I am often amused by the progressive bias [in favour of] smaller [investment banking] firms [and against] megabanks.

It was the good old boys at the smaller firms that JP Morgan and other banks used to gain access to local officials in [the Jefferson County, LA, billion-dollar municipal bond fraud] and other frauds, and the people at those smaller firms had already been deeply entrenched in corrupt schemes with public officials for decades.

In their first experiment with Jefferson County, [Charles] LeCroy and Douglas MacFaddin, managing director of JP Morgan’s municipal derivatives unit, focussed their efforts on two commissioners, and mostly on Commissioner Jeff Germany. These commissioners had not been reelected and wanted to execute a $1.8 billion debt refinancing before they left office in November in order to direct payments to people who had supported their campaigns – specifically through Gardnyr Michael and ABI Capital, two local broker-dealers.

In fact, … these smaller firms played the megabanks off of each other, which only increased the cost of the schemes to taxpayers.

Bond Girl (@munilass)

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