On the Web site for Birmingham, Ala., Mayor Larry Langford promises to make the city the best of the “New South.” But the Department of Justice says Mr. Langford’s political ambition is geared more toward old-fashioned corruption.
The details released with a 101-count indictment Tuesday included all the hallmarks - the politician, the rich businessman and the lobbyist who helped grease the skids. Add a modern-day twist: a county government on the verge of the biggest municipal bankruptcy in history with $3.2 billion in debt.
“It was a classic pay-to-play scheme,” said Alice Martin, the U.S. attorney for Northern Alabama whose office is prosecuting the case.
Mr. Langford, 62, was elected mayor of Birmingham last year, but from 2002 to 2006 he was president of the county commission of Jefferson County, which encompasses Birmingham. During his time as county commissioner, the indictment charged, Mr. Langford accepted thousands of dollars worth of clothes, jewelry and other gifts on dozens of occasions from a lobbyist friend and a wealthy investment banker.
In exchange, the prosecutors say, Mr. Langford helped shepherd complicated financial agreements that made his associates hundreds of thousands of dollars at a time. Over the years, according to the indictment, the Remon’s clothing, Rolex watches and expensive loans added up to about $235,000.
Investment banker William Blount, 55, meanwhile, is accused of making $7 million from bond underwriting and interest-rate swaps related to debt owed by Jefferson County on a sewer project mandated by the federal government to protect the environment. Lobbyist Albert LaPierre, 58 and an old friend of both Mr. Blount and Mr. Langford, made $219,500 for helping facilitate the deals.
The scheme appears to have helped to ravage the county’s finances. According to the Birmingham News, the county cannot keep up with the interest on its $3.2 billion debt stemming from the project and its bond rating had been dropped to “junk” status.
A default would easily dwarf the $1.7 billion Orange County, Calif., owed before declaring bankruptcy in 1994, which is currently the largest municipal bankruptcy in history.
Mr. Langford, Mr. Blount and Mr. LaPierre are charged with bribery, conspiracy and tax evasion. The men, who have denied any wrongdoing, face decades in prison if convicted.
Mr. Langford dismissed the charges as politically motivated, accusing Miss Martin, a Bush appointee, of targeting him because he is a Democrat.
“This is certainly no surprise to us - we anticipated something happening soon especially knowing Alice Martin’s days in office are numbered with the swearing in of a new president in late January - just a little over a month from now,” said a statement released by his office. “We are glad the mayor will finally have his day in court.”
The indictments follow a lengthy investigation; a preview of the accusations was included in a lawsuit filed in April against the three men by the Securities and Exchange Commission. The men are seeking to have the lawsuit thrown out, and a hearing on a motion to dismiss is scheduled for next month.
According to the complaint in that case, Mr. Langford and Mr. LaPierre have known each other for nearly 30 years. Mr. LaPierre and Mr. Blount have known each other for about as long. At one point, Mr. Blount was chairman of Alabama’s Democratic Party and Mr. LaPierre was the executive director.
The three politically connected friends would meet for dinner almost every Wednesday at a restaurant in Birmingham. According to the complaint, Mr. Langford accepted the bribes around the times they met for dinner.
Along with the gifts, according to the complaint, Mr. Langford accepted a $50,000 loan in 2002 to help pay down the $70,000 he owed in credit-card debt and department-store bills.
Despite his poor credit rating and debt, Mr. Langford received the loan after Mr. Blount made a call to his girlfriend, who was a high-ranking official at the bank that made the loan.
But that didn’t help Mr. Langford climb out of debt. According to the complaint, Mr. Langford didn’t have the money when the loan came due six months later, but Mr. LaPierre took out a $50,000 loan of his own to pay his friend’s debt.
A few weeks later, according to the complaint, Mr. Blount’s company made $252,000 when Mr. Langford’s commission chose it to be the lead underwriter on a $94 million bond.