Palm Beach County commissioners Tuesday directed staff to work with the county clerk and comptroller on recommendations for revising the process of selecting bond underwriting firms.
Currently, each of the seven county commissioners nominates a bond underwriting firm, then the firms are placed in rotation as transactions are readied.
The move to revise the selection process follows last week’s resignation of commissioner Mary McCarty and her announcement that she would plead guilty to the federal fraud charges.
In a press release, McCarty said she failed to recuse herself from voting on bond issues that would benefit the companies that employed her husband, Kevin McCarty, who was an underwriter at Raymond James & Associates Inc. and Bear, Stearns & Co.
The U.S. attorney for the Southern District of Florida said Mary McCarty voted to approve Raymond James as the underwriting firm on a number of bond issues while her husband worked there.
In December 2001, Raymond James was chosen as underwriter for the Palm Beach County School Board. After Kevin McCarty left to work at Bear Stearns, the school board in 2002 transferred its bond underwriting work to that firm.
“Over the years, Raymond James received, with the support of Commissioner McCarty, more than $282,455,000 of underwriting business from” the county commission, prosecutors said. “Bear Stearns, where Kevin McCarty now worked, profited as well, receiving more than $506,715,000 of underwriting business from the school board.”
Mary McCarty also pleaded guilty to honest services fraud for failing to disclose that she received free and discounted hotel rooms from a company that had business with Palm Beach County. She faces up to five years in prison.
Kevin McCarty was charged with failing to report his wife’s crimes. He faces up to three years in prison.
