Monday, October 03, 2005 | You’re really not going to believe this but last week the City Council took yet another official action with regard to an initiative of City Attorney Mike Aguirre that generated some confusion.
Shocking, I know.
Loyal readers of SLOP (that’s “Scott Lewis on Politics” for those not-so-loyal readers) will remember our attempts last month to illustrate exactly what had happened when the City Council authorized Aguirre to move forward with an ambitious legal initiative whose end goal is to invalidate pension benefit enhancements granted city employees in 1996 and 2002.
What a wild ride that was, eh? First, one of Aguirre’s deputies announced that the City Council, in a closed session, had authorized the city attorney to pursue three legal cases in response to the pension crisis. One of those, of course, being the action to roll back the allegedly illegal pension enhancements.
Aguirre then told the staff here at SLOP that the council had endorsed his efforts. Later, Deputy Mayor Toni Atkins said they had done no such thing – that they hadn’t even taken an “action.” Councilman Scott Peters said they had taken an action, but only to authorize Aguirre to use city funds to pursue his legal wish list “in his name only.”
Councilwoman Donna Frye explained that her colleagues could split hairs all they wanted about what was said in the secret meeting but that the simple fact was that the council allowed Aguirre to move forward with his legal claims.
And it wasn’t in his name only – the city of San Diego appears right next to Aguirre’s name on what is actually a legal cross-complaint filed in response to a lawsuit from the city’s pension board.
The news was shocking to some city laborers who may have imagined Aguirre was working alone. The largest employee union of city workers demanded that the City Council have the courage to acknowledge what they had done or, if the council didn’t support it, to stop Aguirre somehow because he was moving forward with a case on behalf of the city of San Diego – otherwise known as the entity represented by City Council.
Are you clear on all that? Thought so, SLOP is known for bringing clarity to such confusion.
So, because of our previous success, the staff here at SLOP found itself with an assignment to clear up another brewing controversy about an official action the City Council took last Tuesday.
City Attorney Mike Aguirre claimed that the Council, Tuesday, gave him and a lawyer the city had hired the “go-ahead” to begin negotiations with the Securities and Exchange Commission.
City Councilman Jim Madaffer said Aguirre was “delusional” and that the Council had done nothing of the sort.
So what really happened? SLOP staff created an ad-hoc task force to find out.
A little backgound: The SEC, of course, is investigating the city of San Diego and has been since February 2004 after it got word that the city was restating its financial condition in various bond offerings.
But the SEC prefers to have companies and organizations in this sort of trouble investigate themselves and ultimately present a package of revelations, remediation and acknowledgement of wrongdoing. When the package appears to be sufficiently thorough and apologetic, the SEC considers settling the issue and broadcasting to the world how, exactly, it helped reform another organization gone wild.
Aguirre has produced what he says is such a package. And the City Council agreed to let him discuss it in a public session Tuesday. Remember, the meeting was meant for discussion, as Aguirre himself said, no action was needed.
Deputy City Attorney Mark Blake took over the presentation and told the City Council that it would be wise to begin negotiations with the SEC so that by the time the city’s independent audit committee completed a comprehensive review of everything illegal that might have happened, the city could be ready to immediately settle with the federal agency.
Deputy Mayor Atkins immediately offered this motion:
“I would direct that our counsel begin the groundwork for resolution with the SEC that the City Council deems appropriate within the timeline as our internal investigation comes to conclusion or completion,” Atkins said.
It was approved unanimously. City Legislative Recorder Gilbert Sanchez, who was detailing the meeting for city archives, said that because the motion was unexpected, it is unclear whether it will be considered a formal resolution, or just a “direction.”
Atkins later put out a press release that said this:
“The City Council today unanimously supported Deputy Mayor Toni Atkins’ motion to have the city’s outside legal expert, Morgan Lewis & Bockius, begin negotiations with the Securities Exchange Commission (SEC) to work toward settling the commission’s investigation of the city’s securities disclosure practices.
“The City Council also directed the city attorney to work with Morgan, Lewis & Bockius on negotiating the settlement that was authored by the city attorney and presented to the City Council today,” the statement read.
Here was Aguirre’s press release: “The San Diego City Council today gave the go-ahead to City Attorney Mike Aguirre to begin negotiations with the Securities and Exchange Commission (SEC) that could bring to a close the federal agency’s 19 month long investigation of the City’s disclosure practices.
“The Council also authorized the city’s outside counsel, Morgan, Lewis & Bockius, to work with the City Attorney in negotiating with the SEC.”
But Councilman Madaffer had a different take. He blasted out his own comments Wednesday evening, calling Aguirre a “delusional egomaniac.”
“It’s as though we must have been attending two different meetings. The City Council did not authorize him to do anything near what he has mentioned in his release,” Madaffer wrote.
The Voice of San Diego, SignOnSanDiego.com, the San Diego Daily Transcript, the Los Angeles Times and others all led their stories or briefs about the meeting with a paragraph about how the City Council had unanimously decided to begin settlement negotiations with the SEC.
The Union-Tribune however – in a follow-up story to its online version – led with the news that the council had been told Tuesday by the lawyer from Morgan, Lewis and Bockius that seeking a settlement with the SEC would be “premature and possibly futile.”
It’s not clear from the video of the meeting, but if the lawyer did, at some point, offer the City Council advice against seeking a settlement with the SEC, the council certainly rebuffed it. In fact, it unexpectedly moved to support such talks.
And the U-T recognized that the council had authorized settlement talks with the SEC. So what about Madaffer? Through his press secretary, the councilman said he wouldn’t elaborate on his concerns about how Atkins’ motion was being portrayed.
Maybe he’s trying to figure out if he was, indeed, at a different meeting.
E-mail Scott Lewis at