Mayor Jerry Sanders just called on the San Diego City Council to stop paying the legal bills for the five former top city officials charged yesterday with securities fraud.

He will call for a special City Council hearing to determine if the five “acted in a fraudulent manner in carrying out their duties as City officials,” according to a statement just released by his office.

“Such a finding would allow the City Council the legal right to discontinue the payment of legal fees as being requested by the Mayor,” the statement said.

Under state law, a public entity is usually required to pay for the legal representation of a public employee. However, a governing body can refuse to do so if it determines that the employee acted with actual fraud, corruption or malice.

The mayor can’t make that call, but, he has come to the decision that the findings of the SEC and private investigators from Kroll prove that the employees acted fraudulently and shouldn’t have their legal bills paid. “Frankly he would do it by himself if not” for the state law that spells out legal representation for public officials, said his spokesman, Fred Sainz.

To date, the city has paid the legal bills of current and former city employees in connection with the investigations.

Here’s a tidbit from another story I did on a related subject earlier this year:

Employees and City Council members have also had their legal bills covered by taxpayer funds in the wake of Department of Justice and Securities and Exchange Commission investigations, nearly all as witnesses, something that has cost the city several million dollars since the probes began in 2004.

When it paid those bills, however, the city added a caveat: that it reserved the right to get those funds returned to them if an employee was charged and convicted of a crime, and stop paying the bills if an employee was indicted.

The retirement system has picked up the tab for its former top administrator and attorney in relation to their 2006 indictment; if they are found guilty or plead guilty, they will have to pay back what the pension system has paid out. And, when six pension officials were charged by the district attorney in relation to similar investigations, the City Council refused to pay their legal fees.


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