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Resource ID: #22992
Subject: Schools
Source: Bloomberg News (New York)
Affiliation: 
Date: 11/2006

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Description

Tax-exempt deals that provided $7 billion in bonds for low-income housing or inner-city schools turned out to be another way for banks and advisers to make money. Bloomberg investigates situations such as a deal in which JPMorgan Chase and Co. and American International Group "pocketed fees, along with their advisers, totaling $12 million." AIG and CDR of Beverly Hills actually had a deal "in which the financial firms made more money and faced less risk if none of the $220 million in bond funds was used by the public. None of it was." There were 70 other such deals across the country in Florida, Georgia, Oklahoma, Illinois, Wisconsin and Missouri. The investigation also includes similar situations of schools being neglected while insurance companies, banks and advisers profit.

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