Julio Robaina, Ghost Banking, and Christmas Tree Democracy ... by gimleteye

Daniel Shoer Roth, in The Miami Herald, urges the feds to tell us what they know about Hialeah mayor Julio Rubaina's activities as a ghost banker and link to a convicted Ponzi schemer in a city before next week's election of Miami-Dade mayor. As Shoer surely knows, it is not so easy for law enforcement to make public corruption cases. Sometimes their investigations amount to detecting smoke in a crowded theater.

In mob parlance, ghost banking is called loan sharking. In the media, it is uneasily defended as a source of capital for well-meaning immigrants who otherwise would not qualify to start entrepreneurial businesses. But there is another aspect to loan sharking -- the activity that is a source of Robaina's wealth-- that deserves special attention: the way questionable business investments-- backed by usurious loans-- can depend on turning a zoning or building permit in the grey edges of a city or county planning grid.

It is no secret that political insiders use government like a pinata or Christmas Tree. Shake the tree, and all the presents fall near people who have traded favors or quid pro quo's. Ghost banking fits this profile neatly. Of course, there are FDIC chartered banking institutions with questionable business practices lead to twisting government arms along the lines of exploiting the arbitrage between cheap land that can't be developed and government policies that can be deformed to serve special interests: the Urban Development Boundary and board of directors of US Century Bank-- rated zero now by Bauer Financial-- comes to mind. I recall Mayor Julio Robaina and Sergio Pino, the founder of US Century Bank and well-known backroom lobbyist, linked arm-to-arm in lobbying solidarity on one such zoning decision in Miami-Dade County, involving Hialeah lands outside the UDB.

The bottom line: the feds were right to shine light on Robaina's connections to a shadowy world where winks and nods are like ornaments on the government Christmas Tree. It is called "ghost" banking for a reason. The pinata form of democracy has hurt Miami-Dade over the years, as it has in so many other cities and counties in the United States. Voters keep returning its standard bearers to public office. Whether or not Robaina's case builds to a federal indictment, political facilitators will always be circling under the governmental Christmas Tree. The question for voters:  do you want the star at the top of the tree to be oblivious, at best, to what is happening beneath the large branches or, at worst, adding more gold to his luster?