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Friday, July 29, 2005 | The city of San Diego’s pension board is planning to send a request to the state’s Legislative Audit Committee in Sacramento as part of an endeavor that may produce a waiver of its attorney-client privilege, according to a source close to the effort.

If the move does end up in an official waiver of the pension board’s attorney-client privilege, it could mean the end to a months-long standoff between the board and several federal and local investigators.

“Since the legislature is not an entity that would be part of the pension board’s attorney-client privilege, it appears that the documents in question would no longer be covered by the board’s privilege if it goes this route,” said the source, who agreed to confirm the report on the condition of anonymity.

The source said, however, that there was still some question as to when the actual waiver would take place.

The city of San Diego has not issued an audit of how much it spent, collected and owed in fiscal years 2003 and 2004.

Outside auditors and federal investigators have requested the waiver of the attorney-client privilege in order to gain documents that could be relevant to the pension system’s financial state and alleged wrongdoing committed by officials. Outside auditors are refusing to sign off on the city’s financial statements without first seeing the documents.

Without the audit, the city remains with a suspended credit rating and without access to cash to complete projects such as road repair, sewer upgrades and fire station construction.

To date, the pension board has refused to waive its attorney-client privilege over concerns that doing so could open up board trustees, and the system as a whole, to litigation.

The Legislative Audit Committee, a bi-cameral commission with authority to pass audit requests on to the Bureau of State Audits, has an Aug. 3 deadline for audit requests. The legislature, on summer break now, resumes its session Aug. 15.

William Herms, the lead consultant to the Legislative Audit Committee, refused to comment on or confirm any requests to the committee. He said such requests are confidential until officially filed by the committee. Herms said that the committee’s members would not officially consider a request until its next hearing, Aug. 24.

The Legislative Audit Committee is comprised of both state senators and members of the Assembly. Assemblywoman Nicole Parra, D-Bakersfield, chairs the committee.

Any member of the Legislature can request an audit of an organization, agency or government. It is unclear who the pension board would have sponsor its request. Representatives of the retirement system did not respond to requests for comment on the issue.

City Attorney Mike Aguirre has pushed for disintegration of the pension board following its refusal to release documents protected by the attorney-client privilege.

Aguirre said Thursday that trying to involve the state legislature seemed unnecessary.

“I don’t know why they had to go to such extremes,” he said.

The U.S. Attorney’s Office and outside experts hired to look into city finances and politics have also delivered letters requesting the documents. Only one pension trustee remains on the board from the period under investigation.

Scott Lewis is a former reporter at The Daily Transcript. You can e-mail him at

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