Mayors arrested
It affects all walks of life. Unfortunately. Today the mayor of Birmingham (Alabama) was arrested in a corruption probe. An investment banker and a lobbyist were apprehended at the same time. The mayor was the head of a commission at the time it engaged in variable rate, auction and bond swaps to raise money to improve its sewer system. The bond deals went sour and could lead to bankruptcy of the city. Moreover, the mayor is suspected to have received over $230k in bribes to grant the business the the banker. The banker’s company would have received fees in the range of $7 million in relation to the $3 billion bond deal. The mayor is accused of telling Wall Street giants JP Morgan, Goldman Sachs, Bank of America and the now-bankrupt Lehman Brothers that they had to include the banker’s investment banking firm on the deal if they wanted to handle the county’s bond work, which they did. In total 20 people, including other county officials, were arrested in relation to the sewer project. Everyone wanted their share, so it seems.
Banks have specific procedures, based on local legislation and/or the Wolfsberg principles, to monitor the financial exposure and transations to clients that are Politically Exposed Persons (PEP’s). This has become a business itself, with companies selling PEP compliance solutions to financial institutions. If you hear someone talk about a PEP light, as I did the other day, you must be overhearing an AML professional. If Marcos and Thaksin are Heavy PEP’s, perhaps this mayor is a PEP light…
http://www.washingtonpost.com/wp-dyn/content/article/2008/04/24/AR2008042402035.html
http://www.reuters.com/article/politicsNews/idUSTRE4B045V20081201
http://www.nowpublic.com/world/former-south-carolina-mayor-arrested-embezzlement
http://www.starnewsonline.com/article/20081110/ARTICLES/811100255/0/ARTICLE
http://www.wolfsberg-principles.com/faq-persons.html
