City Attorney Mike Aguirre announced today that he has launched separate investigations into what he describes as a “misuse of public funds” by the San Diego City Employees’ Retirement System and Kroll Inc., a group of consultants investigating city finances.

The city attorney said the investigations will focus on possible violations of the California False Claims Act, which allows the city attorney to investigate an entity that might have defrauded the city in submitting a claim for payment.

He said the pension benefits granted to city employees in 1996 and 2002 constituted a conspiracy to defraud the city of San Diego. The city attorney has already challenged those benefits in court; his motion for a quick judgment in the case was denied yesterday, likely sending the case to trial in the fall.

Aguirre added that “behind the scenes, what’s truly taking place is Kroll is working with a minority faction on the City Council, and has been, in order to delay and to obstruct the resolution of the important issues involving our city.”

Kroll and the pension system have been frequent targets of Aguirre. The city attorney has already authored numerous investigative reports into both organizations.

Aguirre said it is “inexplicable and inexcusable” to continue to retain and pay Kroll, which has charged the city more than $20 million for its services and has repeatedly returned to the City Council for more funding,

The completion of the committee’s report is necessary for the certification of the city’s 2003 audits, which in turn is needed for the city to return to Wall Street.

During the afternoon press conference, Aguirre also congratulated Mayor Jerry Sanders for the prepared remarks his office released yesterday, in which he criticized the consultants for “holding the city hostage” by not releasing its finalized audit.

“With regard to Kroll, I want to congratulate the mayor for his courageous, highly ethical, and very forceful statement that he will be making today to the City Council and to the people of San Diego about the difficulties that the city has had with Kroll,” Aguirre said. “The mayor I think has shown exemplary leadership in trying to exhaust all possible avenues in working with Kroll.”


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