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The city’s former top bureaucrat testified under oath that, before the 2020 election, she leaked a law firm’s purportedly confidential analysis of the city’s 101 Ash St. transaction to a candidate for city attorney who was also considered the city’s chief legal nemesis.
Attorneys for the city and a former city real estate adviser subpoenaed former Chief Operating Officer Kris Michell to sit for a July 21 deposition, two months after a bombshell letter from City Attorney Mara Elliott’s office accused her of ordering records about the city’s acquisition and handling of 101 Ash St. and Civic Center Plaza to be purged in her final days at City Hall.
Michell deemed the letter from Elliott’s office unfair and “inaccurate,” according to a draft transcript of the deposition obtained by Voice of San Diego.
During the deposition and a subsequent interview with Voice, Michell described herself as a whistleblower who sought the counsel of lawyer Cory Briggs, who lost the race for city attorney, and giving a law firm’s memo to him.
At the time Michell handed the document to Briggs, questions were swirling about funds that couldn’t be fully accounted for in the Ash deal and how the city ended up holding the bag on repairs to a vacant building it evacuated in early 2020 after a series of asbestos violations. Michell said she became discouraged and wanted Briggs’ advice.
“I was having trouble with the city and frustrated that we weren’t getting to the answers, and I always my entire career used outside experts, industry professionals, etc., to help me,” Michell said under oath. “So when I didn’t feel that I was getting the right information and I wasn’t getting correct information, I gave the memo, shared it with Cory Briggs, and I shared it because he has a lot of whistleblowers. I was concerned that this deal was not appropriate, and in fact worse – even worse – than that and, so, you know, if I had to, I was willing to blow the whistle on whatever was found. And I sought guidance on it from him.”
Briggs declined to comment, writing in a text message that he is “bound by attorney-client confidentiality.”
In an interview with Voice, Michell declined to say whether she considered Briggs her attorney but told La Prensa, which was first to secure an interview with Michell, that she “considered him my attorney.”
The City Attorney’s Office and Aimee Faucett, former Mayor Kevin Faulconer’s chief of staff, pushed back against Michell’s narrative.
“Kris (Michell) is manipulating the facts and straight up lying to protect herself,” Faucett wrote in an email. “Kris is calling herself a ‘whistleblower’ to cloak her illegal act of providing a confidential legal memo to a known city adversary, Cory Briggs – a lawyer who has made a career out of suing the city. Briggs was also running against the current city attorney at the time Kris handed him the memo.”
Elliott’s office criticized Michell for failing to reveal that she leaked the document in 2020 until she was deposed and broadly disputed her version of events.
“Our office has no response to the former COO’s attempts to rewrite history,” Elliott spokeswoman Leslie Wolf Branscomb wrote.
Michell’s attorney Pamela Naughton argued that her client helped expose the city’s mishandling of the 101 Ash debacle.
“Because of Kris Michell, the truth about the deal for 101 Ash is coming out,” Naughton said. “Why is the city hiding those memos from the public?”
Questions About a Volunteer
Michell, who has worked for multiple San Diego mayors, returned to City Hall in fall 2017 to oversee special projects – months after the city acquired 101 Ash St. in January 2017.
In early 2018, Faulconer tapped her to oversee city operations and employees. It soon became clear things weren’t going as planned with 101 Ash.
By April 2018, city workers still hadn’t moved in and the Union-Tribune seized on the nearly $18,000 a day the city was spending to lease the empty building. City officials were eventually forced to return to the City Council to get approval for a more substantial, 19-floor renovation project.
The situation generated more questions about the building and what the city should do. Michell said she then began a fact-finding mission.
Michell testified that she had lunch in 2018 with Jason Hughes, who volunteered in 2013 to serve as a city real estate adviser to then-mayor Bob Filner and continued to provide advice for years after Filner left. It was publicly revealed last year that the city’s 101 Ash and Civic Center Plaza landlord paid Hughes $9.4 million after the city agreed on lease-to-own deals for the two buildings.
Calendar records previously obtained by Voice show she had a scheduled lunch with Hughes in June 2018.
Michell said in her deposition she asked why Hughes devoted so much time to city volunteer work.
“I was surprised that he would give so much of his time and volunteer (sic) to the city, and I just wanted to know, why are you doing this?” she said.
According to Michell, Hughes replied that he “wants to make sure the city doesn’t do a dumb deal and thus harm the downtown market.” He didn’t mention that he had been paid on two city deals.
Michell testified that she, Hughes, Faulconer and Faucett discussed at a May 2018 meeting that Hughes’ company was ineligible to serve as a project manager at the 101 Ash building because the City Attorney’s Office had concluded his work on the Ash lease created a conflict-of-interest that made Hughes Marino ineligible for the contract. Michell said she then understood Hughes to be a volunteer.
In 2019, Michell said, she heard rumors in the broker community that Hughes had been paid. Hughes in 2014 did tell multiple city officials he wanted to be paid by someone other than the city. Hughes has produced a letter he says the city’s former real estate director signed giving him the go-ahead to seek compensation for complex city lease deals. Yet the former real estate director and other former city officials have said that they didn’t know the city’s landlord paid Hughes.
Hughes’ attorney Michael Attanasio noted in an email that Michell did not question Hughes about whether he was paid but instead focused on his volunteer advising and leasing work.
“In this context, Jason replied that he was happy to help Michell and the city, a completely accurate statement,” Attanasio wrote. “She never asked him whether he had been paid for his entirely different work on lease-to-own transactions that occurred years earlier when she was not even with the city, nor whether he had disclosed his intent to be compensated on those projects.”
Michell said she soon had many more questions.
On Michell’s watch in 2019, the county issued a series of asbestos violations as contractors proceeded with renovations at 101 Ash and flagged concerns with building systems. In late 2019, the city began moving employees in – only to evacuate them in January 2020 after the county declared people shouldn’t be working in the building because the work there had continued to create asbestos dangers.
Michell testified that she twice asked Jason Wood, a principal for city landlord Cisterra Development, whether the company had paid Hughes for his work on the Ash acquisition. Michell couldn’t recall specifically when she questioned Wood but said at least one of the occasions was in 2020 after the city recognized it couldn’t account for $14 million in the Ash deal.
“He said (Hughes) did not receive payment,” Michell said.
Michell said Wood also refused to provide other details on its various Ash deal line items, saying it “was a proprietary structure” he couldn’t share. Detailing them might have revealed Cisterra’s $4.4 million payment to Hughes and its estimated $7.45 million profit.
Cisterra attorney Michael Riney wrote in an email that Wood didn’t remember such exchanges with Michell.
“Mr. Wood recalls no conversation with Ms. Michell about who received compensation on those transactions,” Riney wrote.
Cybele Thompson, the city’s former real estate director, previously testified that Wood at least twice denied paying Hughes when she directly asked, a claim that Wood disputed through a spokesman.
In early 2020, after the city abruptly evacuated 101 Ash, it hired three law firms to investigate the 101 Ash transaction and renovations. Michell publicly promised at a January 2020 City Council meeting that the city would get to the bottom of what happened.
In her deposition, Michell said she became concerned after the investigations started that the City Council wasn’t “going to get that unvarnished view” she had pledged.
Michell told Voice that she was frustrated by the City Attorney’s Office call that it needed to oversee the investigative process, particularly once it engaged outside law firms to dig in.
“It was my impression that the City Attorney’s Office wanted to control the investigation,” Michell told Voice. “It was frustrating because I was eager to find out the problems so I could fix them.”
Elliott spokesman Richard Jackoway told Voice that Michell never expressed concerns to the City Attorney’s Office and “did not hesitate to directly contact or meet with outside counsel, nor was she discouraged from doing so.” Jackoway also wrote in an email that the city charter requires the City Attorney’s Office to hire and oversee outside law firms and that the City Attorney’s Office ultimately allowed the public release of “all information that did not disclose the city’s legal strategy” at the City Council’s direction.
By summer 2020, Michell said she flagged information from city staff that $14.4 million in the Ash deal couldn’t be accounted for.
She separately told La Prensa that Faucett told her to “stop digging” after that revelation. Michell told Voice that Faucett was frustrated at the time and did not dissuade her from investigating the Ash debacle in future conversations.
Faucett said the digging never halted.
“101 Ash is an exceptionally frustrating situation,” Faucett said. “At no point did we ever stop digging.”
By early August, Thompson had resigned from her post leading the city’s real estate department. Michell testified that she soon after gave Thompson a handful of emails including an October 2014 email Hughes sent to the city’s former chief financial officer suggesting he’d “seek compensation” for work on the city’s Civic Center Plaza lease in hopes Thompson could help her understand what happened. Michell said she first saw the email following a records request from Voice seeking communications about the Civic Center lease, an essentially identical deal that predated the Ash lease.
Asked during the deposition what she might have blown the whistle on, Michell mentioned her suspicion that Hughes may have been paid, inadequate due diligence on 101 Ash and her concerns about the structure of the city deal.
“We were marching along looking at repositioning the building, but we just couldn’t get to the bottom of it, and that was frustrating for me because I’m someone who likes action and results,” Michell told attorneys.
Michell said she decided to approach Briggs, who was a friend and neighbor. Michell said she contacted Briggs suggesting they walk their dogs and planned to give him a memo from law firm Burke, Williams & Sorensen analyzing the 101 Ash transaction.
“I know you’re getting information from other people at the city, let me know your thoughts and help us through this, and I appreciate that you’re not going to use (the memo) or do anything with it,” Michell recalled saying on their walk.
Michell said she decided that she had the authority to share what the City Attorney’s Office has described as an attorney-client privileged document because she was the client.
“I’m the client, so I’m the one that’s on point trying to get this building back up and to do what we need to do, so I think – and again, if there was real wrongdoing, we were going to share that with the public,” Michell testified. “I promised.”
Michell said under oath that she never told anyone at City Hall that she had shared the memo with Briggs, including after a September 2020 NBC 7 San Diego story focused on a version of the memo that included a footnote that Elliott and others decried as fabricated. The story created a firestorm.
Faucett, the former Faulconer chief of staff, said she was infuriated to learn that Michell had leaked a memo to Briggs that she considered privileged.
“As a veteran of City Hall who worked under three mayors, (Michell) knows damn well she does not have the sole authority as COO to hand off legal memos that could put the city and the taxpayers at risk,” Faucett said. “She is covering up the fact she endangered the city she was supposed to protect.”
The city’s ethics ordinance bars city officials from sharing confidential information unless “authorized by law” and a key court decision involving the state’s Brown Act found that only a legislative body such as the City Council can make the call to reveal privileged information – not an individual official.
The City Attorney’s Office says the city also provides ethics training every two years in keeping with state law and that the training for city officials discusses the handling of confidential information.
Naughton, Michell’s attorney, argued the memo Michell gave Briggs should not have been considered privileged and that the City Attorney’s Office declared it privileged simply because the analysis was conducted by a law firm.
The Disputed Footnote
The NBC 7 San Diego story became a major one in the race for mayor between former City Councilwoman Barbara Bry and now Mayor Todd Gloria. That was in part because of one section of a leaked investigative report that implied Gloria and the city attorney had improperly impeded the work of outside investigators.
That showed up in a footnote, the now notorious Footnote 15. The city attorney alleged that footnote was a total fabrication and NBC later issued a retraction.
Michell’s testimony doesn’t shed light on exactly what happened with the footnote or provide clarity on whether it was real or fake.
Michell said during the deposition that some time after she gave Briggs the memo, NBC 7 reported on a version of the analysis that included the footnote saying that investigators had been unable to get City Attorney’s Office approval to interview Gloria, then a state assemblyman and former city councilman who voted for the Ash deal in 2016. Elliott circulated a memo from the outside attorneys who did the investigation saying the footnote was fabricated.
Attorney Larry Shea, who has represented the former NBC reporter who wrote the story, Dorian Hargrove, said that an unknown source mailed the memo containing the footnote to Hargrove in a manilla envelope with no return address after Briggs had told him to expect a document in the mail. He also said Briggs urged Hargrove to look carefully at the footnotes.
Michell said in her deposition that she didn’t recall seeing the footnote in the version of the memo she gave Briggs and had “no knowledge of who wrote it.”
She couldn’t say whether Briggs gave the memo to NBC 7 but said she didn’t believe he would have added the footnote.
Michell said she ultimately met with Hargrove, whom she had spoken with the night before the story published. She said under oath that she did not provide a copy of the memo to Hargrove and had not been aware of the footnote until after the story published.
Shea said Hargrove had assumed that the document came from Michell, who was a source he had been speaking with regularly after Briggs introduced them. Hargrove assumed Michell had also provided previous documents Briggs had given him.
“He could not confirm that the document he got in the mail came from her but in the context of the relationship and the communications, the assumption was it was coming from her,” Shea said.
Before the story published, Elliott’s office told NBC 7 that the footnote was fabricated. NBC 7 decided it had the sourcing to proceed.
After the story published and blowback from Gloria and Elliott escalated, Hargrove and Michell met at a Starbucks.
There, Michell told Voice she showed Hargrove her copy of the Burke, Williams & Sorensen memo and that “footnote 15 was different.”
Michell confirmed that she allowed Hargrove to take photos of her version of the memo.
“I felt like, this guy’s credibility is on the line,” Michell told Voice.
NBC 7 retracted the portion of its story about the footnote a week after publishing.
Then, on Sept. 21, NBC 7 announced that it was suspending Hargrove and executive producer Tom Jones through the November election following a retraction of its reporting on the footnote and an internal investigation it said “revealed missteps in our reporting and in our process for checks and balances.”
That same day, Michell abruptly announced she was resigning less than three months before a new mayor would take office. At the time, Michell told Voice her resignation had “nothing to do with 101 Ash.”
She now says otherwise.
“I had a frustration that I was not being given the proper information and enough information to not only do the investigation but to get to the bottom of this situation, and it became clear that continually new information would come out about what happened, and I didn’t feel that people were being forthcoming,” Michell testified.
Faucett and Faulconer said the former mayor was alerted that Elliott’s office wanted to interview Michell when he called Elliott to say his chief operating officer had resigned.
“When I spoke with the city attorney, she informed me that (Michell) had not responded to several requests by her investigative team to discuss the leaked draft legal memo,” Faulconer wrote in a statement. “The city attorney asked if I could strongly encourage her to respond to her investigators’ request.”
In her deposition and an interview with Voice, Michell’s attorney refused to allow Michell to say whether she has been interviewed by a government or law enforcement agency about the leaked memo or the footnote.
The City Attorney’s Office told Voice in late May that it had referred information about the footnote to the San Diego Police Department, the District Attorney’s Office, the Federal Bureau of Investigation and the U.S. Attorney’s Office.
Elliott’s office also said it learned of the allegations it later included in its May 11 letter accusing Michell of ordering records to be erased from San Diego police.
When asked for more details, a San Diego police spokesman said the agency “cannot comment on open investigations.”
Michell said she only purged documents she understood could be destroyed per city policy and did not order the city’s Department of Information Technology to delete any records on her computer or cell phone.
Elliott’s office declined to answer questions from Voice about many of Michell’s claims in the deposition. Instead, it largely focused on Michell’s failure to share that she leaked the memo.
“For two years Ms. Michell concealed facts she has since testified to under oath: that during the 2020 election campaign, she provided city attorney candidate Cory Briggs with a confidential draft legal analysis of the 101 Ash St. real estate transaction, and subsequently understood that a fabricated footnote had been added to a leaked memo,” Jackoway told Voice. “She failed to disclose this information while employed by the city, even as the attorneys under attack suffered harm to their reputations and voters and the media wrestled with whether to believe the hoax.”
Michell claims the leak to Briggs was part of her effort to try to uncover what happened and that she didn’t reveal she shared the document in 2020 because she was considering whether to be a whistleblower.
“What mattered to me was transparency and the truth,” Michell said under oath.
The voters do not care about ASH. Otherwise, they would display their concern at the ballot box when in fact the opposite is true. When will you learn?
Total incompetence on city hall’s side, or artful fraud? Deceitful protagonists on Cisterra side took advantage of incompetence, or complicit in the artful fraud. I want to know the truth. Don’t let Gloria’s settlement keep us from learning the truth and holding people accountable. The taxpayer will be footing this fraud for decades to come.
The 101 Ash St. transaction is not as complicated as it appears. Some could argue it’s a typical City of San Diego real estate deal.
What’s different is we get to see how and who scammed the City (taxpayers) and how much they pocketed.
Outstanding journalism. Thank you!
If we had a relative who we cared about that was getting into financially ruinous real estate deals as frequently and as harmfully as has the City of San Diego, we would petition the courts to appoint a conservator to protect that person’s interests. I don’t know if there is any way to approach the courts and ask for the appointment of a special master to oversee all City real estate transactions until such time as the City can demonstrate a greater level of competence, but it sure seems like it would be a good idea.
Kind of like special prosecutor Jaworski? Paul, you and all the others have been sold down the river. The lady in D2, a virtual unknown and supported by ASH ringleaders is going to a runoff. Yet, nobody has the courage to speak truth just whiners.
Honey! Nobody cares! My neighbors are more interested to getting from point a to point b in the fastest way possible then gorging their faces with Krispy Creme Doughnuts and In n Out Burgers all while driving sleek Tesla’s not to mention most men with lard as bellies behaving like boys.
Somebody tell the truth!