On The Wire: Pigs get fat, hogs get the SEC’s attention

On Saturday, the Miami Herald reported the following:

Federal authorities have opened a wide-ranging investigation into the Miami Marlins’ controversial ballpark deal with Miami-Dade County and the city of Miami, demanding financial information underpinning nearly $500 million in bond sales as well as records of campaign contributions from the Marlins to local and state elected leaders.

In a pair of lengthy letters delivered to government attorneys Thursday, the U.S. Securities & Exchange Commission gave the city and county until Jan. 6 to deliver everything from minutes of meetings between government leaders and Marlins owner Jeffrey Loria and Major League Baseball Commissioner Bud Selig, to records of Marlins finances dating back to 2007.

I thought it right that the SEC extended their focus beyond Miami to Bud Selig and MLB. After all, in Miami’s version of The Wire, the Marlins just have one of the Towers. Bud Selig is the Avon Barksdale character pulling on the strings. Speaking of which, the Stringer Bell role in this play is a combination of Rod Manfred and Bob DuPuy.

In the hopes of obtaining public financing for the new stadium, the Marlins lied to reporters and fans about their finances.   Who knows, for now, what they actually told or shared with government officials.  They did it all with the blessings of Major League Baseball.  Given that David Samson would often make silly [here], misleading [here and here] or false [here and here] statements about the Marlins finances, especially on his radio show, it must have all seemed like a very clever game to them. They acted, as Mr. Omar Little once commented, as though it was “all in the Game, y’all, all in the Game.”

The Braman trial has now become like a grand jury report for the SEC. Every government official who testified at the Braman trial is going to be spending a lot of money on attorney fees. The Marlins and MLB must be hoping that those attorney’s are very good because those officials are not the endgame in this investigation. Hard to imagine how this ends without some admission of guilt or complicity on the part of the Marlins and a fine which significantly increases their share of the stadium costs. Pigs get fat, hogs finally got someone’s attention that didn’t think it was a game and is in a position to do something about it.

The repercussions are just beginning. At the SunSentinel, Juan C. Rodriguez considers the initial effects:

With the new stadium, the possibility of another “market correction” as the club termed its pre-2006 purge would seem unfathomable. Yet the investigation conceivably might unnerve free agents looking for deals of five-plus years. Ultimately, players in most cases follow the money, but whether warranted or not, some might shy away from not having no-trade protection in light of this new specter.

The Marlins earlier this week with their 3-year, $27 million commitment to Bell silenced skeptics who believed their dalliances with upper echelon free agents were some kind of ruse. Though the SEC investigation barely is off the ground, the Marlins already may have lost whatever small earnings they made in public trust.

Update 12/04: My blog is mentioned in Juan C. Rodriguez’s article about the Marlins reaction to the SEC filing.

Articles referenced are copied in full at the end of this blog post.

————————————————————————————-

Marlins say baseball business as usual in spite of SEC probe

By Juan C. Rodriguez, Sun Sentinel

10:57 p.m. EST, December 3, 2011

Keeping the focus on the field instead of the finances is proving no easier for the Miami Marlins than it did for the Florida Marlins.

Buzz around the Marlins late Friday went from free agency to a federal agency, specifically the Securities and Exchange Commission and its probe into the club’s stadium deal with the City of Miami and Miami-Dade County.

The Miami Herald reported the SEC has issued subpoenas for all matter of material from the City and County regarding the $634 million project.

The Marlins released a statement saying they were aware of the investigation and were ready to fully cooperate with the SEC. In addition, no further comments would be forthcoming because it was an on-going matter.

Jorge Costales is a certified public accountant and blogger (www.2thinkgood.com) who’s researched and written extensively about the Marlins’ finances.

He believes this probe could mean serious trouble for the club in light of testimony offered during the Norman Braman trial. Remember it was Braman who filed a lawsuit trying to derail the stadium project.

“The Braman trial has now become like a grand jury report for the SEC,” Costales said.

“Every government official who testified at the Braman trial is going to be spending a lot of money on attorney fees. … Those officials are not the end game in this investigation. Hard to imagine how this ends without some admission of guilt or complicity on the part of the Marlins and a fine which significantly increases their share of the stadium cost. Pigs get fat. Hogs get the SEC’s attention.”

A Marlins official said the investigation would not impact the club’s roster construction and pursuit of top-level talent this offseason.

It may not have a bearing from the club’s standpoint, but whether it gives some free agents pause can’t be discounted. They may now have concerns about signing a long-term deal to play in Miami only to find themselves on the trading block after a couple of seasons if the result of the investigation impact the franchise financially.

Fox Sports on Friday reported one potential roadblock between the Marlins and left-hander Mark Buehrle is the club’s policy not to give no-trade provisions. The Marlins have no plans to change it for Buehrle, Jose Reyes, Albert Pujols or anyone else.

With the new stadium, the possibility of another “market correction” as the club termed its pre-2006 player purge would seem unfathomable. Yet the investigation might unnerve some free agents looking to stay in one spot the next five-plus years. Miami-based agent Barry Praver doesn’t foresee the Marlins having difficulty signing players.

“Let’s don’t rush to judgment,” he said. “This is speculative. If one of our clients wants to play for the Marlins, it’s business as usual.”

The Marlins earlier this week with their three-year, $27 million commitment to closer Heath Bell silenced skeptics who believed their dalliances with upper echelon free agents were a ruse.

Though the SEC investigation barely is off the ground, the Marlins already may have lost whatever small gains they made in public trust.

jcrodriguez@tribune.com or @JCRMarlinsbeat on Twitter.

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About Jorge Costales

- Cuban Exile [veni] - Raised in Miami [vidi] - American Citizen [vici]
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