Newspaper article The Florida Times Union

Schools Get Check, Apology

Newspaper article The Florida Times Union

Schools Get Check, Apology

Article excerpt

A New York investment firm that handled a 1992 Duval County

School Board bond issue has sent the board a $50,000 check and

an apology.

The check comes after a former partner in the firm was charged

with violating federal securities laws in the bond deal.

Apparently, he also violated the contract with the school


Yesterday afternoon, the school system was reviewing whether to

accept the money.

"I want to make sure there are no legal reasons not to accept

it before dispensing any advice to the School Board," said board

attorney Ernst Mueller.

The $50,000 check represents a fee that federal investigators

say former Lazard Freres & Co. partner Richard Poirier paid a

consultant to lobby a School Board member.

School Board members awarded the underwriting contract for a

$184.5 million bond refinancing to Lazard in April 1992, though

staff members ranked the company's bid as only the eighth best

among firms competing for the contract.

In a federal court lawsuit filed in Atlanta last week, the

Securities and Exchange Commission said Poirier violated

securities laws when he failed to disclose the fee.

The SEC also said Poirier "caused" his firm to reimburse the

consultant for campaign contributions made to two School Board


Florida law requires disclosing fees for lobbying and failure

to do so creates a false document, which is a federal violation.

Moreover, under the bond underwriting contract with the School

Board, Lazard was prohibited from paying a lobbying fee; and if

it did make such a payment, it was required to reimburse the

school system the full amount of the fee.

While noting that payment of the $50,000 to the School Board

"should not be deemed to be an admission or concession of any

kind," Lazard's attorneys said the investment firm "deeply

regrets any suggestion of misconduct" by its former partner,

Poirier, and James Eaton, a Tallahassee lobbyist and former

Lazard employee who helped secure the underwriting contract. …

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