The Morning Report
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I just interviewed Stanley Keller, the securities attorney whose three-year, $4 million contract was finalized by the San Diego City Council. Keller will serve as the monitor envisioned both in the city’s securities-fraud settlement with the SEC and the Kroll investigation.
He’ll oversee the city’s financial-reporting reforms and release regular reports on the city’s progress to the SEC and the public.
His take on what happened in the past:
What I’m not going to do is essentially reopen the past. That has been done enough already.
Keller said he was impressed with the progress San Diego had already made, such as enacting the strong-mayor form of government, the election of a new city attorney, the mayor’s hiring of a CFO, new faces on the City Council and the steps taken toward the creation of an Audit Committee. He continued:
I look at this as an opportunity not just to do what’s necessary to comply with the SEC order, but rather to seize the opportunity to create a model for sound municipal disclosure practices and financial transparency.
By the terms of the SEC order, Keller has 120 days to complete a report on the steps the city has taken toward reforming how it reports its financial health to investors, what it plans to do in the future, and if the proper resources are being applied to achieve those plans.
And how will he handle the situation if specific groups or individuals are frustrating the remediation process?
[By] working with the various groups within the city to come up with a resolution and, at the end of the day, calling it as I see it. There are various steps along the way, including public discussion of issues and, ultimately, the SEC. If I see impediments … I have a responsibility … to report to the SEC, and one would hope that having that in the backdrop would make having to do that never necessary.
Keller, who is based in Boston, said he will be spending time here in San Diego, but doesn’t expect to be much of a public figure.
I’m hopeful that this can work in a way where it’s not necessary for me to be a public face. … If it becomes necessary for me to be out there to accomplish the task, then that’s what I will do.
He noted that San Diego’s situation is quite unique, as the monitor model has largely been one of the private sector. He said attempting to pull the rules of the Sarbanes-Oxley Act neatly over a municipality will also be a challenge.
Check back later for a full story about Keller’s hiring.