It's always nice to get extra money — especially in tight economic times and especially-especially when it comes as part of a settlement to a major bid-rigging scheme that authorities said victimized government units, schools and organizations.
Attorney General Kathleen G. Kane recently announced that settlements reached over the past year with Union Bank of Switzerland, JPMorgan Chase, Wachovia, Bank of America, and GE Funding Capital Market Services will send more than $1.9 million to the scheme's Pennsylvania victims. Montgomery County will get $220,046.88, the second-largest in the state. The Pennsylvania Housing Finance Agency will get $749,326.66. Others sharing the settlement in Pennsylvania include Children's Hospital of Philadelphia, Swarthmore College, and the Pennsylvania Turnpike Commission.
Union Bank of Switzerland came up with a scheme that involved "the marketing and sale of municipal derivative investments," Kane said, "which are often used by government agencies and nonprofit groups to reinvest the proceeds of tax-exempt bonds until those funds are needed."
Investigators from multiple state attorney general offices and federal agencies are conducting a nationwide investigation and have found that "banks, brokers and financial service firms manipulated the bidding process and shared information. Those actions caused victims to pay higher fees and receive lower interest rates," Kane said in a press release.
Montgomery County Commissioner Josh Shapiro was grateful the state attorney general pursued the settlement, saying that “Because of past bid rigging, our county paid more for services than we should have and our taxpayers were harmed.” He said the money will help address critical needs such as infrastructure, human services and public safety.
“We’re very happy to be receiving this money that we can use to support our affordable housing programs," said Brian Hudson, executive director and CEO of the Pennsylvania Housing Finance Agency. "We have a statewide network of housing counseling agencies and this money will be used to support their consumer education efforts.”