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December 06, 2011

SEC's Marlins probe: What they're fishing for

I've now had a chance to look over the Securities and Exchange Commission's subpoenas to the city of Miami and Miami-Dade County (downloadable here and here, respectively) over the Marlins stadium project, and while it's still largely a matter of reading between the lines, there are clear signs that what the SEC is after here is a big deal indeed. In amidst all the usual requests for emails with the team, MLB, etc., is this stretch of items that appears, in slightly differently order, in both of the SEC's letters:

C. All documents from after January 2007, concerning and the Marlins.
D. All documents from after January 1, 2007, concerning (a) the Marlins's ability to finance or contribute to the financing of a stadium, parking structure, or sports complex, (b) the Marlins's profitability or revenues, or (c) the Marlins's debt or ability to borrow money.
E. All documents from after January 1, 2007, concerning (a) any tax issues concerning the parking garage built or to be built by the City of Miami for the Marlins stadium (including, but not limited to, whether the City of Miami had to pay property taxes on the parking garage, and whether the parking-related bonds were tax-exempt), or (b) whether the parking facility was to be used solely for public purposes.
F. All documents from after January 1, 2007, concerning any payments, loans, campaign contributions, or any offers of anything of value from the Marlins to any member of the city, county, and/or state governments.

Item E is the one you'd expect from the SEC — not only is it about bonds, which are the agency's bailiwick, but the recent revelations about Miami having screwed up the tax status of the parking garages has to be raising some regulatory eyebrows, especially after bondholders were left holding the bag in the New York Yankees' parking garage mess.

The two preceding items are a different story. The explicit mention of Deadspin in item C (something that Deadspin itself, surprisingly, failed to note in its own coverage of the SEC probe) is an indication that the agency is planning to investigate not just possible malfeasance against bondholders, but the broader question of whether the revelations that the Marlins were socking away money while crying poor for a stadium mean that taxpayers got the shaft as well.

Item F, meanwhile, is an obvious (ahem) fishing expedition for any money ("bribes" is such an ugly word) that may have changed hands to encourage the city or county to approve the Marlins deal. Given the stadium's long and messy history — remember the city commissioner who got $100-million-plus in money for her district in exchange for her stadium vote? or the county commission chairman who got $40,000 in campaign donations from firms interested in bidding on the stadium project? — there's bound to be plenty of smoke to investigate here.

All of this is heavy tea-leaf reading, needless to say, and it's entirely possible that nothing much in the way of fines or prosecutions will come of all these subpoenas. If nothing else, though, this looks likely to produce the most in-depth government investigation of a stadium scheme since Dennis Kucinich had his own subcommittee. That would be both a boon to those interested in the inner workings of stadium shenanigans, and likely a huge embarrassment to the Marlins — maybe that's why the team is rushing to sign up every free agent under the sun before any chickens come home to roost.


Neil--Keep in mind that the SEC often doesn't issue subpeonas until an informal request for records is denied. Often by that time the attorneys have an idea of what they're looking for because they've either been told by an informant, or they've acquired documentation through other methods. Where's theres a subpoena, there's usually fire--so to speak.

Posted by Anonymous on December 7, 2011 11:36 AM

I'm wondering whether Mayor Regalado couldn't be one of the "other methods" they used: He was one of the main opponents of the stadium deal, he's obviously upset about the parking garage mess that was dropped in his lap, and since he was on the city commission when the deal went through, he presumably knows where some bodies are buried. Total speculation on my part, but still.

Posted by Neil deMause on December 7, 2011 11:45 AM

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