Thursday, June 22, 2006 | The personal attorney for at least one San Diego city councilwoman has had settlement discussions with the Securities and Exchange Commission, according to invoices released Wednesday.
Invoices submitted by attorneys for City Councilwoman Toni Atkins state that her attorney, Sean Prosser, had three teleconferences with Kelly Bowers, senior regional assistant director in the SEC’s Los Angeles office, “regarding potential settlement parameters” on Jan. 30.
It has long been known publicly that City Attorney Mike Aguirre has been engaged in settlement talks on behalf of the city of San Diego as an entity. But the invoices released Wednesday are the first documents to surface showing that attorneys for an individual council member have at least been engaged in settlement discussions with the SEC, indicating that the commission has contemplated bringing an enforcement action against an elected official.
For nearly two and a half years, the commission has been investigating whether city officials committed securities fraud violations in not fully disclosing to investors the true depth of its pension deficit and other potential liabilities.
“These are ongoing discussions with the government, and I cannot comment on that,” said Eric Acker, one of Atkins’ attorneys with Morrison Foerster, of the settlement talks.
Atkins did not return calls seeking comment.
Attorney invoices for three other sitting council members – Councilmen Scott Peters, Brian Maienschein and Jim Madaffer – also note phone calls with the SEC officials on Jan. 30. The invoices are heavily redacted and give details regarding who was involved in discussions, but don’t offer the details of the activity. The council members and their attorneys meet with SEC officials in mid-February to discuss the council’s role in the city’s financial disclosure process; the existence of the meeting was made public by Peters at the time.
The attorney invoices were released late Wednesday by the Mayor’s Office in response to Public Records Act requests by voiceofsandiego.org and other media outlets. Council members have approved $3.1 million in fees for attorneys for themselves and former Mayor Dick Murphy related to the ongoing investigation. City Councilwoman Donna Frye is paying her own legal bills, which she says are less than $5,000.
Fred Sainz, spokesman for Mayor Jerry Sanders, said attorneys for an individual council member wouldn’t have been discussing settlements on behalf of the city as an entity, but rather on their client’s behalf.
“Their individual attorneys would not be authorized to speak on behalf of the city,” Sainz said.
Only Madaffer’s packet of invoices goes beyond the month of January. His February invoice shows an increase of discussions related to the SEC investigation, but his attorney, Thomas Zacarro, said he “would not characterize any of those discussions as ‘settlement discussions.’”
“I can say categorically that we have not had any settlement discussions with the SEC. There’s nothing to settle,” he said.
Zacarro said he and his client have shared their views of the investigation with the SEC in previous meetings.
“I’m not going to comment on any of the substantive conversations we’ve had with the SEC,” said Pamela Naughton, attorney for Peters and former Mayor Dick Murphy, said in an interview on the topic in March. Neither Naughton nor Peters could be reached for comment Wednesday evening. “I can certainly report that we’ve been told by the [District Attorney’s] office and the U.S. Attorney’s Office that we are not targets of the investigation and we are merely witnesses.”
The district attorney and U.S. attorney have launched criminal investigations into city finances and politics and each has brought corruption charges against mid-level city officials and some union leaders. The SEC regulates the nation’s public investment markets and can punish officials with civil charges and bar them from holding positions on boards of directors, or, in the case of government, a legislative body.
Sources told voiceofsandiego.org in February that a number of city officials had received what’s known as a “Well’s call,” an SEC gesture that gives targets of its investigations a chance to challenge a pending enforcement action or to settle. It’s unknown which officials were the subject of the Well’s call. Council members have denied receiving such calls.
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