City Attorney Mike Aguirre said the outside audit committee has two weeks to show up to a City Council meeting with a report detailing the investigation they’ve been conducting since last February. Failure to do so would spur the city attorney to pursue a fraudulent business case against Kroll, whose consultants comprise the committee, he said.

Kroll and attorneys from Willkie, Farr & Gallagher have been probing the city’s pension and financial disclosure dealings with the purpose of preparing a report on whether the city committed illegal acts in these arenas.

The audit committee was hired to prepare the report to the satisfaction of KPMG, the auditing house that is withholding its blessing of the city’s financial statements for 2003. KPMG has twice rejected the work of another firm, Vinson & Elkins, citing the firm’s lack of independence.

Kroll has postponed the release of its report several times, claiming that they need more time. Most recently, the report was slated for delivery to the city this month, but it appears that milestone will also be pushed back.

Stay tuned for more this afternoon.

EVAN McLAUGHLIN

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