Yesterday we noted that consultants from Kroll Inc. had informed Mayor Jerry Sanders that the city of San Diego would be on the hook for further billing should City Attorney Mike Aguirre pursue a lawsuit against it.

Today, we got a copy of that letter. Click here to read it.

It also contains another interesting tidbit about the consultants, who also refer to themselves as the audit committee. Sabrina H. Perel, Kroll executive vice president and general counsel, writes:

Further, I am writing to notify you that the Audit Committee has received a demand from a former employee of the City of San Diego, alleging that the Report potentially defames them …

The letter states that Kroll is preparing a response to the claims and “would like to meet with representatives of the City its obligations pursuant to Kroll’s letter of engagement dated February 10, 2005.”

That means Kroll, which has billed the city $20.3 million in a year and a half, believes the city is on the hook for any further work it has to do because of its engagement with the city.

The Mayor’s Office says it doesn’t know what former employee has warned Kroll about a potential defamation case. The Kroll report opined that eight former employees committed securities fraud and a whole host of others breached their duties and acted negligently.

So, if any claims are brought against Kroll, the city could be paying even more for the Kroll report.

If anyone knows who this former employee is, please let me know. I’ll be on the phones today and tomorrow trying to find out.

Also, click here to see the letter that Sanders fired off to Aguirre after receiving the Kroll letter.


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