Ohio has been caught up in another case involving JPMorgan Chase which affects our economy and the ability for the state and local municipalities to create jobs and income for Ohio residents. JPMorgan Chase is going to pay out in total $211 million, a number that is so high I can’t even imagine what that amount is, after admitting that one of its divisions rigged dozens of bidding competitions to win business from state and local governments. Unbelievable!
Bid rigging means that the bidder has a chance to see competitors bids before the final bid is cast, giving the bidder an unfair advantage on the bid. Why is this bad for states?
Banks help municipalities invest the money they raise from bond offerings to earn interest before they use the money for various projects. Competition allows the municipality to earn the best yield possible. By bid rigging, the competition is not real, and it denies the municipality the best yield resulting in less income earned.
Complaints were filed by the SEC, the IRS, bank regulators and state attorneys general. Part of the money is paying off a civil fraud charges. From this amount of money, Ohio will receive $1.2 million, and the City of Cleveland, the Columbus Regional Airport Authority, and the Ohio Public Facilities Commission will also receive money. Just one more case of the big banks taking money out of taxpayers pockets that has contributed to the economic recession.