Yet another example of the fabulous “innovations” that our modern financial industry have given us.

It turns out that when Atlanta had a bond issue, they went to a consultant to review the bids, and this consultant, David Rubin, ruled out the winning bid, costing the City $58,000 by going with the runner up Bank of America.

The problem was that David Rubin had a piece of that Bank of America action, and was not working to the best interests of the city:

Only after the Internal Revenue Service investigated five years later did local officials learn that Rubin’s firm, CDR Financial Products Inc., had entered into a secret side agreement with the Charlotte, North Carolina-based bank. CDR’s share would be worth as much as $340,000, based on city and federal records.

“IRS believes that CDR, Bank of America and possibly others may have colluded to fix pricing,” an unidentified Atlanta employee wrote in an undated internal memorandum after city authorities met with IRS investigators in September 2005.

This is a theft of honest services, a felony, and likely a RICO violation too, and it looks like Mr. Rubin is going to jail.

The real problem here is that municipalities are entering into agreements which are too complex for them to evaluate, and so their taxpayers are getting done like a drunk sorority girl on prom night.