San Diego City Council voted 4-2 to deny former City Manager Michael Uberuaga the use of taxpayer dollars for his legal fees.

In April, Uberuaga and four other former City Hall employees were charged with reckless fraud by the Securities and Exchange Commission for releasing faulty financial statements to investors which masked the city’s weakening fiscal health stemming from the pension crisis.

Following the SEC’s civil charges, the City Council revoked financial support from the four officials, but postponed a decision in Uberuaga’s case at the request of City Attorney Mike Aguirre.

Last week, Aguirre said the council is legally bound to pay Uberuaga’s bills because the Kroll report found that he exhibited “negligence,” but not “intent” in his conduct.

Uberuaga’s defense lawyer reiterated this position at Tuesday’s meeting.

“There is no basis to assert that there was an act or omission because of actual fraud, corruption, or malice which state law generally requires the city to establish if the city will deny a defense,” said Robert Lauchlan Jr.

Councilmen Jim Madaffer, Brian Maienschein, Tony Young and Kevin Faulconer voted against paying the bills, while Council President Scott Peters and Councilman Ben Hueso voted in favor. Councilwomen Toni Atkins and Donna Frye recused themselves from the vote.


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