BIRMINGHAM, Alabama (Reuters) - Federal authorities arrested the mayor of Birmingham, Alabama, on Monday in a corruption probe surrounding a sewer bond debt that could lead to the largest municipal bankruptcy in U.S. history.
Authorities arrested Mayor Larry Langford in Birmingham at 7 a.m. (1200 GMT) and charged him with 60 counts including bribery, money laundering, conspiracy and filing false tax returns, according to U.S. Attorney Alice Martin.
Langford was charged along with investment banker William Blount and lobbyist Al LaPierre for a total of 101 counts. The government said it was also seeking $7.6 million in forfeiture from the three men.
Blount's company profited from collecting fees recommended by Langford in the sewer bond transactions, Martin said.
Birmingham is the largest city in Alabama's Jefferson County, which is fighting to stave off bankruptcy over what is now a $3.2 billion sewer debt.
Langford, a Democrat, was the head of the Jefferson County commission at the time it engaged in variable rate, auction and bond swaps to raise money to improve its sewer system.
"He sold out his public office to his friends Blount and LaPierre for about $235,000 in expensive clothes, watches and cash to pay his growing personal debt. All the while, Blount was paid fees topping $7 million," said Martin.
"Through a web of financing agreements Langford required many institutions to use Blount as a consultant so Blount would make fees and in turn pay off Langford," Martin told a news conference, adding: "It was a classic pay-to-play scheme."
Langford's office said the arrest was "no surprise."
"We are glad the Mayor will finally have his day in court. As members of his team, we stand behind him and look forward to the day when we can return the focus to the important issues before the city," Langford's chief of staff, Deborah Vance-Bowie, said in a statement.
He was later released on a $50,000 bond.
In May the U.S. Securities and Exchange Commission filed a lawsuit accusing Langford of receiving and not disclosing a $156,000 illegal payment.
Langford sat on Jefferson's county commission from 2002 to 2007 and was its president. He became Birmingham mayor in 2007.
Additional reporting by Peggy Gargis; writing by Matthew Bigg; Editing by Tom Brown and Sandra Maler