Is Stockton, California really bankrupt?
Jul 11, 2012
What about their $694 million CAFR fund?
Recently, Stockton, California filed for bankruptcy. This means that many companies who have provided services for the city will not get paid. If anyone has bought municipal bonds from Stockton, they may lose their investment.
Why? Are they really out of cash? No, they have plenty in their hush-hush "rainy day fund" that appears only in their second set of books known as CAFR. The attorney handling the bankruptcy case, David E. Mastagni, has requested Stockton's 2011 CAFR report, which was supposed to be issued last December. However, the city has delayed this report for the past 6 months, probably because this would expose the fact that they do not need to declare bankruptcy.
Stockton's 2010 CAFR report showed that the city had $694 million in its investment funds with large corporations, supposedly for a rainy day. Of that figure, $208 million was in liquid funds. So says Foster Gamble:
(At about the 4 minute mark, the above report also shows a news clip from the mainstream media. This is important for those who do not believe that these CAFR accounts actually exist. The City Council never once claims that the CAFR account is fictitious. They say that it usually comes by December 1st, but that they have never seen it arrive this late. They promise to send a copy to the attorney shortly.)
Well, if a bankruptcy is not a rainy day, I don't know what is. It seems that they would rather not pay their obligations than dip into their investment funds.
Of course, the implications of this are enormous. First, there is probably no need for any large city in California or elsewhere to EVER file for bankruptcy and stiff those who have bought municipal bonds. Second, this money is obviously being skimmed by big financial institutions to strengthen their own balance sheets. They may not technically OWN these funds, but they are certainly being given the USE of those funds without the consent of the taxpayers.
Third, the City Council of Stockton (and probably others) KNOW about the CAFR's and yet were still willing to declare their city bankrupt. I would guess that they were willing to blame their bankruptcy on the "bad economy" and "too low tax rates." Their solution has probably been to try to raise taxes, instead of dipping into their secret investment fund.
The Stockton branch of Mystery Babylon needs to repent of its thefts (Rev. 9:21).
Dr. Stephen Jones