To show why I don’t think the SEC probe represents a replay of the Braman trial, it is necessary to revisit what Judge Jeri Beth Cohen’s ruling stated in 2008.

While there were various claims to Braman’s initial lawsuit, the Judge’s ruling focused only on one [Count 4]. Another claim [Count 5] was invalidated due to a Florida Supreme Court ruling.  They ruled that municipalities do not have get voter approval before committing ad valorem money toward bonds.

So the Braman trial boiled down to one issue. Did the baseball stadium serve a “paramount public purpose?”  Judge Cohen ruled that it did and it doesn’t read as though it was a tough call.  She wrote “… similar to the trend in Florida, courts across the country have consistently held that sports stadiums serve a paramount public purpose.”  Cohen relied particularly on one case she described as “strikingly similar” to the Marlins situation, the building of a stadium for the Tampa Bay Buccaneers. I’ll leave it to others to wonder if the Poe case makes a po’ precedent [sorry].

Here is how Sports Illustrated has summarized the SEC’s request:

The parking garage tax issue is specifically mentioned by the SEC. Investigators also want records about the Marlins’ ability to contribute to the stadium complex’s financing, the team’s revenues and profitability, and whether any Marlins employees gave “any payments, loans, campaign contributions or any offers of anything of value” to city, county or state government officials.

The SEC also wants detailed information about the bonds used to finance the stadium and whether investors might have been misled.

Not all SEC investigations end in enforcement actions, but enforcement actions typically end in settlements that can include fines and other penalties. Investigators can refer individuals or companies to the Justice Department for potential criminal prosecution.

Now here are some of the issues documented in Judge Cohen’s order which were not part of the narrow “public purpose” issue she eventually ruled on:

• “The financial condition of the Marlins is unknown to anyone except the Marlins and MLB.”
• “… It is undisputed that the County has no idea whether or not the Marlins can satisfy any of their obligations under the BSA.”
• “… the terms of the negotiated deal are not a subject for this Court’s scrutiny”
• “While the Court agrees with Plaintiff that the Marlins are getting what amounts to a ‘sweet deal,’ this is, put bluntly, not the business of this Court.”

The reason I believe that the SEC probe is not a replay of the Braman trial, is that the SEC’s concerns differ greatly from that a civil court judge. I believe the SEC very much considers it its business if the Marlins obtained a ‘sweet deal’ through misleading representations to local governments. Especially if those representations were then relied upon to determine which government bonds to be issued.

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