Long Beach Supports The Restitution for Local Government Act

The City of Long Beach has expressed its strong support of HR 5125, a proposed federal law -- the Restitution for Local Government Act of 2010. This piece of legislation will amend the Emergency Economic Stabilization Act of 2008 to establish a fund to be used to make local governments whole for losses incurred from the Lehman Brothers Holding, Inc., bankruptcy on September 15, 2008.

Over 40 municipalities across the country had invested $1.3 billion of operating funds in highly rated Lehman commercial paper. The City of Long Beach had invested nearly $20 million of investment pool funds in Lehman. Long Beach had no way to recoup what was presented as secure commercial paper investments.

This legislalation proposes to redirect profits made by the US Treasury from repaid TARP funds to Long Beach and other local governments suffering from Lehman's collapse.