ATLANTA -- The Securities and Exchange Commission has launched a probe into the role of two state representatives in the 1992 sale by Margate, Fla., of $18.9 million of bonds underwritten by Clayton Brown & Associates.

In a two-page letter sent on June 6 to Leonard Golub, Margate's city manager, the SEC requested all documents relating to "the selection of participants in the underwriting" and "any person representing or acting as a consultant" for Clayton Brown on the December 1992 transactions.

At the time, the city issued $3 million of tax-exempt and $15.9 million of taxable water and sewer revenue bonds to refund a 1985 borrowing. Margate, a city of about 40,000, is located north of Miami in Broward County.

The SEC request, signed by Jonathan Golomb, a branch chief in the agency's enforcement division, also targeted "all documents ... relating to any communication with Bolley Johnson or Michael Abrams between January 1, 1988, and the present." No other individuals were mentioned in the request.

Johnson and Abrams are longtime state representatives. Johnson, D-Milton, is speaker of the House, and Abrams, D-North Miami Beach, is chairman of the House Finance and Taxation Committee.

Johnson has served as a consultant to Clayton Brown, but the firm said he had no role in the 1992 refundings.

Abrams, who said recently he would not seek a seventh two-year term, is also a full-time employee of Clayton Brown. where he has been a senior vice president of public finance in the firm's Miami office since May 1991.

The SEC letter asks that the information requested be provided "voluntarily" and says it "should not be construed as an adverse reflection upon any person, entity or security or as an indication by the commission or its staff that any violation of law has occurred."

Golomb said yesterday that in accordance with SEC policy, neither he nor any other official at the agency would comment on the letter.

Golub, the city manager, said in an interview that "no political pressure was ever exerted" to steer the award of the deal to Clayton Brown. He also said a review of city records has turned up no record of campaign contributions from Clayton Brown or its employees.

The city manager said that Johnson "had no role at all" in the financing. He said that Abrams' position as a state legislator also "did not figure in" Clayton Brown's selection for the deal.

Golub said the city has responded to the SEC's request, sending the agency a batch of documents on Friday.

"We chose the firm because we were comfortable with them and felt they were familiar with our situation and finances," Golub said, adding that the deal netted the city $850,000 in present value savings. The selection did not involve a request for proposals, he said.

Golub said that the city initially discussed the Margate refinancing with Miami-based Guzman & Co. At the recommendation of Percy R. Aguila Jr., then a senior vice president for Guzman, Clayton Brown was named bookrunner on the deal, Golub said. Guzman remained on the deal as part of the management team.

Aguila joined Clayton Brown as a vice president in its Miami office last September.

Robert James Beh, managing director of public finance at Clayton Brown, said the SEC also sent his firm a letter with a request for documents similar to that received by Golub.

Beh, who said he is the firm's sole spokesman on the matter, said that it is his "understanding" that the agency's scrutinizing of the 1992 Margate financings are part of a broad-based probe of the municipal securities industry initiated by the agency last year.

The SEC sent out letters to more than 70 firms active in public finance last year, requesting information concerning political contributions made to local government officials involved in municipal bond issuance.

The initial letters have been followed by requests for additional information. Most recently in early 1994, the SEC has shown an interest in the relationship between consultants and the municipal securities industry.

SEC Chairman Arthur Levitt Jr. "has made an examination of the municipal market a top priority," Beh said. "The Margate letters are part of [the agency's] attempt to get a total picture of the role of campaign financing and consultants in the industry."

Beh said that the SEC has, in the last 13 months, sent the firm four letters, including the Margate request. The first, he said, was sent on June 11, 1993, and requested information on campaign contributions. The second, sent last October, requested further information on firm employees, and a third letter, sent in February, requested a list of the firm's relationships with consultants.

Beh said that although Johnson worked as a consultant for Clayton Brown, the state representative "had absolutely nothing to do with Margate." According to the Clayton Brown official, Johnson was paid $3,000 a month between December 1991 and December 1993 for consulting work relating to "a private real estate venture."

Beh said that the firm did hire a consultant in 1992 to help it with the deal, another state representative, Jack Tobin, D-Margate. He said that Tobin, a former mayor of Margate before he became a state legislator in 1982, was paid a "one-time" fee of $15,000 "to provide us with an understanding of the environment" in Margate and "to give us credibility with officials there."

Neither Tobin nor Johnson returned phone calls, and neither Abrams nor Aguila could be reached for comment.

Since 1980, Margate has sold only one bond issue other than the two 1992 series, according to Securities Data Co. In November 1985, the city issued $19.17 million of water and sewer bonds through sole manager William R. Hough & Co.

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