humongous stimulus bill of almost 800 billion dollars. Are you -- get any piece of that."

" Yes I would like to -- we're not gonna get any we're we're we have received zero hope. --"

" from home. Parted from home have you received zero local told he can't get it."

" Well the people it are representing our area air to US senators and our two cars have not been in favor of -- Jefferson county and one of the reasons I might add them. They've spent 25 and possibly -- convictions of either elected officials. County employees or suppliers. So. That it has -- You know Wall Street. All of -- more money than they should that we could ever buy back the great."

" Also essentially this 660000. Residents of Jefferson county. Have to stew and in in an awful soup that was created by just a handful of people."

" Best group and only 55% of the -- is almost sure. So revenue Mike Hsu they were so it's really all. Jail for a million dollars now they want three point two -- a roughly 700 million was thrown into. The that makes last week when JPMorgan. They've Manning -- Lennar interest rates swaps the big -- you. Are they -- interest rates swaps. Gong to roughly 700 million -- they had been up as high as one point three billion."

" Commissioner we gotta go but I just going to ask a final question when you hear about all these hundreds of billions of dollars being thrown around. Money 78 billion apparently was wasted in the first chart and when you realize how how much just a small piece of that would help you what does that make you feel."

" I this would have been wonderful that we could about it our citizens -- again here and some on this I didn't do it there's this is still on polling as far as the legalities of it. I guess sometime and next hopefully 24 months we'll have a a clear picture of exactly. They did want to boom and now will be -- of that but and they and are we need to go ahead and get a direction and only direction actually would be. A bankruptcy plan to do they cram down again and bent down to. But the point one point want -- want all five billion and we can afford that do you think more than that we can't afford."

" Or we wish you the very best commissioner cars as a people should not suffer because of a couple of really greedy at. At best and crooks at worst groups of people Jim -- and Tim Wagner associate Bobby Humphreys as well we wish you the very best are okay thank you very much thanks a million."