"Will This Bank Rise Again" is one of the strangest PR pitches I've ever read in the Herald (online edition, thank you).
To get the true story of US Century Bank, readers will have to use our search engine to read the lengthy commentaries and back stories; you won't find it anywhere in the Herald.
The Herald reports in the second paragraph, "The plan stayed on track for a few years until the recession deepened, bad loans mounted and capital was depleted, putting U.S. Century’s very survival in jeopardy."
There is no mention of the thru-line that Eye On Miami discloses: that US Century was built by a board of directors dedicated to the business model of converting wetlands and farmland to suburban sprawl. The political influence peddling by board directors, lead by Ramon Rasco and Sergio Pino, literally turned Miami-Dade government into a hostage state.
The political origins of the housing boom in South Florida advanced the fortunes of governors, like Jeb! Bush, and presidents, like George W. Bush. This story was uninterrupted by the biggest real estate crash since the Great Depression, built on the fumes of derivative finance and salesmanship that the Miami Herald never, ever attempted to link for readers.
And as we have written in the past, the reason is that Herald revenue and income substantially depended on telling these stories a certain way, so as not to offend advertisers and insiders, like the land use lawyer lobby in tall skyscrapers downtown who rub shoulders with Herald brass.
There is nothing of these relations, naturally, in the Herald report.
At its inception, U.S. Century founders, homebuilder Pino, attorney Ramon Rasco, Sedanos family members Manolo Herran and Armando Guerra and gun manufacturer Carlos Garcia had grand plans to create a successful bank.
After all, they had already succeeded with Ready State Bank, which was started in 1983 with $3 million and was sold in 1999 for $150 million, making fortunes in the process.
“Once we sold the bank, it was always on our minds that we would do it again,” said Pino, during an interview in his office late last year.
So they brought in more well-connected directors: Dade County Bar Association President — and later Florida Bar Association President — Frank Angones, Spanish television executive Jose Cancela and lobbyist and Super Bowl Host Committee Chairman Rodney Barreto, adding Herran’s son Augustin to succeed his father once he retired.
“This was a dream team,” Pino recalled. “We were going to create a great bank.”
What they created was an insider piggy bank of proportions noted by Coral Gables bank analyst, Bauer Financial, with insider loan ratios that may have been among the highest in the nation. The insider transactions extended right to County Hall. One anonymous reader of Eye On Miami commented that during the housing boom, there was a special US Century Bank loan officer delegated to handle loans to county employees. No questions asked.
The Herald glosses over the 2011 FDIC order against US Century Bank. In the ProPublica investigation of the bank by former Miami New Times writer, subsequent Pulitzer Prize winner writer Jake Bernstein noted that one government bank investigator, recently retired, said he had never seen a bank with so many abuses that had not been shut down through enforcement.
In response, Ramon Rasco and other bank investors have expressed nothing but sunny skies for their great community bank. Not a single mention is made of the way that environmental and civic organizations spent decades fighting like David against Goliath the influence peddling that trashed Miami-Dade's quality of life, natural resources, and shifted multi-billion dollar infrastructure costs onto the backs of taxpayers. They called it 'progress'. We call it 'fraud'.
The Herald report white-washes these criticisms.
The suits cite the bank’s large volume of insider loans and other dealings, including that one third of the bank’s 24 branches are leased from current or former directors.
Dávila, who joined the bank in August of last year, said that U.S. Century has modified terms of its loans to past directors Pino and Barreto. Pino, for example, provided more collateral and agreed to a rate increase. Dávila said that all loans to insiders are being paid on schedule.
Readers would like to know if the Herald demanded to see the evidence, to support this claim. What is also relevant is where the land is. We believe much of it is outside the Urban Development Boundary. We would also like to know, what is the record of loan and principle repayment by the "insiders" since the banking crisis in 2008. And we would also like the Herald to issue a disclaimer related to inviting US Century Bank founder Sergio Pino and Armando Codina into the newsroom, to address staff, to pitch what great contributors do for the local economy.
These omissions lead an informed reader to wonder if the Herald editor tasked the reporter to write an up-beat story that would weight against further sanctions by the US government. As in, "Don't miss the criticisms, but don't elaborate on them either."
The new Genting big gambling effort for Miami/Jorge Perez/Jimmy Tate money will be in charge (Perez is a Fortune billionaire, having bluffed his way into the "too big to fail" category of condo developers who would have been shut down by the banks, if the federal government held banks accountable for unstable derivative financing that shattered the US economy. Perez tied his fortunes to his lenders, the way the Miami Herald tied itself to its advertisers ... ), while avoiding -- presumably -- a string of nasty lawsuits that could bring to light more data and facts on the rampant abuse of banking rules and regulations. Eye On Miami has written at length on the Genting/ Perez connection. Use our search engine to read more.
It is a mystery why US Century Bank hasn't been shut down by the federal government. The answer could be in the way US Century Bank directors bound themselves tight, through campaign contributions and fund raising, to a variety of elected officials. The power of South Florida representation in Florida and, by extension, the nation cannot be easily dismissed.
But even if you take exception with our depictions of the Growth Machine, and explanations how the gears mesh from local county permitting officials, to county commissioners standing as land use authorities, to lobbyists and mortgage bankers, Wall Street and presidents, here is what also can't be dismissed: US Century Bank was the largest recipient of TARP (that is, taxpayer) financing in Florida and the largest for a bank its size in the United States. There is $50 million outstanding debt that is owed by the bank, to US taxpayers. The Herald report seems to gloss over the fact as though losing the money was just a sign of support for people who run a great economy. If you are a Republican, Democrat, or Tea Party iconoclast; write to your senators and to the US Treasury Department and INSIST that all the money be repaid to taxpayers as part of any deal. Pay the money back. No discounts, no hair cuts, no white washing theft.