Instead, Cox has self-righteously placed blame on the victims:
"... school district officials have a responsibility... to ensure their advisors are actually independent..."
".. there is an obligation to get good independent advice..."
Bluntly, non-knowledgeable, unpaid school board members have obligations. Highly knowledgeable, highly paid bankers have no obligations except to grow rich at the expense of American taxpayers.
In Erie, the school board did ask the JPMorgan Chase representative how much his bank would make in fees. The answer:
"I can't quantify that for you."
In the Erie case, the advisor wrote a two-page opinion letter concluding the deal was "fair". The letter didn't disclose which party was being treated "fairly" or how much JPMorgan Chase's fees would be.
For it's two-page letter, the financial advisor was paid $60,000. A bond insurer was paid $57,585 and lawyers and other participants split $106,000, presumably in fair and equitable fashion.
JPMorgan Chase kept about $1 million for itself and justified the transaction by noting:
"...the swaps were vetted by independent financial advisors..."
Enabling Legislation.
This scam was made possible by a Pennsylvania law enacted in 2003 that expressly gives local government agencies, including school districts, authority to purchase interest-rate swaps.
The selling point for this overwhelming endorsement was less than candidly explained by a lobbyist:
"There could be huge cost savings for many of the local governments."
Lobbying by financial advisory firms who would profit by advising municipal clients might possibly have influenced the vote. Those firms included a lobbyist representing bond underwriters who contributed $141,245 in the prior three years and then claimed:
"The donations weren't tied to the legislation."
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