School districts, cities, states and all kinds of government bodies routinely ask voters for permission to take on debt. They sell bonds to banks, who then sell to investors, who like so-called municipal bonds because they are almost always paid back. Banks compete for the business by offering the lowest interest rate. Bigger banks doing more bonds can afford lower rates.

The school district thought it was all set when Texas Attorney General Ken Paxton stopped the process on Sept. 2, 2022, according to documents obtained through a public information request. Eleven days earlier, Texas Comptroller Glenn Hegar had put one of the world’s largest financial institutions on a blacklist and banned it from doing business with any state or local entity in Texas.