AUTHOR NAME
10 Years Later, People Are Still Living in Toxic FEMA Trailers (MuckReads Weekly)
Some of the best #MuckReads we read this week. Want to receive these by email? Sign up to get this briefing delivered to your inbox every weekend.
People are still living in FEMA's toxic Katrina trailers — and they likely have no idea (Grist)
People are still living in toxic FEMA trailers and they likely have no idea http://t.co/hDBSjRvF3C pic.twitter.com/ZFPdPm1H1v
— grist (@grist) August 27, 2015"In late 2008, FEMA had quietly sold about a thousand Katrina trailers and mobile homes as scrap; six months later, they were spotted in mobile home parks in Missouri and Georgia. ... The stickers that read 'NOT TO BE USED FOR HOUSING' were gone from the trailers almost as soon as they left the auction lot, though none of the buyers would admit to removing them."
How companies make millions off lead-poisoned, poor blacks (The Washington Post)
Unbelievably predatory: How companies make millions off of lead-poisoned, poor blacks http://t.co/HBIDccANcK @terrence\_mccoy #muckreads
— Rachael Bale (@Rachael_Bale) August 26, 2015"One 24-year-old lead victim sold nearly $327,000 worth of payments, which had a present value of $179,000, for less than $16,200 — or about 9 cents on the dollar. Another relinquished $256,000 worth of payments, which had a present value of $166,000, for $35,000 — or about 21 cents on the dollar."
Arrests for minor crimes spur resentment in some Baltimore neighborhoods (The Baltimore Sun)
Over the past 10 years, the number of arrests expunged in Md. has doubled: 16,677 in '05 to 33,357 in '14. http://t.co/khji8BDUG7 #muckreads
— Pete Sweigard (@petesweigard) August 24, 2015"Some residents complain that 'clearing the corner' — a practice of making arrests on minor offenses to disperse people in drug-infested areas or to investigate more serious crimes — is a law enforcement strategy that continues to harm residents and has contributed to a distrust of police. Though charges are often dropped by prosecutors, the arrests can remain on records for years."
Katrina washed away New Orleans's black middle class (FiveThirtyEight)
.@bencasselman looks at shifting New Orleans demographics since Katrina, factoring in income. http://t.co/7ECE8zgjY8 pic.twitter.com/h9fzmNrAtx
— Alyson Hurt (@alykat) August 25, 2015"African-Americans have long accounted for most of the city's poor, but before the storm they also made up a majority of its middle class and were well represented among its doctors, lawyers and other professionals. After Katrina, the patterns changed: The poor are still overwhelmingly black, but the affluent and middle classes are increasingly white."
Small group goes to great lengths to block homeschooling regulation (ProPublica)
Wow, this is a scary piece. "[the #homeschool lobby] make the anti-vaxxers seem rational." http://t.co/KjPnqia140
— Morgan Baden (@MorganBaden) August 27, 2015"...the group has three 'bedrock' concerns — not only homeschooling, but also parental rights and religious freedom. In Washington, the group's efforts blocked laws that would have allowed grandparents to petition for visitation rights, claiming that such policies made it possible for disapproving grandparents to stop children from being homeschooled."
Police secretly track cellphones to solve routine crimes (USA Today)
Here's the background: Police used stingrays to solve routine crimes, then concealed that surveillance in court. http://t.co/IsmaJXM6Eu
— Brad Heath (@bradheath) August 28, 2015"The records show that [Baltimore] police used stingrays to catch everyone from killers to petty thieves, that the authorities regularly hid or obscured that surveillance once suspects got to court and that many of those they arrested were never prosecuted. Defense attorneys assigned to many of those cases said they did not know a stingray had been used until USA TODAY contacted them, even though state law requires that they be told about electronic surveillance."
Top Tobacco Bond Banker Departs Barclays
The go-to dealmaker in the market for tobacco bonds is gone from her post – a surprise departure that raises questions about the future direction of a once-burgeoning corner of Wall Street.
Kym S. Arnone, a senior banker who, by her own count, helped engineer more than $40 billion of tobacco bond deals, is no longer with Barclays Capital, a bank spokesman confirmed last week.
The reasons for Arnone’s departure are unclear. Some clients contacted by Barclays said they had been told the separation was “mutually agreeable” but not whether Arnone was joining a competitor. Bankers at competing firms also told ProPublica they were not aware if she had been hired elsewhere. Arnone did not respond to calls and emails, and the Barclays spokesman would not provide details.
Tobacco bonds had been a hot segment of the $3.6 trillion market for municipal government debt. A 1998 legal settlement with cigarette manufacturers created demand for bonds, which netted upfront cash for state and local governments that were promised billions of dollars in future payments to compensate them for health-related costs of smoking.
How Wall Street Tobacco Deals Left States With Billions in Toxic Debt
Politicians wanted upfront cash from a legal victory over Big Tobacco, and bankers happily obliged. The price? A handful of states promised to repay $64 billion on just $3 billion advanced. Read the story.
Q&A: The Hidden Costs of Tobacco Debt
Even when taxpayers aren’t explicitly on the hook, tobacco bonds can cost states and local governments money. Here’s how it works.
As ProPublica reported, tobacco bonds were a booming business from 2005 to 2008, when bankers like Arnone persuaded dozens of settlement recipients to borrow against their cut of the accord, sometimes for pennies on the dollar. These days, few new deals are coming to market. The most recent, a $750 million Louisiana transaction we wrote about in April, failed to get state legislators’ approval.
Instead, governments have been retooling past tobacco bond issues that are heading for default thanks to bankers’ use of a risky form of borrowing known as capital appreciation bonds, or CABs. These bonds typically carry higher interest rates and require big balloon payments, often decades in the future.
Last year, Arnone engineered a bailout of two such bonds sold by New Jersey. As we reported, a hedge fund cleared a $100 million profit on its holdings of the rescued bonds, which were expected to default.
New Jersey officials said the rescue was a good deal for taxpayers even though the state had to pledge about $400 million more of its future tobacco settlement money to prop up the bonds. They were part of a larger tobacco bond issue that Arnone handled for the state back in 2007.
Since October 2014, Arnone has served as chair of the Municipal Securities Rulemaking Board, the industry’s self-regulator. A spokeswoman for the MSRB said Arnone would continue to serve out her term as chair of the MSRB’s board until her term expires on Sept. 30. As chair, Arnone is paid $80,000.
Read more of Cezary Podkul’s coverage of tobacco bonds.
