The SEC also took issue with Harrisburg officials for doing what many public officials often do: Putting a good face on a difficult situation. For example, in the state of the city address in 2009, Harrisburg’s then-mayor described the incinerator as an “additional challenge” and an “issue that can be resolved.” In its order on Monday, the SEC called the address misleading because it didn’t go into detail about the impact the incinerator debt was having on the city’s finances. […]But with the Harrisburg case, the SEC is going even further by policing the accuracy of speeches and presentations of government officials. “Public officials should take steps to avoid misleading investors,” Ms. Greenberg said.
This is bad news for the many other cities struggling with bankruptcy. In order to convince investors to buy your city’s bonds, you have to project confidence and an aura of command. If pols have to watch their words even in public speeches, they’re going to find it even harder to make this pitch in private.[Harrisburg image courtesy of Shutterstock]