How to cure a municipal bond default with terrorists

By Felix Salmon
May 12, 2009

Becky Shay reports on an empty prison in Montana:

The $27 million facility, which was built with revenue bonds, went into default last year. Bond payments are being made out of a reserve fund, which will have to be replenished and payments made, once revenue starts.

Smith said the bond holders are sticking with the project because the long-term risk outweighs selling the facility for cents-on-the-dollar in foreclosure.

Smith and others continue to look for out-of-state contracts, including a multiyear deal with Alaska, which is looking for space as its contract to house prisoners in Arizona comes to an end.

As part of the search for contracts, TRA’s board and the Hardin City Council decided – both unanimously – to seek the Guantanamo detainees.

Clearly the US government shouldn’t even be thinking about sending the Gitmo prisoners back to Yemen. After all, there are foreclosures to avoid right here in Montana!

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