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The City of Miami received a letter from the Security and Exchange Commission's investigative staff informing officials it believes the city broke the law when it obtained bonds for infrastructure. The letter from the federal government gives the city until August 6 to respond to the accusations that it broke laws designed to insure open and honest financial disclosure before bonds are issued for city projects. Mayor Tomas Regalado called the situation "another black eye for the city."
The City of Miami received a letter from the Security and Exchange Commission's investigative staff Tuesday informing officials it believes the city broke two federal laws when it obtained bonds for infrastructure.
The letter from the federal government gives the city until Aug. 6 to respond to the accusations that it broke laws designed to insure open and honest financial disclosure before bonds are issued for city projects.
“It’s another black eye for the city, although we believe that the allegations that they say, the city did not commit,” said Miami Mayor Tomas Regalado. “We'll be hopeful that the city won't get fined in money because the taxpayers should not have to pay for the mistakes that were made before.”
Regalado, who was on the city council when the bond deals were made, said investigators are focused on $26 million that was moved from the city's capital fund to the general fund. Bond experts said the move would make it appear the city was better off financially and help obtain better interest rates.
If accusations are true, the SEC said the issue could result in fines paid for by taxpayers.
"…the staff may seek a permanent injunction, a civil penalty, and an order commanding the City of Miami to comply with the Commission's prior ... desist order," the SEC letter said.
Joe Arriola, the former city manager, called some of the people involved “stupid.”
“Can't believe these guys are so stupid and by the way Regalado can't blame all this on an old administration because he had to vote on it as a commissioner," he said in an email.
While the potential fines are for bonds during the period former Mayor Manny Diaz was in office, the SEC is also investigating the finances that led to the construction of the Marlin's new ballpark and its parking garages.
“On our part we have taken many measures that we will show to the SEC that this will not happen again,” said Regalado, who told NBC 6 he was against the ballpark deal.
Diaz was unable to be reached for comment Tuesday afternoon.