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Monday, February 14, 2005 | Thirty years ago, this was a line that bought tears of laughter to TV audiences. Today it’s heard again, and the tears have been replaced with somber reflection of the task ahead.
Those financial institutions that were given a chance to re-establish their credit ratings and the trust and confidence of the federal government and Wall Street were required to make one universal concession- change their CEO and sometimes the complete senior management team. Many San Diego bank and savings and loan executives paid for their institution’s failures with their jobs.
Recently, we have seen how federal prosecutors and Wall Street deal with those who have issued fraudulent financial statements. A new term, the “Perp Walk,” has entered our vocabulary as we have watched CEOs escorted from their offices in handcuffs by federal authorities.
Currently, no one seems to know the financial condition of the city of San Diego. The danger is that once confidence has been lost, it takes far more to re-establish it than the publication of two long delayed audits. Our city had a $1 billion deficit in its pension plan, which is based on an 8% return on investment. The deficit more than doubles if the return is more like it’s been in recent years. Then there’s also deferred maintenance, some of it under legal mandates to correct or we suffer penalties, which runs more than $1 billion. And who knows what undisclosed “gifts” are in the labor contracts. For example, police officers who clean their own motor cycles get six hours of overtime pay.
What is needed is a change at the top of the attitude and direction of the organization.
Dick, for the city and probably for your self, the best contribution you can make to is to resign. This way a new election can be held under rules everyone will understand, and the winner will emerge with over 50% of the vote, an important majority for Wall Street confidence and a mandate to do the job. If you don’t resign, you leave recall as the only option-which while it would correct the errors of the past and could begin the rebuilding of confidence in out City-it would continue the circus like atmosphere we have been in and would almost guarantee the next mayor would also not have a majority of the vote.
Peter Q. Davis is the former Chairman, President and CEO of Bank of Commerce which was acquired by US Bank, the former chairman of the Centre City Development Corporation, and the former chairman of the San Diego Unified Port District. He lost to Dick Murphy and Ron Roberts in the primary for mayor of San Diego last spring, and Murphy recently did not re-appoint him to the Port Commission, because he said, “I needed to appoint someone I could work with at the port.”