August 17, 2005
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City Attorney Mike Aguirre's 15-point recovery plan stirs a fundamental question: Is it a practical alternative to San Diego's present course, or is it merely a political sideshow designed to stoke Aguirre's expansive ambitions?
Let the facts be the judge.
The centerpiece of Aguirre's proposal is that he single-handedly negotiate a consent decree with the Securities and Exchange Commission, acknowledging the obvious -- that the city made material misstatements in its bond offerings. Aguirre already has begun drafting such a document, and he appears intent on proceeding without the support of the City Council, the city's independent investigative panel and the city's outside auditor, KPMG.
For that matter, Aguirre does not have the backing of the SEC in pursuing this rogue line of action. On the contrary, the SEC staff has urged the city to complete the independent probe being carried out by the audit committee under former SEC chairman Arthur Levitt. Aguirre wants instead to shoulder aside Levitt into a lesser role and replace KPMG with a new accounting firm, Macias Gini & Co., which has privately expressed opposition to the notion of taking over KPMG's work on the stalled 2003 city audit.
Tellingly, the SEC staff also has stressed it will not enter into a consent agreement until the complex issue of individual culpability by city officials has been established. This is the prime purpose of Levitt's independent investigation, which Aguirre rashly wants to shut down. What's more, the SEC typically does not agree to any settlement until a remediation plan is in place, and San Diego is far from having developed a comprehensive remediation plan. Yet the city attorney, always in a hurry, says he will launch settlement talks with the SEC this week.
Making an accord with the SEC even more remote, Aguirre has not been authorized by the City Council to enter into negotiations. In fact, precisely the opposite has occurred. The council last week voted unanimously, over Aguirre's objections, to hire a new law firm to represent San Diego before federal regulators. In response, the city attorney petulantly declared the council's action invalid and decreed that he alone "will be assuming the role of defending the city before the SEC." That is the way junta strongmen behave in some quarters of Latin America, but that is not the way democratic government functions on this side of the border.
To her credit, acting mayor Toni Atkins made it clear yesterday that the City Council intends to hire a new legal counsel regardless of Aguirre's absurd claims that it has no right to do so.
There are a number of solid ideas among the city attorney's 15 action items, including proposed changes in the city charter to require voter approval of pension benefit increases and a restructuring of the retirement board to comprise seven independent trustees and no members vested in the pension system. Yet it is hard to believe Aguirre is serious about implementing these reforms when he announces them at a press conference before even informing, much less consulting with, members of the City Council.
During this unstable interregnum before an elected mayor is seated, Atkins must assert her limited authority resolutely in the face of Aguirre's disruptions. She got off to a good start yesterday by injecting a sane voice into the unseemly quarrels that swirl all around Aguirre. San Diego would be far better off, Atkins said, if the city attorney would work with the City Council in good faith rather than at strident odds with it.
Given Mike Aguirre's record of late, that hopeful scenario is not at all likely.