Abstract
On Nov 9, 2011, Jefferson County, Alabama filed Chapter 9 municipal bankruptcy. With total debt totaling $4.6 billion, including $305.5 million in general obligation bonds, $814.1 million in limited obligation school warrants, and $3.14 billion in sewer revenue bonds; Jefferson County's filing eclipsed Orange County, California's $1.7 billion 1994 Chapter 9 filing as the largest municipal bankruptcy to date in the history of the US. Jefferson County's debt exploded between 1997 and 2003 as it issued revenue bonds to finance its sewer rehabilitation program in compliance with a 1996 Environmental Protection Agency consent decree overseen by the federal courts. Jefferson County, Alabama's elected officials assumed an unpayable amount of debt repairing a sewer system that had been neglected for upwards of 100 years. How much of this debt was actually necessary will probably never be known. What is known is that a large sum of the debt was incurred to fund construction contracts selected as the result of bribery and then refinanced under terms that were also the result of bribery.