Report: Problems in municipal bonds cost taxpayers billions

11/2/2009 | Bloomberg

Corruption by local governments and their consultants, kickbacks from banks, a lack of transparency, and mistakes related to municipal bond finance cost U.S. taxpayers as much as $6 billion a year, Bloomberg News concluded in an investigation. Transactions mentioned in a nine-count indictment against CDR Financial Products, its founder and two employees, including wire fraud, obstruction of federal authorities and conspiracy, are only part of the picture. Federal and state laws leave a large portion of the $2.8 trillion municipal bond market beyond the reach of regulation or supervision, Bloomberg found.

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