So while SLOP was busy picking out the choice nuggets from the Kroll report yesterday, we on the news side were busy thoughtfully digesting the report and composing lengthy news stories. We didn’t get a chance to deal with much in This Just In.

But, on the day after, there’s still plenty that didn’t get to fit into the two stories.

First is the issue of criminality. While some had looked at the Kroll report as being a precursor to any further actions by the U.S. Attorney’s Office, that wasn’t really the case. The report largely rehashed what prosecutors had already weighed when dealing with the city’s pension system.

However, federal prosecutors had also, according to previous subpoenas, shown at least waning interest in the city’s bond disclosures. (If securities fraud is deemed to reach an extreme level, it can be tried criminally – think Ken Lay and Jeffrey Skilling.)

Benito Romano, an attorney for Kroll’s audit committee, said even the most egregious findings of securities violations at the city didn’t reach criminal level.

“We didn’t find evidence support a criminal charge,” Romano said.

On another note, here’s something intriguing:

In response to the Kroll report, Council President Scott Peters – who’d been among Kroll’s biggest supporters – had this to say to the Union-Tribune:

My lawyers are advising me to be very critical of this report.

The report found that council members had been negligent in the disclosure process – the lowest level of securities fraud, which experts say likely wouldn’t get pursued by the SEC if it is working off the same evidence as Kroll.

More on the distinction between the levels of fraud alleged of certain top city staff members and the council members – as well as how that part of the report was phrased – to come.


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