I remember this case, and my spread argument doesn't really apply.
I'm further curious why the municipality representatives aren't being investigated. I'm also hesitant to blame the banks, as it really looks like the fraud was with CDR. The banks theoretically should refuse to do business, but it's hard to blame anyone for taking advantage of a deal when it's offered. I'd like to see more detail in the kickbacks.
They give an example of
"But if the account was full at the start of the deal, GE may have cheated the county out of as much as $87,600 a year to start.
In any case, GE certainly chiseled the Pennsylvanians out of a sizable sum, because soon after, the company paid CDR a kickback of $57,400 in the form of "fees" on a swap deal.
So, that's a net $30,000 for GE. That's a HUGE risk for a tiny reward. It certainly doesn't sound systemic.
Also, it says, "Utah lost out on 10 basis points, GE bilked the state out of untold sums, and CDR got another nice kickback."
Well, no. The sums are certainly a matter of record. So, I'd be interested in another version of the story.