Los Angeles, CA., Ever since Proposition 13 was approved by the California voters in 1978, there has been a Constitutional provision that public indebtedness must be approved by the voters. In spite of this fact local and regional public officials have been authorizing and issuing billions in controversial, non-voter approved, tax exempt bonds known as COPs, Certificates of Participation. They have been doing so upon the advice of their bond counsels, bond brokers and underwriters all of whom are paid handsome fees for each approved transaction.
Featured in the debate are:
State Controller Kathleen Connell (ret), who says most voters think they have the right to approve public indebtedness when in fact that could not be farther from the truth. “Since the 1980’s governments and schools have been issuing COPs without voter approval”.
Jon Coupal, President of the Howard Jarvis Taxpayers Association: Describes the role of the bond brokers and bond counsels who advise public agencies to issue Certificates of Participation because they make sizable commissions and fees for handling the bond transactions. These fees are paid before the bond money ever reaches the public agencies.
David Tokofsky, LAUSD Board Member: Says the school district legal counsel and bond counsel advised the Board members to issue the bonds without voter approval and he defended the practice saying the voters elected him and therefore the did approve of the bonds, through his vote, representing them.
Anthony Patchett former Belmont Learning Center bond fraud prosecutor described the Certificates of Participation Bonds as “a pyramid scheme” where the voters are totally in the dark. The money is borrowed, the brokers and bond counsel paid and more bonds are issued to pay off the bond previous bonds.