BIRMINGHAM, AL (WBRC) - A key player in Jefferson County's bond swap deals has agreed to pay more than $700 million to settle a lawsuit with the Securities and Exchange Commission.
In the settlement, J.P. Morgan Chase & Company did not admit guilt but settled allegations the New York investment bank illegally paid friends of Jefferson Co. Commissioners to land hundreds of millions of dollars in bond work.
"It seems our future is improving every minute," said Bettye Fine Collins, Jefferson County Commission President. She said the settlement should bring the county even closer to ending the sewer debt crisis.
"It shows movement we have been victimized," Collins said.
Under the settlement with the SEC, J.P. Morgan agreed to:
- forfeit $647 million in fees it claims the county owes the company
- pay $50 million to Jefferson County
- pay $25 million in fines
Jefferson County commissioners said the settlement should force all parties in the sewer bond deal to make a new agreement, one that is affordable to all sewer rate customers and taxpayers.
"I think it brings us a step closer to work out a compromise in the best interest of citizens of Jefferson County," said William Bell, Jefferson Co. Commissioner.
Commissioner Jim Carns, who oversees the sewer department, said any new bond deal must only be around $1 billion and be paid off with existing sewer rates.
"That is $3.2 billion we can't pay," Carns said. "We don't have enough customers to pay and we have raised the rates as high as we can raise them and it doesn't work."
If there is no movement towards settling the sewer bond debt, commissioners said they will support taking J.P. Morgan and others to court.
"If they don't go to the mat and fix this, we will sue, we will sue, we will sue," said Shelia Smoot, Jefferson Co. Commissioner. "We are going to get our money back."
Smoot was not named as a defendent in the SEC compliant filed in Birmingham federal court, but Smoot, along with former Commissioners Jeff Germany and Larry Langford are mentioned. The compliant does name Charles LeCroy and Douglas MacFadden, both former J.P. Morgan officials, as those who paid money to friends of those commissioners to get work for JP Morgan.