By: Joe Mysak
This originally appeared on bloomberg.com, see full story
After losing the third county commissioner to scandal since 2006, some officials in Palm Beach County, Florida, may become exceptions in the $2.67 trillion municipal bond market by requiring more transparency in public debt sales.
Mary McCarty, 54, an 18-year commissioner who resigned Jan. 8, faces federal charges of helping to steer public underwriting business to firms that employed her husband, Lawrence Kevin McCarty. She is scheduled to plead guilty on March 27, court documents show. Kevin McCarty, who has pleaded guilty to concealing his wife’s alleged crime, is to be sentenced the same day. The couple made almost $300,000 from the deals, the government alleges.
In Palm Beach County, whose $55,311 per-capita income in 2006 was 51 percent higher than the national average, the push for transparency may end a practice whereby each elected commissioner chooses an underwriting firm, such as Citigroup, Inc.
“Astounding,” said J.B. Kurish, a finance professor and associate dean at Emory University’s Goizueta Business School and former director of the Government Finance Officers Association’s Government Finance Research Center. “It is just not the right thing to do. You don’t give these out like patronage jobs. You have to analyze these firms and have a process to do so.”
‘Strict Controls’
Mary McCarty was charged in a criminal information on Jan. 9. That was four days after New Mexico Governor Bill Richardson removed his name from consideration as U.S. secretary of commerce amid a federal grand jury investigation into whether his chief of staff helped a political contributor win bond work in the state. The probes, along with a broader federal examination of how municipal issuers reinvest proceeds from bond sales, spurred a former top regulator, Christopher Taylor, to call for more openness when public agencies go to market.
The case against Mary McCarty is USA v. McCarty, 9:09-cr- 80004-DMM. The case against Lawrence Kevin McCarty is USA v. McCarty, 9:09-cr-80003-KLR. Both are in U.S. District Court, Southern District of Florida (West Palm Beach).
