OC Politicos Harsh San Mateo County's Bailout Mellow
San Mateo County officials who went to Congress Tuesday seeking a federal bailout of funds lost in its investment portfolio with Lehman Brothers, which the Bush administration allowed to fail in what would become the largest bankruptcy in U.S. history, got the financial equivalent of a cock block from their Orange County counterparts.
However, the Northern California county, like the other governments, received skeptical questions and talk of "bailout fatigue" from legislators, reports the San Jose Mercury News. That was particularly the case with Republicans, and especially those from Orange County, which in 1994 suffered the largest municipal bankruptcy in American history. "The federal government can't be the savior for all things that fail," said Rep. Ed Royce (R-Fullerton). The Lehman collapse had a devastating impact on individuals and pension funds that were not getting any federal help, added Rep. John Campbell (R-Newport Beach)
Orange County treasurer Chriss Street testified that his government worked its way out of its $1.5 billion bankruptcy "without a bailout or intervention," warning, "If you bail out certain investors in Lehman, you'll have to bail out others."
San Mateo County officials who went to Congress Tuesday seeking a federal bailout of funds lost in its investment portfolio with Lehman Brothers, which the Bush administration allowed to fail in what would become the largest bankruptcy in U.S. history, got the financial equivalent of a cock block from their Orange County counterparts.Noting that the U.S. Treasury has rescued more than 535 financial institutions with $590 billion, several local governments asked a House panel and Treasury officials to cover their losses. The San Mateoans said they just required a measely $155 million to make things right again.
The OC delegation's let-them-eat-it comments drew a sharp rebuke from Jackie Speier, the Democratic congressman whose district includes San Mateo. She said there was a big difference between Orange County, which had invested in risky derivatives, and San Mateo, which operated under tighter investment rules instituted as a result of OC's financial free-fall.
"It's not like these government bodies were using taxpayer funds to speculate in the market," Speier said. "It's ironic that if they had invested in credit default swaps with AIG they wouldn't have to be here today."
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