Friday, July 14, 2006 | The city’s ongoing pension dilemma has pitted several members of the City Council against City Attorney Mike Aguirre over the past year, but one council member has been quietly but significantly working to derail Aguirre’s efforts to challenge a decade’s worth of pension deals.

Council President Scott Peters plunged into Aguirre’s case against the retirement system and the city’s employees when he asked a judge to disqualify the City Attorney’s Office from the landmark case.

Peters’ maneuver revives what has become a classic battle for authority at City Hall in Aguirre’s tenure. In his motion, the council president argues that Aguirre is abusing his title at the city by proceeding with the high-profile lawsuit without the City Council’s blessing. He also claims the city attorney is conflicted.

“It’s time for the City Council to take control of this litigation, which in many ways has been out of control,” Peters said. “A lot of this is legally unfounded.”

If Aguirre and his office are removed, the fate of the high-profile case would immediately be tossed into the air. Peters said the council would then be at liberty to hire its own attorney and steer the case as a majority of the council wishes. Although nearly all parties involved in the suit have said they want a judge or jury to finally rule on the legality of the pension benefits, the case could die altogether without Aguirre at the helm.

For Peters, the motion to disqualify Aguirre fits with the keen interest he has taken in the city’s pension matters. Other elected officials, including those accused of wrongdoing by Aguirre, have laid low in the high-stakes case. And, it comes as Peters has recently worked to hire outside council to replace Aguirre in two other high-profile cases.

Even before he was council president, Peters regularly sent a member of his staff to the meetings of the retirement board, which is opposite Aguirre in the primary pension litigation. When the weekly press briefings he holds include a topic dealing with the pension plan, Peters will often use the forum to criticize Aguirre’s actions. Peters himself has sometimes shown up to court hearings when Aguirre’s case is debated.

The pension benefits case is officially constructed to be a dispute between Aguirre and the San Diego city Employees’ Retirement System, although attorneys representing the unions and unclassified employees intervened later. Aguirre’s request that the judge make an expedited ruling was denied Monday, likely sending the case to trial Oct. 6.

But before that date comes, Aguirre faces a legal attack from within the city’s camp.

Peters said he would like the city to take a united stance on how to handle the city’s mounting pension deficit, arguing that the council, not Aguirre, should determine the city’s legal position. If the council president had his way, however, he said the city would not be involved in the litigation at all. Peters estimates that the case is too costly and that the $700 million that Aguirre claims to be recoverable is closer to $40 million.

“What do we want to go through, as far as all the … expense, turmoil, and bad will that is engendered by months of discovery that’s needed for a trial if there is really no benefit to it?” Peters said.

The council president’s legal maneuver was to be heard Thursday, but has been delayed to just before the October trial date.

Aguirre said Peters’ complaint is designed to help the council president – and other city officials accused by Aguirre of misconduct – skirt a decision on the legality of their actions between 1996 and 2002.

“I think this is, on his part, a desperate effort to scuttle the case,” Aguirre said. “He doesn’t want to be associated with something that was done illegally.”

Aguirre has accused Peters and Councilmembers Toni Atkins, Jim Madaffer and Brian Maienschein of wrongdoing when they voted to approve the deal in 2002. Aguirre hopes to halve the $1.4 billion pension deficit by convincing a court that the deal, and a similar one in 1996, is illegal and corrupt.

Peters said he wanted his motion to come after Aguirre’s request for an expedited ruling on the benefits, saying he allowed the city attorney to have his day in court.

The purpose of his motion, Peters said, is to get a legal decision on what Aguirre’s proper role is: a city attorney who can work independently of the City Council’s wishes, or an attorney who works at the council’s direction.

“There are roles for the council and for Mr. Aguirre: We’re responsible for policy making and budgeting, and the city attorney is supposed to be providing us legal advice,” Peters said.

“We have to have an understanding of the role of the city attorney, and this is the appropriate forum to get this answered,” he said.

In essence, Peters is taking a long-standing dispute at City Hall over Aguirre’s authority and plugging it into the pension case. There, he hopes a judge will decide once and for all on what Aguirre can and can’t do in the name of the city of San Diego.

The retirement system filed a challenge to Aguirre’ authority also, but was shot down in the judge’s ruling Thursday. But some of the city attorney’s foes believe Peters has better standing to file that motion because he asserts that he is actually Aguirre’s client.

“Peters is in the best position to raise that issue. He is the highest authorized officer of the ‘client,’” said Michael Leone, the retirement system’s attorney.

Others outside the case said a motion to disqualify an attorney in a civil lawsuit is a fairly regular tactic, but that Peters’ action may be the result of “political maneuvering.”

“We know the underlying dispute is that he doesn’t agree with how the City Attorney’s Office has carried on,” said attorney Michael Crowley, who is not involved in the case.

Some of Peters’ allies on council are glad that he has stuck his neck out to play the role of spoiler in a case that has drawn such public interest. Atkins, who as deputy mayor held a daylong symposium to determine the city attorney’s role last year, said it’s in the best interest of the city to get a court ruling on Aguirre’s authority.

“I think we all need to march in there together,” Councilwoman Toni Atkins said. “The city should do that, it’s not just the responsibility of Scott Peters to shoulder this.”

City Councilwoman Donna Frye, however, said Peters is harming the city by making it more difficult for the city to really determine whether the city needs to bear the brunt of the pension deals.

“Not only is it counterproductive, it could cost the city a great deal of money and time if Mr. Peters was to prevail on having Mr. Aguirre removed,” Frye said.

In his motion, Peters lists several reasons why Aguirre should be disqualified:

  • Peters said that the City Attorney’s Office cannot attack the pension deals when, in the care of Aguirre’s predecessors, the office “negotiated, prepared, reviewed, approved the very legislation the City Attorney’s office now seeks to invalidate.”

“The law clearly does not allow an attorney to advise its client, obtain confidential information and then later attack the decisions of its client which were based on the attorney’s advice,” Peters argues in a court filing.

  • Peters said that Aguirre cannot bring the suit after representing an unnamed client who threatened to sue the city and retirement system in 2002 for underfunding the pension plan. Aguirre has a conflict in this regard because he cannot legally turn around and represent the city in a case regarding the same topic after threatening to sue the city earlier, Peters said.

Aguirre will not disclose who that client is, which makes the potential conflict “impossible to analyze,” Crowley said.

  • Peters argues that Aguirre mischaracterizes the permission the council granted him last August to bring the suit. Peters claims the council allowed Aguirre to pursue the case in his name only, not the city of San Diego’s, and that he needs that express consent to proceed with the case.

Aguirre claims that he does not need the council’s permission to proceed, but argues that the council members had unanimously given him their permission last August regardless. Frye filed her own statement with the court, backing Aguirre’s claim that the council voted to authorize him in closed session.

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