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Teressa Cawley is a smart, energetic young woman, an astute manager, and a whiz in the field of municipal bonds. She's good enough to have been hired as a financial adviser for Broward County. Simply put, she's a player.
She's also a liar, according to the Securities and Exchange Commission (SEC), a woman so ethically challenged that she suffered no compunction about hiring an influential lobbyist to land a county contract and hiding the fact, then fabricating wild stories and shifting blame to her coworkers when asked about it. Her prevarications tainted county bond dealings that are, by law, to be transacted honestly and aboveboard.
So says a scalding, 73-page legal brief by Christian Bartholomew, senior trial counsel for the SEC in Miami. Bartholomew's brief is no dry recitation of wrongdoing; it's a condemnation of Cawley and the company for which she worked, written with verve and élan uncharacteristic of a government document. In it he says Cawley didn't just fib, she lied " about everything. On twelve separate occasions and on every critical issue ." She engaged in " repeated and obvious myth-making." Her conduct " was nothing short of reprehensible, and it establishes conclusively that she is a clear and present danger to the investing community."
What could possibly get a federal regulatory lawyer in such a lather?
In 1992 First Union Corporation, based in North Carolina, hired Cawley and charged her with setting up a public-finance business in South Florida. Ultimately First Union had its eye on underwriting county bond issues, a lucrative business in which the underwriter collects a commission for marketing the bonds and lining up buyers. But there's a lot of competition in the underwriting business. Cawley knew that a good way to get her company's foot in the door would be to serve as an outside financial adviser helping the county negotiate bond deals. Her office was up and running in March1993, with Cawley in charge of four other employees. She was 30 yearsold.
And she was under pressure to make the business profitable in a hurry. To do that Cawley needed help making inroads with county commissioners and bureaucrats who awarded the contracts she was after. She needed someone who could show her the political lay of the land, someone who could open a few doors. She needed paid "consultants."
According to the SEC, she hired " the most politically connected person she could find in each jurisdiction to assist First Union." In Palm Beach County, that was James Watt, a former West Palm Beach city attorney, city lobbyist, county commissioner, and state representative. In Dade County her pick was Julio Gonzalez-Rebull, Jr., who runs a well-established public relations and lobbying firm. And in Broward her choice was "lobbyist extraordinaire" Ron Book. It's Cawley's relationship with Book that landed her in hot water with theSEC.
In 1995 Book ran afoul of the law himself by illegally funneling some $30,000 in campaign contributions through employees at his Dade County office. He was fined $40,000 -- a slap on the wrist for a man whose income is at least $2million per year according to news reports -- and lost his license to practice law for 75 days. None of that put a dent in his lobbying business. He's widely regarded as the most influential lobbyist in the state and counts Palm Beach, Miami-Dade, and Broward counties among his clients.
Book has deep connections to Broward government. He's a friend and long-time supporter of Commissioner Scott Cowan, who chaired the selection committee that eventually hired Cawley's firm as the county's financial adviser. (Cowan says he doesn't recall Book lobbying him on the issue, "though he's lobbied me on plenty of other issues.") Book has also built strong alliances with Commissioner Suzanne Gunzburger and former commissioner Sylvia Poitier and worked closely with former county administrator Jack Osterholt and current county finance director Phil Allen.
Bartholomew is tightlipped about what sparked the investigation of Cawley. He does, however, hint at the idea that someone tipped off the SEC about Cawley's payments to Book. They found that Cawley was paying Book a $2000-per-month retainer and had promised him 20percent of First Union's profits from deals he helped secure. In all, Book made $48,000 by introducing Cawley to the right people, says theSEC.
It's not illegal to use lobbyists disguised as "consultants" to help your company secure a bond deal with a public entity. It is illegal, however, to fail to disclose that fact if your company is jockeying for a contract. In June 1993 Broward County hired Cawley and First Union as financial advisers to help the county negotiate three bond issues worth a collective $263million to pay for sewer improvements and the convention center and to add to the general revenue. The contract was worth $175,000 to FirstUnion.
A financial adviser, explains Bartholomew, is a paid advocate for the county, someone whose job it is to make sure that the county gets the best possible deal from the bond broker. It's someone who should be chosen strictly on the basis of merit, he says. Circumventing the process with slick lobbying violates the public trust and could get the county contractually involved with an adviser who doesn't hold its best interests at heart. "The financial adviser sits on the side of the table of the municipality and needs to be purer than Caesar's wife in terms of the advice it gives," Bartholomewsays.