Leo set down his champagne flute.
"What’s wrong, Ethan?" Leo sat up straight. "What happened?"
Ethan walked to the desk and placed a blue folder on its surface.
"It seems we forgot sothing."
Ethan undid the top button of his collar, looking frantic.
"We celebrated too soon, Leo."
"What do you an?"
"Look at this." Ethan pointed to the gold foil lettering on the folder’s cover.
Leo looked down.
The Pennsylvania Local Governnt Unit Debt Act.
"What’s this?" Sarah leaned in, a confused look on her face.
"It’s a noose around our necks." Ethan’s voice was dry. "According to Pennsylvania law, for any local governnt—be it Philadelphia or Pittsburgh—to issue general obligation bonds, especially long-term debt of this magnitude, City Council approval isn’t enough."
"It has to be approved by the State Governnt."
Ethan opened the folder and pointed to a clause heavily circled in red marker.
"All municipal bond issuance plans must be submitted to the Pennsylvania Departnt of Community and Economic Developnt for a review of debt repaynt capacity and fiscal health."
"Only with the approval of the Departnt of Community and Economic Developnt can the bonds be legally sold on the market."
Leo frowned.
He was, of course, aware of the state-level approval process.
But in his mind, it was just a procedural formality. Since the City Council had already passed it, he saw no reason for the state to hold it up.
"Is there a problem?" Leo asked. "As long as our materials are complete and the process is compliant, what grounds do they have to deny it?"
"Our history."
Ethan sighed and pulled another, much older docunt from the folder.
Printed on the docunt’s title were two words in black: Act 47.
"Leo, have you forgotten Pittsburgh’s history?"
Ethan pointed to the title.
"This city once went completely bankrupt due to the collapse of the steel industry and the erosion of its tax base. Back then, Pittsburgh was officially placed on the State Governnt’s list of ’Act 47 Financially Distressed Municipalities’."
"At the ti, an oversight board sent by the State Governnt took control of the city’s finances. Pittsburgh couldn’t even buy a pen without their approval."
"Pittsburgh wore that shaful label for fourteen long years."
"It wasn’t until fourteen years later that Pittsburgh managed to shed that label and regain its financial autonomy."
"But the label is gone now, isn’t it?"
Leo asked, "So what’s there to worry about?"
"To those bureaucrats in Harrisburg, Pittsburgh is like an ex-con with a severely bad credit history," Ethan replied.
"They’re extrely sensitive about our financial situation—neurotic, even."
"Now, an ex-con who just got off parole a few years ago suddenly runs to them and says, ’Hey, I want to borrow five hundred million US Dollars. I’m going to double my debt, and I’m going to conduct so social experints with highly uncertain returns.’"
"What do you think those actuaries sitting in their offices, crunching the numbers, are going to think?"
Before Leo could answer, Ethan said, "They’ll think we’ve lost our minds."
"In their eyes, this five hundred million US Dollars isn’t a hope for revival, but a sign of a relapse into poverty. They’re convinced Pittsburgh is trying to jump right back into the swamp of bankruptcy."
Ethan pulled an official letter with a red seal from the folder and slamd it on the desk.
"And so, just an hour ago, the official rejection letter arrived in our inbox."
"The reason given was insufficient debt repaynt capacity and an excessively high financial risk assessnt. They didn’t even ask for supplentary materials; they just slamd the door shut."
"And to be honest, those actuaries in Harrisburg saw right through the word gas we played in the budget proposal."
"This kind of financial packaging exists in a gray area. If they wanted to help you, they’d call it ’forward-thinking financial innovation.’ But if they want to screw you over, it’s ’an illicit maneuver to conceal true expenditures.’ Unfortunately, they chose the latter."
Ethan’s voice was filled with helplessness.
"Leo, don’t forget who controls the State Governnt right now."
"The governor, the moderate Democrats in the State Assembly, and the career bureaucrats in the State Community and Economic Developnt Departnt—they’re all cut from the sa cloth as Moretti. They are the gatekeepers of the Establishnt Faction."
"In their eyes, you’re an unruly radical. Your progressive platform is a challenge to the very political order they depend on for survival."
"They hate you, maybe even more than they hate the Republican Party."
"They will absolutely not miss this opportunity to legally crush you."
Leo’s fingers tapped lightly on the desktop.
He thought of Sanders.
"What about Sanders?" Leo asked. "He was able to handle the underwriters in Washington. Can’t he put pressure on the state?"
"It’s useless." Ethan shook his head. "Daniel is a Federation Senator. His reach doesn’t extend to Harrisburg. State power is independent. Those local bigwigs don’t have to listen to a Federation Senator. In fact, Sanders’s involvent might even backfire and make them dig in their heels."
"Leo, you need to understand what we’re doing right now. The bulldozers are roaring outside, workers are collecting their weekly pay, and compensation checks are being printed. Where is all that money coming from?"
"It’s from our advanced annual operating funds! It’s the money that was supposed to pay the salaries for police, firefighters, and sanitation workers for the second half of the year! It’s the money to pay City Hall’s utility bills!"
"We are draining this city’s lifeblood. If these bonds aren’t issued on ti and the funds don’t co in, we won’t just have a deficit on our hands. We’ll have a black hole big enough to swallow all of Pittsburgh."
"At that point, it will be far more serious than just our promises turning out to be empty."
"We will paralyze the entire city. We will be pilloried for causing the governnt’s de facto bankruptcy. We will beco the sinners of Pittsburgh."
The joyful feeling of victory from monts before vanished without a trace.
They had summited the great mountain of the City Council, only to find a deeper, more impassable chasm before them.
This chasm was called institutional mory.
Pittsburgh’s past failures had beco the shackles binding its present.
’This is the price of bankruptcy.’
Roosevelt’s voice echoed in Leo’s mind.
’Credit is sothing that takes a hundred years to build, one day to destroy, and rebuilding it is harder than climbing to heaven.’
’Those people in Harrisburg aren’t trying to give you a hard ti. They’re afraid.’
’They’re terrified that if you fail, the State Governnt will once again have to shoulder the massive financial burden of Pittsburgh. They don’t want to live through the Act 47 nightmare again.’
Leo closed his eyes, conversing with Roosevelt in his mind.
’So we go to Harrisburg? Negotiate with the auditors? Show them our resolve?’
’Of course not.’
Roosevelt’s voice was firm.
’You can’t convince a group of bureaucrats whose entire profession is "risk aversion" to take a risk. In their eyes, your resolve is worthless, and your plan is just a pie in the sky.’
’Since they fear risk, we’ll give them a sense of security.’
’Since they don’t trust Pittsburgh, the ex-con, we’ll find soone they absolutely trust to guarantee Pittsburgh’s five-hundred-million-dollar debt.’
’We need an endorser.’
’Soone with massive assets and impeccable credit.’
’If this person is willing to step up and say, "I believe in this plan, and I’m willing to back its returns," then all the red lights will turn green.’
Leo’s gaze passed through the floor-to-ceiling windows, settling on the brilliantly lit city skyline outside.
In the heart of the city, a skyscraper was still lit up.
The massive sign on its roof flickered in the night.
Morganfield Industrial Group.
He picked up the draft of the budget proposal from the desk.
On the long list of projects, besides community redevelopnt, school renovations, and worker cooperatives, lay a quiet but massive expenditure.
Phase One Startup Capital for the Inland Port Expansion.
That was the bait he had planted, and the trump card he had held back.
"Looks like I have to make good on that promise."
Leo stood up and straightened his suit.
"Ethan, get the car ready."
Ethan paused for a mont. "Where to? It’s so late."
"To see our old friend."
Leo looked at the skyscraper.
"Since Harrisburg doesn’t trust the Mayor’s credit, we’ll let them see the credit of capital."
"I’m going to see Douglas Morganfield."
"If he wants to eat the at, he’ll have to help set up the pot first."
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