Thursday, August 17, 2006

It's not nice to fool bond rating agencies

Word is that some Milwaukee County officials are sweatin' bullets over a new financial book review. Sources say allegations have been made that the county tried to pull one over on one or more bond rating agency by moving trust fund money into a general revenue account to make it appear to the rating agency (ies) that the county had more general revenue (the most easily spent kind of money) than it actually did. When the rating agency dog 'n pony show was over, the money was put back into the trust fund, according to the allegations.

If the allegations are true, this is a very big deal. Making a good presentation to bond rating agencies is a critical piece of government business because the presentation directly affects the government's bond rating, which in turn directly affects how much interest on debt the government pays. Cheating on the presentations and presenting materially false information would be frowned on by many including, potentially, prosecutors.

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