Wagner recently notified Pennsylvania school districts to avoid interest-rate swaps, and to terminate any contracts they might have, after his special investigation determined that swaps approved by the Bethlehem Area School District cost taxpayers at least $10.2 million. The investigation also found that 107 of 500 school districts, or 21 percent, and 86 municipal governments had $14.9 billion in public debt tied to interest-rate swaps.
Interest rate swaps are essentially bets on the movement of interest rates on bonds issued by the school districts.
Hat tip to Matt Taibbi at True Slant.
Disclosure: No positions.