Kelly Salt, the former deputy city attorney accused in the Kroll report of securities fraud, has informed the private consulting firm that they were wrong, Salt’s attorney confirmed today.

“What we did was to write back to the committee, that as far as Kelly was concerned the report was wrong. We are going to be providing them with a written response sometime with in the next three or four weeks,” said Shirli Weiss, Salt’s attorney.

When I asked her whether the dispute was factual or related to the specific legal analysis, Weiss said it was “a little bit of both.” She said it’s too early to tell whether the complaint could result in a defamation lawsuit.

The report is pretty harsh on Salt, who is no longer with the city. Here’s an excerpt of what it says about her:

Of all the members of the City Attorney’s Office, Kelly Salt bears the most responsibility for the City’s failure to disclose that it was violating both the provisions of its agreements with the State as well as federal law. Ms. Salt was the City’s liaison to outside council and was responsible for keeping him informed of all relevant facts.

The report states that Salt wrote a 2002 memo describing “in great detail that the City had been violating the Clean Water Act for ‘much of the time’ it had been receiving its grants and loans.” (This violation, it was determined, could force the city to return hundreds of millions of dollars in grants and loans. A liability, the report found, that should have been disclosed to investors during three different bond offerings in which statements were certified by Salt.)

It continues:

While possessing this knowledge and carrying principal responsibility for disclosure, she sat in meeting after meeting with Mr. Webber (the outside disclosure counsel) without mentioning it.

Scroll down for the running history on this issue.

ANDREW DONOHUE

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