By Kyle Munzenrieder
By Kyle Munzenrieder
By Terrence McCoy
By Jeff Weinberger
By Ryan Yousefi
By Chuck Strouse
By Terrence McCoy
By Terrence McCoy
People often ask me: "Jim, is the county always going to be a mess? Are corruption and incompetence so pervasive that eliminating them is simply impossible?"
I'll grimace slightly in response, nod my head, and say, "I sure as shit hope so. Otherwise I'll be out of a job."
Lately, however, I've begun to wonder if the salad days of scandal really are behind us. I've found myself worrying that the county has turned the corner and actually begun to restore integrity to its operations. Sometimes I'll lie awake at night and ask myself: Where have all the villains gone?
Silly me. Just as I was about to lose hope and sign up for bartending school, along comes Teressa Cawley.
Who is Teressa Cawley?
Well, that depends on who you ask. According to folks in county government, Cawley is their guiding light in the world of high finance. As one of the county's financial advisors, Cawley is among a small handful of people whose judgment and expertise the mayor, the county commission, and the county manager rely upon when making deals worth hundreds of millions of dollars. She evaluates complex business proposals, advises the county on the best time to sell bonds and the best price at which to offer them. It is not an exaggeration to say she is one of a very select group of people who hold the county's financial well-being in their hands. Cawley is someone the average person has never heard of but whose power and influence nonetheless are enormous.
But if you were to ask the Securities and Exchange Commission about Teressa Cawley, you'd learn that, in addition to being a financial adviser to Miami-Dade County, she is a lying, untrustworthy, and dishonest individual who represents "a clear and present danger to the investing community."
The SEC's views are contained in a blistering legal brief the agency submitted this past month as part of a disciplinary action it has initiated against Cawley. The allegations against Cawley date back to 1993 and 1994, when she was an assistant vice president with First Union Capital Markets Corp. At the time, according to the SEC, Cawley was "the young, hard-charging head of First Union's new South Florida public finance operation." It was Cawley's responsibility to solicit bond business from Dade, Broward, and Palm Beach counties. In effect, her marching orders were to make First Union a serious player among local governments.
Her actions during that crucial two-year period are now getting her in trouble. The SEC accuses Cawley of entering into secret agreements with lobbyists to secure bond deals for First Union in South Florida. According to the SEC, Cawley "hired the most politically connected person she could find in each jurisdiction to assist First Union. In Miami-Dade County, that was Julio Gonzalez-Rebull, Jr., whose family and firm had been politically active for 40 years. In West Palm Beach, that was James Watt, a former city attorney, county commissioner, and state representative for West Palm Beach who had been the City of West Palm Beach's lobbyist since 1988. And in Broward County, that was Ron Book," whom the SEC describes as "South Florida lobbyist extraordinaire."
The bulk of Cawley's troubles stem from her alliance with Book, who helped First Union land the coveted position of financial adviser for Broward County in 1994. Under the agreement between Book and Cawley, Book received a $2000-per-month retainer for his services; plus he was promised twenty percent of all First Union profits resulting from county contracts he helped secure. SEC rules required First Union to disclose to Broward County officials its hiring of a lobbyist, but the financial institution never revealed the Book relationship.
Cawley attempted to defend her actions to the SEC by claiming that Book had nothing to do with the Broward deal. "Simply put," the SEC charges, "Cawley lied about everything."
Earlier this year a disciplinary hearing was held in Miami at which a number of people testified, including Ron Book, who acknowledged he did indeed help First Union in Broward. "Book's testimony eviscerates the heart of Cawley's defense -- her absurd claim that although she hired him to introduce her to elected officials in Miami-Dade County and to vouch for her there, she did not ask Book, the most connected lobbyist in South Florida and one with the deepest ties to Broward County government, to help her in Broward, where First Union secured its most significant business, by far, during Cawley's tenure," the SEC legal brief states. "Despite his close ties to Cawley and his obvious attempts to buttress her defense, including repeatedly volunteering testimony he admitted to be pure 'speculation,' Book could not help but utterly undercut Cawley on the central issue [of disclosure]."
A current vice president for First Union, Orlando Cruz, Jr., who took over for Cawley when she left First Union in 1994, testified that both Book and Cawley briefed him on the arrangement in Broward County.
Cawley herself testified and vehemently denied any wrongdoing with regard to disclosure of her business relationship with Book.
SEC attorneys, though, argue that they were able to catch her in numerous lies. "Cawley's testimony was truly stunning," SEC officials write. "It is simply amazing that a person of her evident intelligence and extensive experience in the securities industry would engage in such repeated and obvious myth-making. On every single issue and at every single critical juncture, Cawley simply made it up. Her testimony with respect to why she increased Book's compensation immediately after the first two Broward deals closed is representative. Including the explanation she offered under questioning by her own counsel, Cawley told at least five different stories on this score."
The SEC cites other examples in which "Cawley firmly and repeatedly denied the truth, apparently confident she would not be found out." In those other examples, the SEC notes, "the truth came to light not because Cawley voluntarily corrected the record, but because her own lawyers intervened, obviously concerned that Cawley had not testified truthfully."
The brief continues: "Cawley's conduct was nothing short of reprehensible, and it establishes conclusively that she is a clear and present danger to the investing community. Such conduct is doubly disturbing coming as it does from the current financial adviser to Miami-Dade County, one of the largest municipal debt issuers in the United States."
Although First Union under Cawley's tenure was most successful in Broward County, it had modest success in Miami-Dade as well. Cawley relied on both Julio Gonzalez-Rebull, Jr.'s company, JGR & Associates, and Ron Book to help her make the right contacts. On April 20, 1993, the SEC asserts, Cawley and Book met for lunch. In addition to discussing Book's fees, "Cawley asked Book whether he would assist her by introducing her to the political leadership in Dade County. Book immediately agreed to help Cawley and, within days of the April 20 lunch, Book arranged and attended a meeting with Cawley and Dade County Commissioner Arthur Teele."
The SEC brief notes that Teele had been Book's law partner in the late Eighties and was, in 1993, chairman of the county commission's finance committee. "Cawley had been trying to meet privately with Teele since at least January 1993; Book arranged such a meeting in a matter of days," the SEC says. "Although Cawley repeatedly denied it, the evidence is that the Teele meeting was part and parcel of her attempts to secure First Union's participation in several Dade County municipal finance transactions."
In the months that followed, First Union landed at least one deal in Dade County involving the water and sewer department. Book and JGR also apparently helped First Union land a $13 million bond deal in North Miami Beach in 1994, the SEC affirms, maintaining that "the evidence is overwhelming...[that] Cawley paid both JGR and Book a fee based on the North Miami Beach business."
Cawley tried to hide the payments to Book and Rebull, according to the SEC, by creating false invoices. "In a desperate attempt to defeat this evidence, Cawley engaged in a rolling series of outright lies," the SEC charges.
Cawley and her attorneys are expected to file a response to the SEC brief later this month. The SEC has asked the administrative law judge overseeing the disciplinary case to suspend Cawley's securities license for six months and fine her $35,000. The SEC is also seeking nearly $450,000 in fines from First Union.
After leaving First Union, Cawley created her own company, Southern Municipal Advisers, and thanks to the contacts she had made on the Miami-Dade County Commission, was selected in 1995 to be one of the county's financial advisors. That may soon change, however. In light of the SEC allegations, the county is reviewing its association with Cawley.
In the meantime, maybe she should give some thought to enrolling in bartending school. She can take my spot. Thanks to her I now have renewed faith in the iniquity of this place.