I hate to ask, but might there be a tl:dr; summary? That's a lot of text. I'm interested, but I don't really want to spend that much time on storytelling.
As the other replies have said, it boils down to bid rigging. What's interesting about it is the sheer scale. It apparently has been going on for at least 10 years, affects every state in the US and the banks have likely scimmed billions of dollars from it. What's particularly galling is that the entities they have stolen this money from are schools, hospitals, ports etc. Basically, another example of the already rich brazenly lining their pockets yet further with misappropriated public money. All the time hiding behind the supposed "complexity" of what they do and showing apparently no shame or remorse.
Cities/Town/States gets money from bond sales and need a place to store the money because it doesn't get used at once. They held auctions and banks would submit bids to hold the money at a certain interest rate. Banks colluded to lower their bids instead of competing fairly.
