Thursday, Sept. 21, 2006 | Investigators with the state attorney general have requested a host of documents as part of their probe into the past billing practices of the San Diego City Attorney’s Office, including the notes of a former top assistant city attorney and a presentation given to the City Council in 2004, according to a confidential memo.
The memo from the Attorney General’s Office to the city attorney’s criminal chief and principal investigator seeks internal memos, billing cards and e-mails dating back to 1996, as well as additional documents from departments outside of the City Attorney’s Office.
The attorney general is investigating whether city officials fraudulently billed other city departments for work they didn’t perform, a practice criticized for shifting the financial burden from the city’s tight day-to-day operational budget to its water and wastewater departments.
The attorney general’s probe hasn’t grabbed the attention of the numerous other state and federal probes, as Attorney General Bill Lockyer jumped into the City Hall frenzy late. The launch of the probe in July came just days before the release of the 18-month, $20.3 million private investigation by consultants from Kroll Inc. It also came after pension-related criminal charges had been brought by the District Attorney’s Office and the U.S. Attorney’s Office, and Securities and Exchange Commission was already deep into its probe.
However, the specter of additional criminal charges by the attorney general is real. The Kroll report largely steered clear of criminal issues in its vast legal analysis of City Hall wrongdoing over the last decade, with one exemption: the city attorney’s billing.
“The billing practices of the City Attorney’s Office – in particular, the falsification of time records resulting in improper charges to enterprise funds – implicate a number of statutes and legal prohibitions. Most prominently, the officials and employees of the City Attorney’s Office may be held criminally liable under the California Penal Code pursuant to either Section 72 (“Presenting False Claims”) or Section 424 (“Embezzlement and Falsification of Accounts”),” the report states.
Additionally, the report states, the subordinates who went along with the practice could also be held liable for aiding and abetting their superiors. The practice could also be found to be a breach of the municipal code and City Charter, according to the report. A state law that voters enacted in 1996, known as Proposition 218, prohibits the commingling of fees, such as water bills, and the day-to-day budget for the city.
City Attorney Mike Aguirre has said he stopped the billing practices upon assuming the office in 2004 from former City Attorney Casey Gwinn. After being criticized in July for failing to investigate the matter, Aguirre’s office hastily prepared an investigation into the billing practices. The attorney general’s office has since picked up the probe.
Aguirre’s probe found that attorneys in the criminal division billed enterprise funds for work they didn’t perform and employees filled out time cards in pencil so that their supervisors could later alter them.
The practice has been described as a backdoor tax because it allowed officials to tap into accounts supported by user fees – enterprise funds – and spare the city’s day-to-day operational budget. The City Council can unilaterally raise enterprise fees; it takes a vote of the people to raise most taxes.
The confidential attorney general memo, obtained by voiceofsandiego.org, also requests:
- City attorney organizational charts with home and office phone numbers dating back to 1996.
- All service-level agreements not included in the city attorney’s July report. These are the contracts forged between enterprise funds and other city departments for the contracting of services.
- Former Deputy City Attorney Keri Katz’ PowerPoint presentation on service-level agreements to the City Council in 2004.
- Notes and documents of former Assistant City Attorney Leslie Devaney from her presentation on the subject to department heads in 2004. Devaney lost to Aguirre in the 2004 election.
- Office e-mails containing the key words “billing,” “SLA,” “service level agreements,” and “MOU billing,” as was as other potential searches.
Supervising Deputy Attorney General Jim Dutton, who authored the memo, declined to comment on the status of the investigation when reached Wednesday. Aguirre didn’t return calls for comment.
In an interview, Devaney said she hasn’t been contacted by the attorney general’s investigators. The 2004 presentation, she said, was to manage a request by certain departments to be able to choose what attorneys were assigned to them. Devaney said she was unaware that time cards were being altered by supervisors in the office.