The Morning Report
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Monday, August 15, 2005 | There was a big announcement buried among the theatrics of last Tuesday’s City Council meeting: In a closed session, the council endorsed City Attorney Mike Aguirre’s legal action to roll back what he calls illegal benefits.
The City Council also gave formal support to Aguirre’s efforts to become the legal counsel for the pension board – a move that will first be addressed by courts in a hearing Aug. 23.
The City Council did, however, only agree to join Aguirre if he modified the suits and dropped his request that specific individuals face financial penalties for their alleged contribution to the city’s pension problem.
Nevertheless, the support means that for all their expressed embarrassment and criticism of Aguirre’s actions, members of the City Council have now signed on to two of his most controversial actions.
It was big news.
And it may not be welcome news to the city’s audit committee, which is led by the former chairman of the Securities and Exchange Commission, Arthur Levitt.
After all, Levitt, in a prepared speech to the council at that same meeting Tuesday, said that one of the most troubling obstacles he and his partners have encountered as they’ve tried to help the city has been the “distraction of litigation, ostensibly begun on behalf of the city.”
Levitt said it’s only made things worse. “[The lawsuits] have resulted in increased acrimony and delay as now the judiciary must spend months if not years working through the countless charges and counter charges.”
While Levitt was addressing specifically Aguirre’s actions, it appears as though now he could have broadened his remarks to include the rest of the council at least on this point.
Aguirre, of course, responded in typical “ahh-you’re-just-corrupt” fashion that Levitt and the city’s other consultants had colluded in an effort to get city officials out of trouble.
What an amazing scene it was actually: Aguirre attempting to interrogate Levitt. It was so tense, in fact, that a group of Levitt’s associates rose up out of their chairs to literally stand behind and back up their boss – the lawyerly version of territorial gang posturing.
Aguirre, who had supported the contracting of Levitt and his partners from Kroll Inc. to help the city out of its fiscal paralysis, has changed his mind. Kroll was now not independent enough for the city attorney because its associates had repeatedly met with and supposedly supported a separate group of the city’s consultants who had been part of an attempt, Aguirre says, to whitewash the crimes of city leaders.
Councilman Scott Peters was so embarrassed by the proceedings that he later made a sort of open apology to Levitt.
“We should be more thankful and grateful you’re willing to help us,” Peters said.
Of course, the city is paying Levitt and his team $800,000 a month to help lead the government out of the crisis. Some people would assume that’s a pretty hefty bit of gratitude itself.
Aguirre actually aired two major complaints of Kroll. The first, that Kroll was part of this effort to hide the crimes of city officials. The second, that the firm and all “our friends from the East Coast” were doing a poor job of accounting for the way they’ve spent the millions of dollars the city has paid them. The city needed to stop paying them and “regroup.”
Interestingly enough, with that second complaint, Aguirre put himself in the same position as Peter Preovolos, the president of the city’s beleaguered pension board. Preovolos, not too long ago, dismissed Levitt and Kroll and said that all the city’s consultants who had been badgering him for waiver of the board’s attorney-client privilege were “fat cats” who did nothing but “pontificate.”
Tell Preovolos and Aguirre that they’ve come to the same conclusion on something and each would probably recoil in horror.
And that’s what it’s come down to: Each time you try to draw out who supports whom or who is opposed to what, you come across an action like the council took in endorsing Aguirre’s legal actions. Then, you have to start over.
In July, when Aguirre first filed his legal complaints there was talk among the city’s largest employee union that his move meant a war was starting.
Now, if we could just find the battle lines.
Scott Lewis is a frequent contributor to Voice of San Diego. You can e-mail him at