The federal government has set its sights on Miami, launching an inquiry over a series of bond deals and money transfers this decade.
In a sweeping investigation that could impact Miami's public projects for years, the U.S. Securities and Exchange Commission is probing the city's major bond offerings between 2006 and 2009 and questionable financial transfers used to balance the budget.
A confidential SEC letter, FedExed to the city Friday and obtained by The Miami Herald, demands that Miami turn over reams of e-mails and internal documents showing how it was moving money around to shore up its bottom line — as well as how it represented its financial picture to bondholders.
The investigation represents the most significant scrutiny of the inner workings of Miami's financial operations since a budget crisis a decade ago led the state to take control of its checkbooks.
"It would be extremely disappointing if the city had engaged in that kind of behavior again," said Mitch Herr, the senior trial counsel for the SEC who prosecuted the earlier case against the city. That crisis "should have been a wake-up call and should have resulted in stronger controls."
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