updated 12/1/2008 3:13:11 PM ET 2008-12-01T20:13:11

The mayor of Alabama's largest city, Larry Langford, was arrested Monday on federal bribery and fraud charges connected to a multibillion-dollar sewer bond deal that has driven the surrounding county to the brink of bankruptcy.

Federal prosecutors in Birmingham said Langford, Montgomery investment banker Bill Blount and lobbyist Al LaPierre were charged in the 101-count indictment released Monday. The charges also include money laundering and filing false tax returns.

Langford is accused of receiving $230,000 in bribes from Blount, some of them routed through LaPierre, to influence the bond deals while Langford was president of the Jefferson County Commission. Blount's firm made $7.1 million in fees from the bond work.

The indictment says Blount paid $219,500 to LaPierre for his help.

Langford and LaPierre pleaded not guilty in a court appearance and were released on $50,000 bond each. Blount arrived later at the courthouse to surrender.

The three men also have denied any wrongdoing in the face of similar allegations contained in a civil lawsuit by federal regulators.

Langford, 62, was taken into custody around 7 a.m. Monday, FBI spokesman Paul Daymond said. Langford was president of the Jefferson County Commission before he was elected mayor last year. Birmingham is in Jefferson County.

County nearly bankrupt
The county is trying to avoid filing what would be the largest municipal bankruptcy in U.S. history over $3.2 billion in debt for sewer bonds, nearly double the record of $1.7 billion set in 1994 by Orange County, Calif.

Jefferson County's bonds went sour as the mortgage crisis hit and banks tightened up on lending, sending credit costs for the bonds skyrocketing.

The Securities and Exchange Commission accused Langford in a lawsuit of taking more than $156,000 in undisclosed payments and benefits from Blount and routed through LaPierre.

The mayor's chief of staff said city business would go on as usual. In a statement, Deborah Vance-Bowie also said the indictment of Langford was "certainly no surprise to us" and that they had expected some action from U.S. Attorney Alice Martin as she nears a possible end of her appointment with the swearing in of a new president in January.

"We are glad the mayor will finally have his day in court," the chief of staff's statement said.

Langford has said the investigation was politically motivated. He contends Martin, who was appointed by President Bush, has targeted Democrats.

Langford, who was elected mayor in a nonpartisan vote, was a Democrat when he served on the commission and identifies himself as a Democrat. Blount, 55, is a former state Democratic Party chairman and LaPierre, 58, is a former state Democratic Party executive director.

Political motives denied
Martin has denied any political motivation behind her office's investigations and prosecutions.

Langford has drawn attention for a series of colorful stunts since taking office last year, many of which are aimed at trying to turn around an old steel city-turned-medical hub.

He walked into a business meeting with two police officers carrying submachine guns, props meant to generate interest in his "top secret" finance plans. He also announced a longshot bid to bring the 2020 Olympics to Birmingham, and his critics have even gone as far as to call him "Mayor LaLa."

The former promoter and television reporter has been unapologetic about his conduct, saying it's his job to sell the city.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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