Miami Mayor Tomás Regalado has blocked out six hours on Tuesday to meet with U.S. Securities & Exchange Commission regulators, who are investigating the public bond sales that financed the Miami Marlins’ $634 million Little Havana ballpark.
Regalado is but the latest in a string of city and county politicians who have been interviewed since the SEC wrote almost identical letters to Miami and Miami-Dade County in December 2011, requesting thousands of pages of emails and other documents, all having to do with the ballpark deal. Both governments say they have complied.
Miami Commission Chairman Marc Sarnoff, who voted in favor of the stadium deal, spoke with SEC investigators for a little more than two hours a few weeks ago. He said Monday he could not tell where the probe was headed.
Regalado said Monday he was being prepped by city attorneys for his sit-down. He stressed that his statement will be voluntary.
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“It’s not a subpoena,” said the mayor, the sole vote in 2008 against the stadium plan.
County Mayor Carlos Gimenez said he, too, has met with federal investigators, who asked how the public financing plan developed, who provided the financial information and whether he felt he was misled. Gimenez, then a commissioner, was a vocal opponent of the plan.
“The only thing I said was I wasn’t misled, I just wasn’t given information at the time of the bond sales. We asked for the cost of bonds; they danced around the question,’’ he said, referring to an $80 million bond that will cost $1.3 billion by the time it’s paid off and cannot be refinanced or retired early.
Miami-Dade Commission Chairwoman Rebeca Sosa, one of nine county commissioners who supported the deal, said she sat down with SEC investigators “months ago.’’ She said she was advised not to talk about what was discussed.
Miami Marlins brass did not respond to phone calls or texts seeking comment.
The interviews confirm that the investigation is ongoing. Regulators are believed to be looking at whether bond buyers were misled by financial reports filed by the city or county when they went to the bond market.
They’re likely looking for “false and misleading statements,” said Thomas Tew, a Miami attorney who represents clients before the SEC.
Tew said the SEC could be focusing on the county because Miami-Dade was responsible for the lion’s share of the $634 million ballpark deal, with commissioners voting to bond out $406 million that will be paid back through hotel bed taxes. Miami bonded a little more than $100 million that was used to build parking garages at the stadium, and the Marlins forked over the remaining $128 million.
The SEC has declined to comment on its probe. People familiar with other SEC actions say the agency could be looking at accusations of “pay to play,” meaning whether elected officials took compensation for their vote to fund the stadium. Or they could be examining whether the Marlins misled bond investors about their financial health, which the team never made public during negotiations.
Before Miami-Dade commissioners voted to seal the stadium deal in February 2008, the team argued it was losing money and couldn’t afford to build on its own or invest more than a 20 percent share into the project. A sports website named Deadspin.com later revealed proprietary records that showed the Marlins had actually turned a healthy profit in the years leading up to and including the 2008 vote.
The privately-owned Marlins have never acknowledged whether they received a letter from the SEC, similar to those received by Miami and Miami-Dade.
David Chase, a former SEC investigator who now represents clients before the agency, said the sit-downs with Miami elected leaders likely means no more than the investigation is ongoing.
“It sounds like they’re still gathering information and speaking to individuals to assess if there’s a case to be made or not,” Chase said. “These sometimes take a while.”
Miami leaders are well aware of how long an SEC investigation can take. The Marlins deal isn’t the only one the feds have under a microscope.
The SEC launched a probe in 2009 after the Miami Herald found that city financial managers had moved $26.4 million from capital project coffers to the general fund. A year ago the SEC sent the city a letter alleging Miami had misrepresented its financial situation to bond investors during sales between 2007 and 2009.
At the time, the federal agency said it might file a lawsuit, or seek civil fines or a cease-and-desist order against the city. No action has been made public since.