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Blog Archives - 2006 Third Quarter


Manchester's Monstrosity will cost 4 seats on the Council - 09/28/06


by Pat Flannery

If Sanders and his developer backers are so sure their five votes on the City Council, Faulconer, Atkins, Maienschein, Madaffer and Peters, sitting as the Redevelopment Agency, can ram this Monstrosity through, then the war is on.

According to the developers' PR firm, the U-T:

"Waring said the agency could use money set aside for parks to acquire the property. That would leave Manchester with rights to build 2.65 million square feet of buildings to offset his costs for constructing the Navy offices".

If Sanders, through Waring, pulls this off for the developers, he is well on his way to
following Swartzenagger as the next Governor of California. They are already talking about it. The San Diego developer community went all the way with Pete Wilson. They can do it again, Sanders is a charmer.

Smooth-talking Wilson destroyed San Diego for generations by downgrading vast areas of single family residential lots, to multi-family apartments and condominiums. Much of 92105 and 92115 became an instant slum and has remained so ever since. Sol Price once called it "Third World San Diego".

As a neighborhood-conscious realtor I watched in horror as
greedy developers like the notorious slum landlords, the Huffman brothers, demolished hundreds of San Diego's fine heritage single-family homes to make way for their obscene "six-pack" apartment hell holes. The old San Diego was gone forever. What do you tell a nice family, to whom you sold a dream Spanish-style home, who wake up a year later to find their nice little old lady next door gone and an ugly "six-pack" in her place?

Wilson enabled his greedy developer backers to graft their crime and drug infested apartments onto the existing infrastructure of sewer, water, roads, schools and city services, designed for single-family neighborhoods, without ever having to pay a penny in impact fees. No wonder these "free-market" developers paid Wilson's campaign tab all the way to Washington and Sacramento. And now they want to do the same with Sanders.
Make no mistake about it, that's the plan.

Time is short if we are going to stop them. While they are planning and concocting the rest of us have to work for a living. But we may have a better plan:

1. Get Aguirre to immediately release the SEC decree for the City as an entity.
2. That will trigger SEC actions against four City Councilors as individuals.
Atkins, Maienschein, Madaffer and Peters will be forced to resign.
4. That will deprive Sanders and his developer gang their votes on the Council.

The developers have declared war on us, not the other way around. Why do you think Sanders wants to keep the SEC decree under wraps? Because by doing so it keeps his four compliant votes on the City Council for as long as possible? He knows the SEC will do the recalls for us - when he lets them.

We can still save our City and do the State and the Nation an enormous favor by simply demanding the immediate release of the SEC decree. The only reason it is being withheld is to protect the guilty for their votes.

It is bad enough having to endure a rape by the public employees' unions, we now face an even bigger rape by the developers. "
Fingering the guilty is the first step back toward honest local government" is how the Wall Street Journal finished its editorial yesterday. Its endorsement should give encouragement and urgency to Mike Aguirre to break with Sanders on this and release the SEC decree immediately. It is within his power. He should not be helping Sanders protect guilty Councilors, which can be the only possible reason for the delay. The SEC finished its work long ago.

This Wall Street Journal endorsement clears the way. The SEC did its duty for the City, the State and the Nation, now it is up to Aguirre. These are crimes that cannot go unpunished, let alone protected. Release the decree Mike, it will change the entire dynamics of this critical situation.


Sanders is now the Developer-in-Chief. 09/27/06


by Pat Flannery

Today Sanders bailed out Manchester! The City will HELP him wall off the public.

No doubt this is the brainchild of Jim Waring. Read the News Release on his appointment January 10, 2006. And read Don Bauder and Matt Potter introducing Sanders' new head of Land Use and Economic Development in The Reader on January 9, 2006. Don and Matt have been blacklisted by Sanders Office ever since. Nobody in Fred Sainz's office will even talk to them now. Ask Joe Deegan (last sentence).

A few weeks ago I rhetorically asked whether there was "valium in the water". Now I wonder if that question was so rhetorical after all. It is hard to believe that the sophisticated populace of this sophisticated city could be so gullible and so silent.

Is there anybody left in the developer community who has not got a job in Sanders' administration? This guy is good. He gives a whole new meaning to corporate welfare. He just hires the developers' attorneys and gives them offices at City Hall. Now they can draw a City salary and represent their clients on our dime. We are actually paying them big salaries to run our City for and on behalf of the developers.

Here is the tax increment revenue of the CCDC. Can you imagine how much development capital they can borrow with that kind of annual revenue? Billions! There is no better source of development capital than revenue bonds. The trouble is, every single redevelopment project ends up with the Redevelopment Agency (the taxpayer), putting up all the money and the private "developer" owning or selling the property.

It will be interesting to hear how Jim Waring, a hard-core land use attorney, will try to distort the California Redevelopment Law to use CCDC money to purchase this land. We all need to become experts on Redevelopment Law, particularly the circumstances under which a Redevelopment Agency can legally use tax increment revenue to purchase land. It all depends on its use. Remember, the real purpose of using CCDC money for this deal is to save Manchester's Monstrosity.

When, not if, Navy Broadway goes back to BRAC, then we can use CCDC tax increment to buy the whole site. Nobody else will. The City has planning authority over that site. It would be a brave investor who would outbid the City.

This devious plan to save Manchester's Monstrosity will fail for the same reason Manchester's original plan failed: it clings to the same stupid assertion that the City Council has no role. Whatever deal Waring cobbles together with CCDC will need extensive vetting by the Redevelopment Agency i.e. the City Council. Maybe the U-T will finally discover that CCDC is not the Redevelopment Agency, just a sub-agency.

As I said on Monday, the Battle of San Diego will be fought behind closed doors. We need to keep our ears pinned to those doors. The next round of intimidation will come from Duncan Hunter: his admirals want offices with the best views on the planet.


CCDC is not the redevelopment agency and the U-T knows it - 09/26/06


by Pat Flannery

I was waiting to see what tack the U-T would take on Navy Broadway. I figured they would reveal their hand today. They did.

Kittle wrote an editorial and the "news" team wrote a "news" item.

Kittle confined himself to the narrow question of whether Manchester's project complies with the "qualitative" provisions of the 1992 Development Agreement. He decided to merely repeat the concerns of a recent "panel of outside architectural experts" who believed they could do better. Big deal, even I could do better.

It is significant that Kittle did not challenge the right of CCDC (the "developers' agency" packed with pro-developer nominees), not the Redevelopment Agency itself, to make this momentous decision on behalf of all San Diegans.

These developer types stick together, don't they. Bob would have had rotten eggs thrown at him next time he spoke at the Chamber of Commerce or the Lincoln Club, if he broke ranks on this. He may not altogether like "Manchester's Monstrosity" but he is not going to break with his developer friends - and advertisers.

CCDC is a service entity to the San Diego Redevelopment Agency, not the decision maker. It provides advice to the City Council when it sits as the Redevelopment Agency. CCDC is just another power-grab by developers aided by the U-T.

In line with this long-established deliberate policy of attributing powers and status to the CCDC that it does not have, staff "news" writer, Mike Freeman wrote today: "The redevelopment agency's board will once again hash over the development scheme for the site – called San Diego's front porch – at a board meeting tomorrow beginning at noon." That is a deliberate attempt to mislead the public. CCDC is not the redevelopment agency and the U-T knows it.


Will the unions now grab their chance? - 09/25/06


by Pat Flannery

Have you ever wondered how there can be five Democrats and only three Republicans on the City Council yet all but one, Donna Frye, consistently votes as Republicans?

The answer: the unions control these five Democrats. And these unions long ago made a pact with the developers. John Moores, Doug Manchester, Bud Fischer, all that developer gang, can develop anything they like, extort all they want from the Redevelopment Agency, provided they agree to a union closed shop during construction and in the finished product afterwards. That’s how it works.

It is time these Democrats started voting like Democrats. If they did, it would change what is happening in San Diego. Much of what has already happened would never have happened. NTC certainly would never have happened. The 30 foot height limit in Hillcrest would never have been busted. It should never have happened.

Right now the biggest culprit is
Jerry Butkiewicz (you don't get written up in the San Diego Metropolitan Magazine unless you are on the side of the developers). He is Secretary-Treasurer of the San Diego-Imperial Counties Labor Council and hard at work trying to make up for lost time on Doug Manchester. Unlike Moors, Manchester has been able, so far, to resist the unionization of his downtown hotels.

The titanic battle going on right now between these two headstrong men will decide the future of the Navy Broadway complex. All
Butkiewicz cares about is his union dues. That's how Italiano and Saathoff got us into the pension crisis.

Manchester has failed to get his project by the City Council without a vote. Due to this City Attorney ruling, it must now come up for a vote. "Does the City Council retain any specified control over the development of the property at the Navy Broadway Complex?" Short answer: Yes. A very important City Attorney opinion.

To Manchester's chagrin, CCDC proved unable to deliver. The Council baulked. In light of the City Attorney's opinion it could do no other. So far,
Butkiewicz has failed to exert any influence on the Navy Broadway project. Up until now it was headed to be another non-union Manchester holding. This is his chance.

Manchester is desperate.
Butkiewicz will try to unionize all of Manchester’s hotels in return for steering Navy Broadway through City Council. He will claim, with some merit, that he is able to get just about anything through this City Council. There is no doubt he does own these five Democratic votes. They would not be there without his “independent” spending at election time. This is the gaping hole in American democracy": "Independent Action Committees".

The scary thing is that
Butkiewicz needs only two votes, to go along with the three pro-developer Republicans, Madaffer, Maienschein and Faulconer. We all know he has Peters so all he really needs is one. If Maienschein baulks, as he sometimes does, he still only needs two. If Atkins is planning a new career outside politics in banking and redevelopment, alongside Jennifer LaSar, she will be the first to “see the merit” in Butkiewicz’s argument. She spins lies beautifully. She may well be working very closely with Butkiewicz on this right now. It is the sort of thing at which she excels.

Even without Atkins that final one vote will be easy. Young and Hueso have to get re-elected to a second term and will not be able to do so without Butkowitz support.

The real "Battle of San Diego" will not be fought in the open. It will be fought over the telephone and at furtive meetings all around downtown in the next days and weeks. The people will do well to watch and read the signs and portents correctly because the individuals having these furtive conversations and meetings will be bargaining away our quality of life for many generations to come - behind closed doors!

It is vital that they know that we know what is going on. It is vital that we, in particular, warn those union-dependent Councilors, that we will be watching their every move and deciphering their "spin". They need to know that we are not as stupid as they think.

I am a supporter of labor and unions but clearly see that Butkiewicz hasn't achieved very much for the workers of San Diego if by selfishly and narrowly boosting his own union dues he has helped greedy developers drain the financial lifeblood out of their city. He is not helping labor by enabling developers to ruin the quality of life of working families for generations to come. He is not helping labor by turning over ownership of everything worth owning in this city, to greedy individuals like Moores, Manchester and Bud Fischer. Hardly a proud legacy for a labor man.

No, Mr. Butkiewicz
is just another face of the same god of Greed. Like Atkins, he spins lies beautifully. Like traitors everywhere, the developers couldn't have done it without them. The "unkindest cut of all" is the one from your friends.


Will Manchester try to sue the City? 09/23/06


by Pat Flannery

Manchester may lash back with threats of massive lawsuits. That's how he operates.

He has much to lose and will pull every trick in his extensive repertoire. We have seen him in action before, so has Oceanside. But we too have much to lose: we could lose our entire waterfront to this concrete-pouring bully.

The present danger is that LaSar, Graham and the carefully picked developer-friendly CCDC Board, will "fix" it for him behind closed doors, under threat.

It could even be that, in postponing their September 27th decision, they were deliberately creating space for him to draft an aggressive lawsuit against the City, claiming that while he has scrupulously complied with the 1992 Development Agreement, the City has acted in bad faith. This could all have been staged. It could even be that LaSar & Co. plan to articulate that threat for him. If they do, the moment they start we will recognize it. In other words, if they don't fight it, they were in on it.

That would be a real bad mistake for LaSar, whom I could actually begin to trust if she was really being sincere in her reason for postponing, that she really listened to Toni Atkins, who knows that the City Council has no choice but to exercise its role, despite what Peters says, and that that will kill Manchester's project. The people are not behind it, so if the CCDC fail to ram it through, it will die.

But Nancy Graham could still be about to put on her good citizen costume to play her part: that she had the best interests of the City at heart all along; that it is still in the best interests of the people of San Diego to avoid the massive financial liability of foolishly breaking a contract with this fine upstanding San Diegan, Doug Manchester. Instead, she would save this fine project from the clutches of the obstructionists.

If she starts that little song and dance act we will know that she is really working for Manchester even though we are paying her salary. Or maybe she will look around, see the writing on the wall, as Toni Atkins did, dump Manchester and confine herself to the job she was hired to do. Now wouldn't that be nice for a change.

We've seen Manchester's extortion tactics in court more than once, so has Oceanside. But this time it is different. This time we say: bring it on. This time developer-friendly City Attorney, Casey Gwinn, is not there to put up a fake fight. This time developer Doug and his team of fancy lawyers will be going up against a real City Attorney, who also loves a challenge, who sent developer
Roque De La Fuente home whimpering to his wife without the $150 million he promised her.

If Doug bet on Nancy Graham then he has lost. She may have oversold herself a bit. The CCDC is only an agent, not a principal. Any powers it claims remain those of its principal, the City of San Diego. Besides, the City did not delegate all its powers with regard to the 1992 Agreement to CCDC. The City Attorney has made that very clear.

Additionally, although I am not an attorney, I can read plain English: the
1992 Development Agreement with the Navy on page 12, Section 4.8 says "Third Parties. The contractual relationship between the City and the Navy arising out of the Agreement does not create any third party beneficiary rights".

Unless Doug Manchester speaks an entirely different version of plain English, those words mean that he, a third party, has no rights arising out of this Agreement.

If I hear anything about a Manchester threat to sue the City,
"arising out of this Agreement", not only will I know that "Pappa" Doug is trying it on, but I will also know that anybody who might try to articulate such a spurious threat, is working for him. Such actions could have consequences, if that person works for the City.

Those of you who attended last Tuesday's September 19, 2006 City Council Meeting undoubtedly forced another round in this battle. Manchester's project is in trouble as a result. Those of you who continue to think that the people of San Diego should not allow the privatization of those precious 15 bay front acres should read up on the September 27, 2006 CCDC meeting and try to attend. You can make a difference.

Here is the CCDC Staff Report "seeking directions from the Board on how to proceed with its review of the qualitative elements of the proposed design of the project by the Developer". Perhaps we can give them some "citizens" directions - don't bother. The citizens will decide through their elected City Council.

In the meantime as of today Saturday, September 23, 2006, at 5:30 P.M., CityTV are only showing the first half of the City Council meeting of Tuesday, September 19, 2006, which means we are unable to review all the important points made by both the public and members of the City Council at that crucial meeting. I find that very disturbing.


We could become the Alexandria of the Modern World. 09/21/06


by Pat Flannery

The U-T has just put online an amended version of their earlier print piece (amendments seem to be in the air these days) about Doug Manchester's anger at LaSar's indefinite delay of CCDC's compliance determination of his Navy Broadway project. They have added the following two paragraphs:

"At the City Council meeting Tuesday, Manchester testified that a lease could be signed contingent upon redevelopment agency approval, thus allowing the project to move forward without a vote.

However, Manchester said yesterday that the Navy's Southwest Regional Command in San Diego isn't sure a lease with contingencies could get necessary approvals in Washington, D.C."

The U-T probably got a call from Manchester this morning. He is trying to put a scare in the public mind that the Navy may not buy into a contingency lease deal, especially now that he can no longer assure them that the City Council is putty in his hands, as it was before Mike Aguirre weighed in with his amended legal opinion.

I am sure the U-T was not the only one to get calls from Manchester this morning. Mayor Sanders for one, must have got an earful. The U-T wrote:  "Reached in Rhode Island, Manchester said he's talking with Mayor Jerry Sanders' office and the Navy in hopes of pressuring the redevelopment agency to vote."

heir brilliant tactic now seems to be to put a scare into the public mind that “It's headed right toward BRAC”, as his
Executive VP, Perry Dealy is frantically putting it to anybody who will listen. Good. I hope it is. But they are completely underestimating that public mind.

Poor Doug. He got on that plane convinced he had it all wrapped up. How he must wish he had Hal Sadler back in LaSar's job. But it wouldn't have made any difference. Sadler would have fared no better than LaSar. Atkins and LaSar were just smart enough to recognize it. Smarter than Doug. Doug is not a happy "Pappa" today.

Only somebody as arrogant as "Pappa" Doug would threaten in effect: "if you don't do as I tell you, you will have to decide this for yourself and you know you will make a mess of it". Maybe now we can really start talking about just how big of a mess we can make of it. Maybe we could build a huge mess of an international cultural center down there instead of his bay-side hotel-condos for the rich. We could make an even  bigger mess of it by building a world class library to rival the ancient Library of Alexandria.

We already have the world famous Scripps Institute and the world famous San Diego Zoo. Why not the world famous San Diego Library? Now that would be an icon to beat all icons. Imagine scholars from all over the world coming to study at our world famous Library. Wouldn't that beat all?

If Joan Kroc were still alive I bet she would want something like that to complement her
International Institute for Peace and Justice? Is this concrete mixer, "Pappa" Doug, the best we've got in this great city? Is the raw greed worshiped down at the Lincoln Club the symbol of San Diego? (The Lincoln Club is the developers' club. They all belong to it, even Perry Dealy. Especially Perry Dealy. I understand even Toni Atkins has been known to drop in from time to time, or at least she used to. Better check ahead before going down there next time Toni and Jennifer. It could be a cold house for fallen-away "pioneers".)

This unique Navy Broadway site is not just an opportunity for a San Diego icon, it is an opportunity for an American icon. Could we not appeal to the American pride of  Bill Gates and Warren Buffett for example? What will be the the icon of their capitalism? What shall be their memorial? Concrete and greed? Or something for the human spirit?

San Diego can appeal to such giants of our time and offer them a unique opportunity to build a magnificent symbol of the age in which they prospered or San Diego can let "Pappa" Doug and his money-grubbing developer friends build an ugly icon to their ugly god of greed. We can either symbolize the ugly American or the high-minded American. It's our choice. We could become the Alexandria of the Modern World.



Is CityTV being censored? 09/21/06


by Pat Flannery

Is the City of San Diego Cable Office subject to political censorship? Try this. Here is a screen image of it for the record, taken at 9:30 A.M. September 21, 2006. It is now Thursday and Tuesday's pivotal City Council Meeting is still not online.

I am eager to hear the exact words Nancy Graham used when she kindly offered to listen to our City Council's comments before she would go away and decide the Navy Broadway issue for us - a new low in San Diego governance. I want to create a link to it so I can give its exact position on the tape. I also want to link to the part where Captain Allen confirmed that NTC was given to McMillan at less than market value.

So I called (619) 533-4784 and asked what gives. Technical problems. I asked whether they were political technical problems or technical technical problems. You know the answer. But it was reassuring to be told that I was not the first to ask the same question today. So if they are monkeying around with when the public can see City Council tapes, they have been warned - the public is watching.

They did the same thing last year with the tape of Leslie Girard announcing at a Council Meeting that the City had authorized Mike Aguirre's law suit against the Pension Board. That clip had "technical problems" for months, right about the time Aguirre needed it to prove in court that he had indeed been authorized to file on behalf of the City. Peters was insisting that Aguirre was suing the Pension Board in his own name only.

Is Peters tampering with the streaming of critical video tapes? These "technical problems" are just too convenient to be coincidental.

Peters led off the City Council Meeting on Tuesday by announcing that the City Council had no role in approving the Navy Broadway project, despite the fact that he had received Mr. Aguirre's
Addendum to his Friday's legal opinion on Monday! Note that Aguirre's Addendum is dated September 18th. I haven't heard Mr. Peters deny that he had received it on Monday, a whole day before Tuesday's Council Meeting.

Perhaps he is anxious to redact his remark about the City not having a role.

From what we have seen of our Council President, Mr. Peters, he is not above reminding CityTV who is boss. If Tuesday's Council Meeting is not up and streaming by day's end, I for one will be convinced there is political censorship going on.



LaSar gives Manchester's project the coup de grâce  09/20/06


by Pat Flannery

Toni Atkins is one savvy politician and savvy politicians, like sailors, immediately sense a change in the wind. Her partner, CCDC Chairperson Jennifer LeSar, is wise enough to listen to Toni when it comes to politics. She obviously listened to her today and issued this CCDC News Release.

Its last sentence must be giving "Pappa" Doug conniptions tonight: "No formal date for a consistency determination meeting has been scheduled".

Just when he thought he had either bought or outsmarted everybody Toni Atkins gives Jennifer LaSar cold feet. I think Toni gave Jennifer good advise. If she had gone to bat for "Pappa" Doug on this, she would have lost. That's the wind Atkins sensed today.

Everything changed when Mike Aguirre weighed in after personally reading the Development Agreement. Atkins knows that Aguirre now has it right. The City Council cannot dodge their oversight of CCDC. It was really dumb of them to think they could. It was even dumber of Manchester to believe Floridian Nancy Graham when she assured him that she could deny the City Council any role in approving his project.

I guess Toni and Jennifer will not be going to work for Manchester Financial after all. Maybe Toni decided it was time to put distance between Jennifer and Manchester. Maybe she thought he was just too dumb. His entire Broadway plan depended on making CCDC into something it is not - the "downtown redevelopment agency", as the U-T annoyingly keep calling it. It is not, the City Council is.

Manchester thought he owned CCDC. I bet he is sorry he moved Hal Sadler out of there only a few months ago. Now that was really dumb. This would never have happened to Manchester if Sadler was still chairing CCDC.

In any case he may not have a job for anyone now that these two ladies have given the
coup de grâce to his Navy Broadway project and halted his triumphant march along San Diego's bay front.

It has been a good day for Mike Aguirre: he put two big developers in their place,
Roque De La Fuente and Doug Manchester. He deserves an early night tonight.

It has also been a good day for San Diego. I'm sure Bob Kittle will write a big congratulatory editorial for Mike on having saved the City $100 million. Yeah right.



Thanks Mike. You're everything we knew you were 09/20/06


by Pat Flannery

Now who could have written this? Short answer: Mike Aguirre himself.

It is an Addendum to Fridays' Opinion. Note that Mike has added an additional footnote at the bottom of page 2:

"This footnote is being added as a result of the City Council informational meeting held on September 19, 2006. The sections cited in this paragraph were meant to be a general description of the subject matter contained therein, and were not meant to be dispositive of all issues set forth in each section. Accordingly, a further memorandum will be issued relative to the City’s role under CEQA."

I knew he wouldn't let us down. The poor guy needs eyes in the back of his head, but fair play to him he must have stayed up half the night reading the 1992 Development Agreement with the Navy. And look what he has come up with! Please take the time to read the entire Development Agreement tonight, let's give Mike a bit of help here. Maybe somebody out there will spot something else useful to Mike.

Kevin Faulconer, Scott Peters et al will now have to do the job they are getting paid to do whether the like it or not. Even though they didn't want to, they now have to ensure that their friend Doug Manchester's little project is treated like all the other projects that come before the City Council for approval - because the 1992 Development Agreement with the Navy says so!

On page 17, Section 5.2f says: “The Developer shall not begin construction on any increment of the Project unless and until appropriate assurance has been provided to the City for the completion of those related public improvements described in Attachment 4 of Exhibit C.”

On page 18, Section 5.3 says: “construction standards and specifications for buildings and structures developed on the Property only shall be those City construction standards and specifications in effect at the time that any building permits are issued”.

On page 18, Section 5.5 permits the City to impose fees and charges: “intended to cover City costs associated with processing permits for the development of the Property, including fees and charges for applications, inspections and plan review, which are existing or may be revised or adopted during the term of this Agreement”;

On page 19, Section 5.6 obligates the Developer to: “provide City with a preliminary schedule for its development which will note anticipated dates for required performance of certain activities by the City, such as the review of plans and specifications, the issuance of building and related permits, and similar matters”.

Finally, how in the world could Nancy Graham, Doug Manchester or anybody else who read the Development Agreement, have come up with the idea that anybody but the City, through its City Council, could have provided the:

"careful planning and extensive coordination that will be required to ensure that the
[1.9 acre] open space will meet the City's needs while at the same time allowing the construction of a [subterranean] garage to proceed without imposing unreasonable financial burden(s) on the developer(s)", as described in Section 5.9b, page 22?

This must be one of the most audacious and outrageous attempted coups in American municipal history. This Nancy Graham should be given an airline ticket back to Florida immediately, if not sooner.

And sorry Papa Doug, but you'll just have to stand in line like everybody else. Good luck getting your project through planning before January 1, 2007. Have a nice evening Mr. Manchester.


Bauder on Sanders' monitor - 09/20/06


by Pat Flannery

Thank goodness the U-T fired Don Bauder, otherwise we would not be reading his valuable insights today. They would be too insightful for the U-T.

Today in The Reader Don describes how "Sanders' office has interviewed two former chairmen of the Securities and Exchange Commission: [Harvey] Pitt and Richard Breeden" to be his new "monitor". Bauder goes on to tell us more about these two Levitt look-alikes that Sanders is fighting so hard to have appointed "monitor".

Mr. Bauder has been reading Gary R. Weiss's book "Wall Street Versus America" and doing some fine research of his own. His sage insight gives us some idea of what will happen to our city if Sanders and the "businessmen" who elected him manage to bring in their Wall Street "monitor" and put him in charge of our finances.

This guy, if appointed, will be the death knell for open government in San Diego. His job is to ensure the exact opposite - for the exclusive benefit of Wall Street. Those guys are not social workers you know.

Only Bob Kittle will know what's happening on the inside. The rest of us are to become mushrooms. Now I understand what they mean by their trickle down theory.


We need a Citizens' Action Plan - 09/19/06


by Pat Flannery

I sat in the Council Chambers today as Nancy Graham gave her address to the City Council. She actually said she would "listen to their comments" then go away to decide the future of our Navy Gateway project. It's on tape. I almost blew a gasket. I was not alone, the discontent and frustration among the public today was palpable. The performance of this arrogant unelected official today must never be repeated.

I brought along a printout of the legal opinion I have been blogging about and as I expected, it became her speech almost word for word. There is no doubt, she wrote that legal opinion. She used to be a land use attorney. This is her area of expertise.

It may be significant that there was no sign of Aguirre or his usual deputy, Karen Heumann, just newbie
Huston Carlyle who looked very uncomfortable up there, especially when I said I thought Nancy Graham had written the opinion he signed.

The public speakers were great. Speaker after speaker put forward overwhelming arguments why the people of San Diego should decide the Pacific Gateway, not Doug Manchester and his employees-in-waiting. He's going to have lots of high-paying jobs when all this is done. With their respective political and financial experience, Toni Atkins and Jennifer LaSar will be very valuable to Doug. Jennifer has already left the Bank of America and Toni is termed out on the Council. Both will be looking for jobs.

It is heartbreaking that the good people of this city will have no say whatsoever, not even through their elected representatives, in a once-in-a-century decision. How did we get to this deplorable state?

I found it ominous that Ms. Graham and the Manchester people kept introducing the North Embarcadero Project as if it were part of today's discussion. Manchester is obviously staking his claim to the entire bay-front, all the way around to the airport and he wants everybody to get used to it. If we don't stop him at Gateway we never will. He will just plaster one monstrous hotel after another all along the bay front.

One thing for sure, this City Council is not going to stop him. With the exception of Donna Frye the developers own them all, lock stock and barrel. Manchester was effusive in his praise of Kevin Faulconer today. He owns Faulconer because he and the other developers were only too happy to pay for his election to replace Zuchett and will do so again wherever necessary.

Zuchett was owned and operated by Saathoff's Firefighters Union Local 145. Because it takes a lot of money, you can't get elected to the City Council without selling your soul to either the developers or the unions, or both. That's the sad state of our democracy in San Diego today.

Add to that the almost complete emasculation of the PACs associated with each redevelopment project and you get an idea of how much the developers have  taken over this city. Have you attended a North Embarcadero PAC meeting, or any PAC meeting, lately? The developers control those meetings.

It is clear that the City Council, as an institution, has let us down badly, and is not likely to change any time soon. But we have an excellent ally in Andrea Tevlin, the Independent Budget Analyst. Read what she had to say in her July 27th Report, particularly page 4 where she talks about the creation of a Community Redevelopment Commission. We need an elected Internal Auditor to go alongside her, then we may start to clean up our city government.

there is no point in relying on this City Council and no point in recalling them, some way has to be found to impose the will of the people on them. We have it. Money. We control the purse strings. They can't do anything without us.

The City's two main sources of money is the issuance of municipal revenue bonds and the city's portion of real estate taxes. Public scrutiny of revenue bonds must be increased and tax increment diversion halted. Far too much property tax is going to wasteful public-private redevelopment partnerships, where the public always loses.

The best way to get our credit rating back is to show the rating agencies that the people are in charge here. Therefore job one is to stop Navy Broadway. This is a test.

In arguing not to let it be handed back to BRAC, Captain Mike Allen representing the Navy today, made an interesting remark: he warned that this time full market value would have to be paid, unlike NTC! Maybe he needs to go back to political school for letting that one slip. But now it's official: NTC was a giveaway.

So, let Navy Broadway go back to BRAC. I would prefer to see the City pay full market value for it, so the people can decide what to do with it, rather than see it go to Doug Manchester for free. Besides, who is going to bid on it other than the City? Manchester? Not likely. These guys are used to getting everything for nothing.

So let's get those community meetings going that Mike talked about. We need our own Citizens' Council. We need a Citizens' Action Plan. We need to show Nancy Graham that California is "a brand new game", that this is not Florida; that we take our democracy seriously here; that in California the people rule, not developers' lackeys.

We can start by demanding our $100 million back (CCDC owes the City $100 million), we can demand to know why they spend $450,000 per employee - "$13 million budgeted for the administration of 28.60 employees". What is all that about?

But above all we can scrutinize every bond issue from now on, BEFORE it is issued. And we should refuse to vote one more dollar in bonds of any description until we have in place our own elected Internal Auditor, accountable to us, who will tell us what is being done with our money.

And all this before we hold any public official to the letter of the California Brown Act and to the San Diego City Charter. Who says we don't have power?


San Diego is becoming the national model for developers - 09/19/06


by Pat Flannery

It is informative that Bob Kittle does not call for the release of the draft SEC enforcement order in his U-T editorial this morning. Nor does he call for the resignation or recall of any City Councilors, even though he says they are guilty of securities fraud.

His objective, as I have long believed, is to leave these deeply compromised City Councilors in place, including his friend Scott Peters, because being guilty, they can now be manipulated. He just wants the SEC to establish their guilt.

Kittle is merely the PR person for the same developer cartel that elected Jerry Sanders and is now molding San Diego into a developers' dream city.

The citizens are being squeezed out of all decision making. Last year CCDC hires Florida Republican Nancy Graham, then Hal Sadler leaves CCDC in her capable hands so he can go to work for Doug Manchester full time. Now we are about to get a financial monitor who will be chosen for having the same impeccable developer credentials as Nancy Graham.

San Diego is becoming a model city all right. It is becoming a model for how developers can seize control and run an entire city for their exclusive benefit.

Kittle's editorial also raises a serious question regarding the California Brown Act. He says: "
In a closed-door meeting last week, John Hartigan, the lawyer hired to represent San Diego before the Securities and Exchange Commission, warned five City Council members they individually could face SEC civil charges for their role in violations of federal securities laws."

First: who leaked the proceedings of that Closed Session to Kittle? Is Scott Peters leaking everything to Kittle and the U-T? Somebody is. Kittle is participating in illegal activity by accepting such privileged information let alone publishing it. The City Attorney should sue the U-T for interfering with and compromising the legitimate governance of San Diego.

Second: John Hartigan should not have
"warned five City Council members they individually could face SEC civil charges for their role in violations of federal securities laws." In doing so he too violated the California Brown Act.

I spoke at the public session immediately prior to the Council going into that Closed Session and pointed out that Section 54956.9 (b) of the Brown Act does not cover "significant exposure to litigation" against individual Councilmembers. Both Mike Aguirre and John Hartigan acknowledged that I was correct and publicly promised not to discuss the liability of individual Councilmembers at the Closed Session. According to Kittle, Hartigan went right in there and did precisely the opposite.

The citizens of San Diego no longer have political representation. The City Council is now the pawn of developers and the San Diego Union-Tribune is their PR firm.


They want to place CCDC above the City Council - 09/17/06


by Pat Flannery

We may be expecting too much from Mike Aguirre. Mike is the best, there is no doubt about that, but there is only so much one man can do. He may be about to unwittingly sign a disastrous legal opinion that will have far-reaching effects. That opinion states that "the City and/or the Redevelopment Agency do not have authority to review, modify or veto a consistency determination granted by CCDC"

I created an HTML version of this important legal opinion his office will give to the City Council on Tuesday. See page 32 of Tuesday's Agenda. (Unlike PDF, HTML format allows me to link to paragraphs and sentences inside a document.)

This opinion creates the dangerous myth that the CCDC is independent of the City Council. If allowed to stand it will be a huge victory for developer interests and a huge defeat for citizen government. It purports to make an agent the equal of its principal.

It asserts that the actions of CCDC, a mere agent of the City of San Diego, may not be "reviewed" by its principal and that this is a unique situation. It would certainly have to be. The problem is there can be no unique agency situation. Agency law is the same for everybody. Nor is there any need for an express provision in a contract to reiterate the fundamental law of agency as this opinion asserts. A principal always retains the
final decision-making power.

Then it falsely asserts that any delegation of authority to an agent is irrevocable:
"The City Council as the legislative body of the City exercised its discretion and delegated the determination of consistency review to CCDC. Any further right of review over CCDC’s determination is not authorized by the Development Agreement."

The second sentence does not follow from the first. A principal does not relinquish its "right of review", or any other right for that matter, by defining the duties of its agent in any agreement with a third party. Yet that is exactly what the second sentence says.

The City merely defined the duties to be performed by its agent, CCDC, in a 1992 Development Agreement with the U.S. Navy. This CCDC is no more than an in-house property management company, created and wholly owned by the City of San Diego. Its duties with regard to the 1992 Development Agreement arise in that capacity.

What worries me is how this got past Aguirre. Is his attention elsewhere? The danger exists that while he is (quite properly) engaged in "trying to void the illegally created retirement benefits" even more dreadful things are happening on his watch.

It is
informative to note who is asking for this opinion - the CCDC and Council President Peters. The Navy is not.

The purpose of Tuesday's City Council meeting is to "accept" this opinion. 

If signed by the City Attorney, it will become a powerful weapon in the hands of the development community, particularly Doug Manchester. CCDC will brandish it as its Freedom Charter for years to come. There can be no doubt that CCDC is the tool of these developers. It has become in reality the agent of the development community rather than that of the City. And Jerry Sanders was elected by these developers!

This is the second time within the space of a week that Mike has been unable to resist the power of this developers' Mayor. Last Thursday he was unable to get Sanders to lift his arbitrary "wraps" on the SEC enforcement decree. This developers' Mayor wants to keep the SEC decree "under wraps" so he can use it as leverage against vulnerable members of the City Council to do things like cede power to the CCDC, which in reality cedes power to the developers who elected him.

Mike Aguirre must fight these two attacks on citizen government by first calling on Mayor Sanders to lift his "wraps" on the 21 page SEC decree. Then Mike must refuse to sign this outrageous opinion, drafted by pro-development elements in his office, granting powers to CCDC which the City Charter reserves for the elected City Council.

This opinion reads to me like it was written by ex-land use attorney Nancy Graham, now CEO of CCDC. Perhaps it was. This lady owned a development-consulting firm with her husband while heading the Downtown Development Authority in Palm Beach Florida. Such conflicts of interest do not seem to bother her.

The key to the CCDC issue is the law of agency, not contract law or Federal powers law. That is a smokescreen. Mike is on firm ground refusing to sign a document that misapplies agency law. It purports to elevate a stated contractual service to be provided by an agent, into an exclusive power. If that concept were to be applied in the general business world there would be chaos. Can you image listing your home for sale and finding that your realtor had more power than you? How ridiculous is that?

Just because a Development Agreement with a third party, in this case the Navy, mentions that the City has charged CCDC, its agent, with a certain task,  does not mean it has lost the right of oversight of that agent. The test is: would the exercise of the City's obvious right, indeed duty, of agent oversight, invalidate the 1992 Development Agreement? Of course not. And nobody is claiming that it would! Least of all the Navy.

In fact if the City Council proceeds on the basis of this flawed legal advice, somebody like Mel Shapiro might sue to have its actions nullified based on false advice from its City Attorney. Therefore both the Navy and Doug Manchester would be well advised to have the City Council sign off on this important determination of consistency.

We all know what will happen if Mike lets this through. Without any right of citizen review, Doug Manchester will get to wall off the citizens from their bay front. And the CCDC tail will wag the City dog on many more development projects. In fact I am told they are planning on creating many more CCDC look-alikes around the city.

The CCDC and SEC issues, as explained above, are linked. Sanders is using fear of the SEC as leverage against vulnerable members of the City Council. The SEC will not proceed against individual officials until it has dealt with the City as a whole. Therefore the longer Sanders keeps the 21 page decree against the City as an entity "under wraps" the longer he has leverage over the individual members of the City Council.

His pointed and authoritative presence at the public portion of the Special Closed Session of the City Council last Thursday, called specifically to reinforce those "wraps", made that abundantly clear.

What he knows, but is not telling the public, is that there will be several more SEC enforcement decrees against sundry individual City officials both elected and unelected. He knows that the key to understanding the SEC issue is this vital piece of information, but instead of giving it to the public he and others are manipulating it.

Bob Kittle wrote a U-T editorial bemoaning the fact that the 21 page SEC decree did not contain the names of any officials. Council President Scott Peters then expressed public "disappointment" that Kittle wanted officials such as himself named in the decree. The overall impression created in the public mind was that there will be only one decree. That is exactly what Peters and Sanders wanted the public to believe. And that is what Kittle articulated in his various editorials.

Was Kittle in on this? Did he and Peters figure this out together in the La Jolla Country Club? Was Peters the one who leaked the SEC decree to Kittle? Kittle's U-T editorial certainly contributed mightily to the public impression that there will only be one catch-all enforcement decree. Surely he knew that the SEC always deals with a  city and its officials separately - or is he just not as clever as his bowtie suggests.

In any case if Mike Aguirre does not beat them on both issues, the developers will get their Wall Street monitor to shepherd through their massive development bonds (ballpark bonds on steroids), the CCDC will be confirmed as the agent of the developers rather than the City of San Diego and corrupt officials will get a pardon for making it all happen. Welcome to politics.

The trouble is the citizens are relying on one guy, Mike Aguirre, to go up against all that developer money, now with their new Strong Mayor, Jerry Sanders, in place.

The sooner Mike starts those community reach-out meetings he talked about recently, the better. Maybe somebody out there will come up with how to save citizen government in San Diego before it is too late. Right now the tail is wagging the dog.


Go ahead Mike, "obstruct" the hell out of them - 09/14/06


by Pat Flannery

I went down and did my civic duty (as I saw it) at City Hall today and asked, indeed pleaded with the City Council to stop playing games with the SEC enforcement decree and release it to the public. After all it is our decree too. We are the ones who will get to pay for whatever penalties the SEC may impose and the sooner we see it the better we will sleep at night.

I heard nothing to change my opinion that all this secrecy is for the protection of individual City Council Members rather than for the City as a whole. In fact all this political chicanery may be starting to annoy the SEC and may actually be working against us. Levitt may have some spies inside the SEC but I doubt he has many friends. He is just a con-man and a blowhard. He has such a gigantic ego that, as Gene Cubbison quipped to me today, he sees his face on Mount Rushmore.

Basically my point was that Section 54956.9 (b)
of the Brown Act does not cover "significant exposure to litigation" against individual Councilmembers, only against the "local agency" itself and that the SEC is not threatening any litigation with either. They don't need to. They are the law as far as this enforcement is concerned. They are the ones who issue the decree, they don't need to go to a judge for anything.

So there can be no "significant exposure to litigation against the local agency" as described in Section
54956.9 (b),
the published reason for today's secrecy. Here is the Docket. It says "Conference with Legal Counsel - anticipated litigation - initiation of litigation, pursuant to California Government Code section 54956.9(b)". That's plain enough. But what "anticipated litigation" are they referring to? Whatever the reason for today's Closed Session, that was not it.

Further, if you read
54956.9 (b) (3) (A) thru (F), describing the only "existing facts and circumstances" that can apply. What such "facts and circumstances" exist in connection with the SEC enforcement? None that I can discern. So what's going on?

Mike Aguirre told the meeting that he needed to preserve the confidentiality of his discussions with the SEC, otherwise they would clam up and not talk to him. He said the remaining discussions involve a very narrow area and will only be for a limited time. What discussions is he talking about?

The discussions with the SEC are over. They have been over for a long time. They started in 2004 and were over at the very latest on June 12, 2006.  The simple fact is that the publication of the SEC enforcement decree was held up by the City Council until the Kroll report was out. It is now being held so that Levitt can strong-arm the five SEC commissioners into overruling its LA staff and writing the decree Kroll promised. Isn't that what Kroll was paid $20 million for?

By delaying publication of this enforcement decree they are putting their personal interests before that of the City. The enforcement action against the City as an entity could have been over a long time ago. The SEC are treating their actions against the City and against individual Council members as separate actions. Both Aguirre and Hartigan confirmed that today. But the City Council is resisting it. They are clinging to the Levitt promise that he can keep them under the same enforcement decree as the City and thus not individually liable. That's what's going on.

Today's Closed Session was a barefaced breach of the law. The City didn't need it. The Councilors had nothing to discuss and nothing to decide. There is no existing or threatened SEC litigation. The Council is not party to any negotiations with the SEC. It never was. This is an enforcement action. All very simple.

Each of the five individual City Councilors is under an enforcement order for breach of the securities laws. They already know their fate. They have seen the general decree. They know the SEC will accuse them individually later on because the City as an entity decree says that certain individual officials are guilty of securities fraud.

Now they are spending public money trying to force the SEC into issuing one general citywide decree, with no individual liability. Hartigan should not even have been talking to them today. He represents the City not the City Council. As an expert on securities law, he was hired to advise Aguirre, not the City Council. They have their own private counsel for which the City is paying - and paying big.

It was easy to figure out what Sanders and the five "negligent" members of the City Council were up to today. It was a bit harder to figure out where Mike Aguirre stands on all this. I simply don't believe that stuff about the SEC ceasing to be open and frank with him if they fear everything they say may get into the public domain. They know he is a public official and they are used to dealing with public agencies. Mike is no different. And even if that were true it did not provide a legal basis for the Closed Session today. It certainly is not the one quoted on
the Docket.

It sounds to me like Mike is afraid to be branded an "obstructionist" if he resists Sanders. He is just being too nice. Toni Atkins for one is setting him up and will dump all over him. She will use today to demonstrate how she has always been the good little girl who always does what her City Attorney tells her.

Mike needs to turn this around and do it quickly. The best way is to seek the release of that decree and damn the torpedoes. Right now they are aimed at him.

Look what he would be "obstructing". He would be "obstructing" the appointment of an outside monitor who is to be put over our elected representatives for 3 years; he would be "obstructing" a misuse of public money that paid $20 million to Kroll & Co to exonerate elected officials and put all the blame on un-elected officials; he would be "obstructing" the creation of something that is looking more and more like a developer dictatorship than a citizen mayorship; in short he would be "obstructing" the greedy manipulation of this City's finances by faithful servants of a downtown business cartel that was first nurtured under Jack McRory and Susan Golding. Both Jerry Sanders and Fred Sainz were recruited by that constituency and are still faithful to it today. Look around the present "in" crowd, it is the Jack and Susan show all over again.

It sounds to me that Mike Aguirre should be proud to wear such an "Obstructionist" label. We should all go out and buy "Obstructionist" badges and wear them proudly every day, all of us that is who genuinely care about what this greedy bunch of insiders is doing to our beloved city. Go ahead Mike, "obstruct" the hell out of them.



The Brown Act is winning - 09/14/06


by Pat Flannery

Did the political genius, presumably Scott Peters, who came up with the brilliant idea of staging a phony Closed Session today, in a futile attempt to cover up the Brown Act breach described in my blogs below, not anticipate that Bob Kittle (quite rightly) would jump all over them?

Kittle alone knew that "The 21-page enforcement action stipulates that city officials violated the anti-fraud provisions of federal securities laws through misleading bond disclosures. What's more, the draft order declares the violations were intentional and designed to deceive, manipulate or defraud".

Wow! No wonder they didn't want us to see it until they cleaned it up. No wonder they wanted to portray SEC negotiations as "ongoing".

Now what? They will be unable to resist the pressure to release this "tentative draft consent decree" as they have tried to portray it. Bob Kittle and I are on the same page on this one, although probably for different reasons. I doubt Kittle has ever even read the California Brown Act, which is my political compass. I want open government while Kittle merely wants to sufficiently embarrass the City Council that they will be forced to accept the 3 year (Wall Street) monitor he wants put in place.

It is interesting that he used the words "under wraps". Is he now challenging Sanders'  Mayoral Decree to keep all SEC documents "under wraps"? That would be a huge turnabout for Kittle and a huge setback to Sanders' credibility. Kittle went from
"Unfortunately, City Council members have been shown the draft SEC order" only last Friday to "San Diegans have every right to know what is in the draft decree" today. He has undoubtedly shifted his ground, away from Sanders.

So, "Bowtie" Bob has belatedly decreed that it is not only O.K. for the City Council to see this SEC decree (only he was allowed to see it last week), but it is O.K. for the rest of us, the great unwashed of San Diego, to see it as well. The winds of change are definitely shifting - towards disclosure. We may win this thing yet. Now it is on to full disclosure of the cost of bonds already issued. I have been making some progress on that battle but it is like pulling teeth. If they cannot account for the cost of the bonds they have already issued like the $152 million "Banc" of America bond and the $39 million cost of the ballpark bond, how can we trust them with new bonds?


The Brown Act vs. Mayoral Decree - 09/13/06


by Pat Flannery

As promised I tried to obtain a copy of the special Closed Session Report for the "secret closed meeting"  at which Bob Kittle of the U-T says a 21 page draft SEC order was read and discussed by the entire City Council.

First let's dispel any suggestions that the document does not exist. Whether it is the final work product of the Los Angeles SEC staff or not is not the issue, its existence and its having been read and discussed by the City Council is what is at issue.

Apart from the numerous references made to this 21 page SEC document by Bob Kittle , we have Scott Peters' word for it too. He is the Council President and he should know. Here is what Jennifer Vigil reported on Sunday, September 10, 2006:

"Peters followed Sanders' lead last week regarding the Securities and Exchange Commission's San Diego investigation. At a Wednesday news conference, he acknowledged that he had seen a draft of the agency's consent decree for San Diego, though he declined to offer details.

Sanders, at Peters' side, refused to confirm the existence of the document, saying that the city had agreed to keep the SEC negotiations under wraps."

We all know why Sanders "
agreed to keep the SEC negotiations under wraps", he wants to secure a much tougher decree for his Wall Street handlers. Will Peters, now aware of the significance of his hasty confirmation, try to backtrack and repudiate his hastiness? Did Jennifer Vigil get it wrong? I doubt it. There can be no doubt that the document exists. No matter how hard Peters may now try to "reinterpret" his remarks to the U-T, Bob Kittle is unlikely to say that he made the whole thing up.

This is no casual document or "progress report" on "ongoing settlement negotiations" as they will now try to claim. This is the final work product of the Los Angeles SEC staff, brought back by Mike Aguirre. It is in "draft" form only because the SEC commissioners have the final say. That final say is what Bob Kittle is trying to influence. He knows he has lost the battle with the LA staff. The negotiations are over, it is now up to the Commissioners to approve the order "drafted" by the staff.

So was there an official Closed Session at which it was discussed? No. The last and only time SEC case LA-2842 was discussed by the City Council was in a Closed Session on June 12, 2006 (note the Docket was "revised". I wonder when and by whom). That is hardly the meeting Kittle and Peters are referring to.

Here is what a Closed Session Report looks like. It is meant to identify the basis for a Brown Act exemption from the normal open meeting rules, item by item. Going through that process is the only way a document can be legally withheld from the public. Sanders is now trying to impose a new method: Mayoral Decree. The fact that a Mayor wants to keep something "under wraps" is not a sufficient legal reason for withholding a document from the public.

But just in case it had been discussed at a regularly scheduled Closed Session, I had the City Clerk's Office confirm that the last two official Closed Sessions (before the Special Public Meeting on September 7, 2006) were on August 7, 2006 and July 31, 2006. If the draft SEC order was discussed at any properly noticed Closed Session it could only have been at one of those, unless the order was in existence prior to July 31, 2006, which would raise a whole new set of questions.

Here are the Agenda for both of those Closed Sessions. Not surprisingly, no mention of an SEC item anywhere. It is very unlikely that it was drafted before the Kroll report was released on August 8, 2006.

Therefore this important document was not only not shared with the public, it was handled in a totally illegal manner. It should have been docketed for a Closed Session so that a basis for a Brown Act exclusion could be established - if there is one.

Instead, the entire City Council illegally cooperated with Mayor Sanders in keeping it "under wraps". The Mayor is also subject to the Brown Act. But he thinks he is still top cop. We saw what he did with his power at San Ysidro. He let people die so he could be the one before the cameras. This is the same Jerry Sanders.

Apart from the Brown Act infringement, the importance to the public of this particular SEC document is that it apparently does not call for the 3 year monitor Mayor Sanders is so pointedly insisting upon. That is why they all agreed to keep it "under wraps" until they could stage their phony "historic" Special Public Meeting agreeing to a monitor - "in principle".

The City spent $20 million to get a favorable SEC report and now it is so favorable that Sanders and the City Council want to keep it  "under wraps" until their monitor is appointed who will then keep everything "under wraps". That is where we are going here. The Brown Act will be in tatters.

No elected body would do such a thing unless it sought cover for anticipated wrongdoing. They know that the monitor's job is to run interference for the Wall Street whiz kids. Whenever the public will ask questions from now on they will simply be referred to the monitor who will have everything "wrapped" as tight as the closing statements for the ballpark bond issue are "wrapped" right now. Impenetrable.

All the indications are that there will be massive bond borrowing over the next 3 years, much of it contrived and unnecessary, merely for the sake of creating lucrative bonds for Wall Street. See today's U-T editorial on the $1 billion sewer bond Madaffer wants.

Instead of preparing themselves for asking the kind of searching questions elected representatives are paid to ask, this City Council is washing its hands of the whole bond thing. They are throwing the City on the mercy of Wall Street by accepting a monitor. The hens are opening the door to the fox. That is the real price of their exoneration by Kroll. The $20 million was just petty cash expenses for limousines etc.

What can the public do? We must make them obey the Brown Act. We should start by demanding an answer to "where and when since June 12, 2006 did the City Council meet and discuss that draft SEC order?". It is a good opportunity to remind them that the Brown Act is there to prevent exactly this kind of thing from happening. Only in clearly defined circumstances (see the sample Closed Session Report above) can our public representatives know more than we do, or keep information from us.

On what legal basis did this City Council withhold this vital document from the public until after their staged public debate in City Chambers? The public were lied to, there can be no doubt about that. The Council bent to what amounted to a Mayoral Decree.

The cover-up has already begun. They want to make it appear right by staging a post-dated Closed Session on Thursday September 14, 2006, with all the notices in order. They are citing Brown Act section 54956.9 (b) as their justification for secrecy. This uses "significant exposure to litigation" as justification rather than the more usual "existing litigation" under 54956.9 (a). We can ask them to explain the basis for their belief that the draft decree, tentative or otherwise, poses a significant exposure to litigation, but more pointedly, how keeping it "under wraps" will reduce that exposure.

The real reason for the meeting of course is not to discuss what they already know, it is to characterize the now controversial 21 page SEC draft decree as "tentative" rather than the "final" draft consent decree. It was referred to as a "tentative draft consent decree" in the June 12, 2006 when the investigation was still ongoing. They have copied everything exactly from that June meeting and will now "stage" another meeting to make it look like nothing has changed in the meantime, that the investigation is still ongoing. They may win the argument but they will lose the trust.

They had absolutely no intention of holding another Closed Session to discuss the SEC investigation, because they knew it was over. Yet Mike Aguirre told the U-T today: "
The meeting was called, he said, not because a settlement is imminent, but because attorney John Hartigan, the city's private SEC counsel, could not attend regularly scheduled sessions this week or next." Yeah Mike, we believe you.

And by the way Jennifer (Vigil)
this is not "the first time that the city has officially acknowledged the existence of such a document". I don't blame you for not checking back through all the Closed Sessions for this entire year, as I did. I had smelt a rat. They may try to get you to correct yourself so as to emphasize the exact point they wish to make. They lifted the entire Agenda for this Thursday from the June 12, 2006 Closed Session so as to pretend that all this is routine and ongoing.

But this will only compound their lie. We know they all want to use it as a pawn in their political games. But it's our draft decree too. The best way to prevent this document  being used by anybody for their personal agenda, Kittle for example, is to publish it right away. Aguirre can do that. Unless he too is playing political games with it.

I for one am not going to be put off on this any more than I am going to be put off until I obtain the closing statement of the $152 million "Banc" of America sewer bond and the $169 million Merrill Lynch ballpark bond with its $39 million closing cost. If they cannot give us the costs of past bonds how can we trust them to issue new ones? If they play games with an important SEC order like this one, how can we trust them with anything?

Is there any personal repercussions when an elected representative ignores the Brown Act? Is it as Jim Madaffer said: "let them sue us"? They can hire the best lawyers to defend their wrongdoing and we get to pay the bill? Is there any individual responsibility?

Every single City Council Member who read and discussed that draft SEC order before September 7, 2006, knowing that it had not been certified by the City Attorney as a qualified Closed Session item, breached the Brown Act. It is now up to our City Attorney to tell us what remedies we may have. Right now our only protection, the California Brown Act, is being superseded by Mayoral Decree.


So much for the Brown Act. - 09/09/06


by Pat Flannery

We would never have known about a "a secret closed meeting" held before the "historic" Special Public Meeting of the City Council last Wednesday if Bob Kittle had not blurted it out in his Friday U-T editorial that was the subject of my blog yesterday.

It had to have been before the public meeting because Kittle was all worked up on Tuesday that the subject of that closed session, a draft SEC order, might be too mild and jeopardize a favorable Council vote on the 121 point Kroll/Sanders remediation package.

I appeared before the City Council on Wednesday as a public speaker in opposition to the City Council
accepting and adopting "in principle” all the 121 Kroll/Sanders’ “remedial” recommendations. I was particularly concerned about the appointment of an outside monitor for 3 years and argued that neither the Mayor nor the City Council had the authority to appoint one.

I warned that ignoring the City Charter in such a blatant fashion could lead to the breakup of the City of San Diego. If our City Charter means nothing to this Mayor and City Council, large sections of the City could start looking at the La Mesa and Coronado option. Levitt would never have come to a La Mesa.

When I stood there before that City Council, doing my civic duty as I saw it, I only knew that Bob Kittle had seen the draft SEC order. I had only surmised (correctly as it turned out) that it must not have contained an order for an outside monitor for 3 years as Kittle is campaigning for.

What I did not know, and could never have guessed, was that the entire City Council had also seen that draft SEC order. They had held a special closed session before inviting us, the naive public, to their "
Special Public Meeting".

Now that really bothers me. I feel used and abused. We were invited to put on the appearance of a public debate on something that had already been decided behind closed doors.
They know that the City must issue billions of dollars in bonds in the very near future. They know that the profits from these bonds will be greater than from all the inside real estate deals in this city's history. The NTC giveaway will be put in the shade.

If I had known for sure, not just guessed it, that the only one asking for a 3 year monitor was Mayor Sanders, if I had known that the entire City Council sitting there before me, including presumably the City Attorney, had already met and decided to appoint this monitor to cover their involvement in the upcoming massive borrowing spree, I would have had some tough questions. But of course that is why we were kept in the dark.

Atkins, whose domestic partner is a senior VP at the Bank of America, would have told me that she knows nothing about high finance, that she is just a social worker. Sanders, who is a director of a local bank, would have told me that he is just a cop, elected Mayor because he is a nice guy, and so on with all the others.

I will request that the City Attorney provide the public with the exact legal basis that justified that particular closed session under the California Brown Act. From the various Aguirre presentations we are now familiar with the form the City Attorney must fill out in order to authorize each closed session. I will publish it here when I receive it.

In the meantime if any Councilmember has a convincing reason why that draft SEC order could be legally viewed by the City Council in closed session but withheld from the public in open session, I will be interested to hear it and will publish it here.

Don't hold your breath.


Guilt and Billions in the balance- 09/08/06


by Pat Flannery

Anybody who listened to Bob Kittle this morning on KPBS's "Editors Round Table", can be in no doubt that this guy is "more than a journalist", that he is actively pursuing an agenda and using the full power of his position as editor of the the U-T's editorial board, to push that agenda. All I have been doing is trying to discern what that agenda is.

Look at his
U-T editorial today. It confirms much of what I have alleged in recent blogs, that he is an agent of a Levitt-led Wall Street assault on our financial independence.

Consider this quote from that editorial: "Unfortunately, City Council members have been shown the draft SEC order during a secret closed meeting – another manifestation of the thriving culture of secrecy at City Hall. Not surprisingly, some council members now are balking at Sanders' proposed three-year monitor, arguing that San Diego should do only the bare minimum required by the SEC. The clear solution here is for SEC enforcement chief Thomsen to strengthen the draft order and impose a three-year monitor, period. End of discussion."

He is enraged that somebody from the SEC has secretly shared with the City Council the same draft SEC order that was leaked to him. He was to be the only one to know that the SEC was asking for less than he and his Wall Street friends want to "impose" - his word, not mine. The City Council was not supposed to know until after they were cowed into a blanket approval of the Kroll/Sanders 121 point "remediation".

When Gloria Penner asked Kittle whether he had seen the draft SEC order, he confirmed that he had. He told her he was the only "journalist" to see it - that he had a "confidential source". When Gloria asked, being a journalist herself, how that could be, he seemed genuinely surprised by her question. How could she not understand that he was a very special person, above all that? Perhaps he is.

Between Kittle's shrill advocacy of putting a Wall Street "Monitor" in charge of the City  Council and Sanders' pointed statement that he will ask for a "Monitor" whether the SEC require it or not, can there be any doubt that we have been sold down the river?

The U-T revelation that the City Council had seen the draft SEC decree is devastating.

It explains why Sanders told the Council that he will ask for a Monitor whether the SEC require it or not. This is the guy we elected to be the ultimate monitor. It makes the six Council Members who voted for Sanders' package even more culpable. They voted for the Monitor even though they knew the SEC will not require it! That is unforgivable.

Billions of juicy City Bonds are on the table. Millions of fat brokerage fees are up for grabs.  A high stakes money game is being played right in front of San Diegans' eyes, but most of them think it is just another sunny day in America's Finest City.

But real "remediation" may be about to come from an unexpected source: the revolt of the un-elected.

One of those scapegoat un-elected former officials has written to Kroll threatened to sue for defamation. Kroll's attorney has countered with
a letter to Sanders threatening to charge the City for Kroll's defense unless Sanders can get Aguirre off their backs. Sanders dutifully wrote to Aguirre attempting to do just that.

If Aguirre plays his cards right he can use this development to shift the spotlight of guilt back to where it belongs, on the individual elected members of the City Government. As I predicted, the "un-elected" fall guys are not going to go to the execution chamber quietly. That was always the weakness in the clever Kroll/City Council plan.

And Kroll is quite right. If the City Council was partners in the crime, they should be partners in the defense. Somebody on
Kroll's list of "guilty" officials is still a force.

Kinda gives a whole new perspective to Jim Madaffer's "let them sue us". If they'll do it with you, they'll do it to you Jim. Toni Atkins probably spoke for the rest of the "guilty four" when she defiantly proclaimed on Wednesday that she would stick it out. Let's see how long she  can last when the full fury of the wronged fall guys is unleashed upon her.

What a story they will have to tell when they finally take the stand in their defense. They will tell how they were only doing what they were told to do by their greedy elected bosses like Atkins. We know that
Terri Webster for instance was looking out for the City when her boss Mayor Murphy was looking out for John Moores. It aint over yet folks.


Remediation is big business - 09/06/06


by Pat Flannery

Well, as expected, the "trapped-with-their-pants-down" City Council duly voted to “accept and adopt in principle all the 121 Kroll/Sanders’ “remedial” recommendations today. Buried deep within those 121 "remedies" is the only thing they really care about, the appointment of a Wall Street overseer.

The position will be euphemistically called the "Independent Monitor" - more like the independent terminator if you ask me. The job will be to oversee the rape of our city's finances by Wall Street. To me, it was highly significant that Sanders departed from his published written statement to pointedly say to the City Council that he would seek a "Monitor" even if the SEC does not order one. That confirmed everything I believe. Why would an elected Mayor want somebody to "monitor" him? He must think we are stupid.

And so, six elected Council Members (Donna Frye voted “No” bless her) dutifully voted to hand over control of our City’s finances to greedy outsiders. But only "in principle"!

The road is now open for more of those $169 million, 7.66%, tax-free, ballpark-style bonds with their $39 million “brokerage” fees to Wall Street houses like Merrill Lynch.

Only now the bond amounts will be in multiples of $500 million or higher. Sanders and his team intend to go on an orgy of borrowing, on whatever excuse they can come up with, to satisfy their Wall Street handlers' appetite for our juicy city bonds. First it was pension obligation bonds now it is "deferred maintenance" according to
Jay Goldstone in "The Voice of San Diego", which is fast becoming "The Voice of Jerry Sanders' Office".

Jerry Sanders has been trying to get into the financial services business for years. His involvement in Virtual Capital LLC with Tom Stickle led to their launching together the
Coronado First Bank last October. Here is a link to its web site describing these two members of its board - Tom and Jerry. Jerry chose his partner well. Tom knows finance.

Tom Stickle funded my first loan as a mortgage broker back in the early '80's right after he launched his Point Loma Savings & Loan at the corner of Rosecrans and Midway, which later became the Bank of Southern California, and right after I got my California real estate broker's license in 1982. Tom is a bright guy.

As for the Council vote today, it reminded me of how a city can be guilty of securities fraud but not any one individual. The Council approved all 121 of the Kroll/Sanders recommendations but did not approve any one of them individually. Neat trick. It shows a fundamental lack of morality in our city's Government.

So now what? Well for me, I hope Donna Frye meant what she said today. I think she did. She said she would now ask more questions, not less. I certainly will, except I do not have the authority Donna has. But we do have one honest City Councilor who will not sell her vote for political expediency. She made a very passionate speech today, which for me, was the highlight of an otherwise depressing day's proceedings. I even thought Aguirre pulled his punches a bit so as not to be labeled an obstructionist. Is Kittle a nose ahead in the obstructionist vs. pioneer propaganda battle? I hope not.

What we need now is for Donna to use her honesty and position on the City Council to scrutinize everything these rascals do. That’s why we elected her. She should start by demanding the financial summaries of all city bonds issued in the last five years. We can still deny these carpetbaggers their booty. We can send them a clear message that the public will scrutinize every bond, every privately placed loan, every expense. But we must start with the questionable bonds already issued. That is where the real remediation is needed. That is where the next rape will take place if we are not vigilant.

We must prevent their Levitt-chosen, Mayor-appointed "Monitor", from facilitating the next financial giveaway. Make no mistake, that will be his job and he will be carefully chosen to perform it. This is the battle that now lies ahead of us if we are to save our City from these outside locusts. And we must keep their local lackeys from moving into more multimillion-dollar homes in La Jolla at our expense. I’m sure Arthur Levitt has promised some nice big Wall Street mortgages for his faithful "pioneer" team players.

So come on Donna, we’re ready. Let’s start start with those bond closing statements. Let’s get the facts about that $152 million “Banc” of America private loan last October. Let’s see if there were any $39 million style brokerage fees involved. And if they won't give us the information we will kick up such a stink that they will wish they had.


Levitt and Kittle want a Wall Street Monitor real bad.  - 09/05/06


by Pat Flannery

Why do you suppose the editorial board of the U-T today called on the SEC "to stiffen the order and thereby instill accountability in San Diego and elsewhere"? And lauded Kroll: "in sharp contrast, the much tougher Kroll investigation named 35 San Diego officials who either acted with wrongful intent, breached their fiduciary responsibilities or were negligent in fulfilling their duties"?

Answer: the former SEC chairman, Arthur Levitt, was supposedly brought in to save us from the SEC, but it is actually the other way around. The SEC staff in Los Angeles are trying to save us from Arthur Levitt.

And why do you suppose the U-T thinks the Los Angeles SEC staff are not tough enough on San Diego?

Levitt came to San Diego to implement a Wall Street scheme to infiltrate this city's  finances. This scheme, once successful in San Diego, will be repeated all across the country, using Sarbanes-Oxley as cover.

How did Kittle get hold of "the 21-page draft decree currently in the hands of the SEC staff as it wraps up a 2 ½-year probe"?

Levitt has a spy on the Los Angeles SEC team that is negotiating with Aguirre. That spy leaked the draft SEC decree to Kittle, who goes over the heads of the LA staff and writes an editorial designed to pressure the five SEC commissioners. Kittle urges the five commissioners to bring the final SEC decree into line with the "much tougher" Kroll report that calls for a Wall Street monitor. It is all about getting that monitor.

If the draft SEC decree called for a monitor, Kittle's editorial would have been very different today. He would have shouted it from the rooftops of Mission Valley. It would have sealed his demand that the City Council has no choice but to agree to a monitor when they meet tomorrow. But this "faulty" draft SEC decree is now a huge problem for Levitt and Kittle. Something has gone terribly wrong with their plan.

Sanders' argument for appointing a Wall Street monitor right away is
"that the SEC will make it a requirement in their order". But, through Levitt and Kittle, he knows there is no call for a monitor in the draft SEC decree . Therefore, to serve his real masters, he must get the City Council to agree to a monitor tomorrow, before the SEC decree is released - i.e. for the exact opposite reason he is telling the Council.

Kittle has been very aggressive in urging the City Council to stop Aguirre from representing the City in negotiations with the SEC. He has known for some time, through Levitt's spy, that Aguirre is being very successful with the SEC, much too successful for Levitt's liking. No wonder he hates Aguirre.

According to his
Blog on August 22, Aguirre and the outside attorney John Hartigan, from the Los Angeles branch of the law firm Morgan Lewis & Bockius LLP, have been working very well together, despite Kittle's efforts to derail them. Levitt and Kittle know that Aguirre could wreck their whole plan if he can delay the appointment of a monitor until after the final SEC decree is released - sans a monitor.

Is any of this Trojan service to Levitt and Wall Street showing up on Kittle's personal balance sheet? He has been indispensable to Levitt.  Maybe Kittle is just a crusading journalist dedicated to the principle of free enterprise and fair play, without any expectation of personal reward. Yeah, that must be it.


Has Jerry Sanders been "got at" too? - 08/31/06


by Pat Flannery

How could he have gone from this to blithering ditto-head for Levitt's 121 point Plan in a matter of weeks? He changed as quickly as you could say "San Ysidro".

On July 10, 2006 he said: "The only power that I have over our current situation is the truth to tell the whole unvarnished truth. So, I will use that power as freely as I must in the hopes that Kroll will understand that their delay is affecting the lives -- and the livelihoods of millions of people. I don t think it s an exaggeration at this point to say that they are holding our City hostage."

I agree Jerry. They still are. So how about telling us the "whole unvarnished truth" about your part in the 1984 San Ysidro massacre so we can all be sure that nobody is blackmailing you?

How about answering some questions I and others raised last year when you were running for Mayor?

Some questions for Jerry Sanders - 07/05/05;

Jerry Sanders and the McDonalds massacre - 07/14/05;
Viva La Prensa - 08/20/05.

How could you go from "It is my deeply held opinion that the arrangement the City entered into with Kroll was ill conceived and overly general. It in essence allowed for the current situation to occur. The imposition of Sarbanes Oxley on a municipal entity like ours is without parallel and needs to be rethought so that no other government entity has to suffer to the extent that our city has"  to abject servitude in such a short time? Only those who have been "got at" change in such dramatic fashion.

On July 10th you said: "There is no reason that I can think of as to why a private corporation with a profit motive should be allowed to serve as an audit committee -- or worse, as an investigations arm with no controls - - for a government entity with limited resources." Now you are treating the writings of Levitt and Kroll as the very Bible itself.

Did somebody wave San Ysidro in your face? Does somebody know something that could disgrace you?

Why did you expunge this sentence when you read your July 10th statement to the cameras in the City Chamber "I don't want them issuing a press release or meeting with the Editorial Board of the Union Tribune"? Did you receive a phone call from Bob Kittle? Has he something over you?

The people of this city want to know if their Mayor is his own man - or has been "got at". It is bad enough having a morally compromised City Council, but a morally compromised Mayor too! Have we lost control of our City to Wall Street carpetbaggers? Watch the ditto-heads on September 6th and decide for yourself.


Aguirre's Tax Remediation Plan - 08/30/06


by Pat Flannery

The only item I have any difficulty with in Mike Aguirre's new Plan is item number 7: "The San Diego City Council will prepare a revenue enhancement plan for submission to the electorate at the next feasible election that will raise sufficient funds to pay for all legal pension benefits." I think that is a big mistake.

I suspect he sold Donna Frye on his "revenue enhancement" plan last year and in my opinion her adoption of it cost her the mayoral election. I am a realtor and I fill out dozens of "Buyer's Estimates" every week for young couples eager to buy their first home. When I tell them that they must pay $520 per month on a $500,000 house, they can hardly believe it. And Mike wants to hit them up for more? Forget it Mike.

I am with him 100% in rolling back the illegal pension benefits, particularly the retroactive ones, and in  making City Councilors individually accountable, in court if necessary, but I am not with him on a tax increase, no matter what he calls it.

I just don't buy into this BS that San Diego is an under taxed city. If real estate tax is our biggest revenue source and we have the most expensive real estate in the nation, how can we be under taxed?

Where did all the "revenue enhancement" from the recent real estate boom go? Was that not the biggest "revenue enhancement" in this city's history? What happened to it all? "Diverted", that's what! The biggest rip-off in this city is not the pension fund, it is the so-called "tax increment diversion".  Massive real estate tax revenue is "diverted" into the coffers of public-private partnerships known as redevelopment projects.

We tax payers hardly saw a penney benefit from the recent property boom. All diverted to fat-cat redevelopment projects run by un-elected Mayors like Nancy Graham of CCDC.

Then where are we going to get the "revenue enhancements" we need to pay for the under funded legal pension benefits, Mike might ask?

Simple Mike. Start billing the "redevelopment projects" for their fair share of city services. Including pension benefits! If the projects want police and fire protection let them pay the City for it. Let them pay the pension benefits of the cops and firemen that service their "public-private partnership" fiefdoms.

There is an old joke in real estate about what makes the perfect real estate investment partnership: a person with money and a person with experience. Result: the person with the experience ends up with the money and the person with the money ends up with the experience.

Well I think we the taxpayers may finally want to start putting our hard-won "experience" to use. We sure have plenty of it by now. Let's start by showing our slippery "partners" in these "public-private" real estate deals called redevelopment projects, that we are not as dumb as we were when we first fell for their BS.

Sorry Mike, you are going in the wrong direction on that one. The tax-payer is tapped out. Too bad you had to put in Item 7 when otherwise your Plan is the perfect counter to the Levitt/Carlyle power grab.


The Kroll/Carlyle Plan - 08/30/06


by Pat Flannery

To me it is as plain as day. Levitt represents a Wall Street power grab right across the country, one city at a time, beginning with San Diego. Aided and abetted by the U-T we are to be their poster child. I can see the New York headlines now - "How Arthur Levitt saved San Diego from itself". Wall Street to the rescue.

Just think about it. Where does Wall Street get most of its investment dollars? Pension funds. Who controls pension funds? Local governments. Wall Street needs to control local governments. It not only makes sense from their end, it is an imperative. So who do they turn to? Arthur Levitt the ultimate insider/fixer.

Why else would such an eminent figure be grubbing around in San Diego's financial trash can? Even at $900 per hour. He doesn't need the money. This 75 year old man lives in a Manhattan penthouse!

Read about the Carlyle Group, the infamous Carlyle Group, to which Levitt is a senior advisor on "strategic business matters". Here's a little Wiki on Carlyle. This is what SourceWatch has to say about them. One article in particular is a must read.

How does Levitt operate?

An old police trick is to "turn" petty criminals caught with their pants down into compliant informers. Or as Nixon used to say "when you've got them by the balls their hearts and minds soon follow". So Levitt and his Wall Street gang looked for a city council caught with its proverbial pants down, their "hearts and minds" dangling in the wind waiting to be grabbed. At least four San Diego City Councilors have their pants down around their ankles - ok "panties" in the case of Toni Atkins but down nevertheless.

 So, when you next look upon that venerable bench called the City Council, think of the state of their underwear and watch them say "Yes Boss" to Arthur Levitt who has "saved them from themselves".



Without Aguirre we would still be in the dark - 08/27/06


 by Pat Flannery

We must be winning! Why else would the U-T be so enraged? And Wow! Is it enraged! Instead of responding in kind we should ask what it is we are doing right - so we can do more of it!

The number one thing we did right, so far, was to elect Aguirre. If that one victory can drive them this crazy, imagine what we could achieve if we elected more honest people to bust up their old-boy network.

Blog on January 15, 2005: " Mike started with the City Auditor's office last Tuesday and surprised the acting City Auditor, Terri Webster, who also happens to be on the City Pension Board, having a cozy chat, in her City office, with Jerry Coughlan a lawyer from Seltzer Caplan McMahon Vitek, the San Diego law firm who represent the Pension Board. Whatever could they have been chatting about?"

I continued: "Mike gives Coughlan his marching orders right out of the City offices and seizes several boxes stuffed with the very documents that were the subject of Ms. Webster's tete-a-tete with Mr. Coughlan and being sought by the Feds."

Imagine what would happen if we elected a City Auditor with the reforming zeal of an Aguirre. Imagine the damage he or she could do to their network. They would attack him or her even more ferociously than they are now attacking Aguirre because it was in the financial area that the real dirty deeds were done.

Sanders appointed an "outside" CFO, Jay Goldstone, to sideline the City Auditor. Why?

Jay Goldstone's job is to keep at bay people like me who had the temerity to ask for the closing statements on the $152 million "Banc" of America bond issue. I wanted to know if there were any "brokerage " fees paid to anybody. I then had the insolence as a citizen to ask for a final statement on the $169 million ballpark bond! I wanted to know who received the $39 million for "selling" a 7.66% tax free bond to Merrill Lynch!

Will I ever get the closing statements on those bond transactions? Not until we elect somebody like Mike Aguirre to go  right into Jay Goldstone's office and seize them.

Casey Gwinn's protégé, Leslie Devaney, had become City Attorney instead of Mike would we ever have learned about the "Vortmann Letter" (see my Blog below), the "EEEK" memo or any other smoking gun document discovered by Mike in his "surprise" visit to the acting City Auditor's office in January 2005?

No wonder the old boy network is attacking him with such fury.

And now we are going to get $45 million worth of more outsiders like Jay Goldstones? Dressed up as "remediation"? At what stage are the citizens going to stand up and yell:

"I'm mad as hell and I'm not going to take it any more"!

If they try to ram this mad "remediation" package through, this quiet layback sea town may go from "Enron-by-the-sea" to "Beirut-by-the-sea". There is a deep sense of wrong here and it is not going to be "remediated" by bribing more fast talking outsiders. This nonsense has to stop.



We need an elected City Auditor, not another appointee - 08/26/06


 by Pat Flannery

As part of the "vigorous public debate" the city needs on its remediation plan, I fully support the idea of an elected auditor, something City Hall watchdog Mel Shapiro has been championing for a long time, something Donna Frye supported in her mayoral campaign and now something Mike Aguirre is calling for.

Mike makes a good point on this in his
letter to the U-T today: "when the city has an independent auditor, it will not need an audit committee or an outside monitor as recommended in the report". There's that word again "outside". Kroll and the U-T want to devolve everything to outside appointees. And who gets to appoint them? Under Sanders, the downtown Chamber of Commerce folk - aka the Republican Party.

The present City Auditor has disappeared without trace, swamped by Sanders' $194,500 appointee, the ubiquitous "outsider", Jay Goldstone.


The Bribe is working! - 08/25/06


by Pat Flannery

In his Blog today Mike Aguirre urged us to read Beth Barber's Op-Ed in the U-T. Well I did. I hope he didn't expect us to agree with it. I certainly didn't.

Ms. Barber has fallen hook line and sinker for Kroll's purpose in writing their report: blame the un-elected officials and exonerate the elected ones. At least for her, the $20 million bribe has done its job perfectly.

Let's hope the civilian population is not so gullible. What she didn't seem to notice, or didn't want to notice, is that the Kroll interviewers led each of the interviewees with loaded questions and used  "exhibits" designed to achieve a purpose. The process was flawed! That's why we have defense attorneys in courts of law to shout "Objection!" when a prosecutor leads a witness. All these interviews were conducted without that safeguard. It was a witch-hunt for unelected officials, to exonerate the elected ones.


The real Vortmann "Bombshell" - 08/24/06


by Pat Flannery

The now infamous Vortmann Memo dated April 29, 2002, mysteriously leaked to CityBeat on February 2, 2005 (they will not reveal by whom) may have been a remarkably successful rear-covering operation, conceived and orchestrated by Dick Murphy and Dick Vortmann.

This is the Vortmann
letter we should have been concentrating on all along. Vortmann wrote it to Fred Pierce, Chairman of the Pension Board, on February 18, 2002.

The importance of this letter is that it begs the question: how could Dick Vortmann be signing off on the
Blue Ribbon Report, telling us that the pension system was funded at 97% (page 22 of the report), while at the same time be writing to the
pension board Chairman Fred Pierce, making it clear that he knew it was in fact funded at 85.6% or less (page 2 of his letter)? That is the real "bombshell".

blogged about it back on January 18, 2005, referencing a report in the U-T that same day by Phil LaVelle. Make sure you read LaVelle's piece. It has a good timeline of the surrounding events. Timing is critical to an understanding of who knew what and when.

LaVelle's report was the first we knew about this key letter from Dick Vortmann to Fred Pierce: "The document was released by City Attorney Michael Aguirre, who said he discovered it yesterday among the 15 boxes of records his office seized last week from acting City Auditor Terri Webster".

The Vortmann Memo was written
on April 29, 2002, two weeks after the Blue Ribbon Committee report was formally presented to the City Council on April 15, 2002, while the Vortmann/Pierce letter was written February 18, 2002, two months before the release of the Blue Ribbon Report.

Somebody leaked the Memo (not the letter) to CityBeat. But not to Aguirre! That in itself is strange.

CityBeat reported on February 2, 2005: "The memo was unearthed as a result of a CityBeat investigation. City Attorney Mike Aguirre didn’t know the memo existed until CityBeat showed it to him this week."  Personally I suspect CityBeat was not doing an investigation before it received the memo, but it certainly was afterwards.

Matt Hall of the U-T did a
story on it the following day, February 3, 2005. This is a link to the U-T copy of the Memo in PDF format. It seems to have been obtained from a source different to that of CityBeat. It is a much cleaner copy which suggests it was not obtained from the leaker, which was not a very clear copy. The copy used by Mike in his February 9, 2005 Second Interim Report seems to be a degraded copy of the one CityBeat obtained from the leaker and used for its February 2, 2005 news report.

So the Memo must not have been in any of the 15 boxes seized by Mike or the 50 others handed over to him - unless he has since found it. Mike should try to account for all 8 copies. It would be nice to compare each one with the copy faxed to CityBeat to identify the leaker. If only one has "gone missing", it would be a strong indicator of the leaker.
Why else would any of the 8 recipients want to hide their copy?

Did Murphy have it leaked in order to lead Aguirre away from the
much more significant February 18, 2002 Vortmann letter? At the very least the leaker knew that Aguirre would have had too many questions if they brought it directly to him. The U-T may have been little better, so they chose CityBeat.

The leaker could have been no friend of Mike's and must have known it could never be proven that Murphy had ever seen the Memo. They knew that Mike would follow this false steer and waste time trying to prove what they knew could never be proven. In other words the leaker knew it was safe to leak the Memo. They would also have known that Murphy wanted it hyped to cover the other more important letter. And CityBeat was grateful for a good story - on condition they kept the leaker secret. They still do.

If Murphy had known about the memo before it reached his office, he would have had no need to see it. Strange that he never expressed any anger at not having seen it. Far from punishing staff person Gibson for failing to pass on such an important document, he
promoted him to the lucrative Ballpark manger's job!

Maybe leaking a planted memo to the press was part of the "deal" Murphy did with Vortmann when he appointed him to the BRC. Vortmann may have insisted on a fig leaf.

Dennis Gibson and John Kern may well be telling the truth in their Kroll interviews. They may never have seen it. Although it was faxed to the Mayor's public fax number (the one still in use today), Murphy may have been expecting it and "took care" of it himself. Maybe he even filed it away with a note attached for John Kern. John claims that when he finally dug the "Vortmann Memo" out of his BRC file, it had a mysterious handwritten note attached to it :
"John, here is the letter you wanted." I wonder whose handwriting it was? You can bet John Kern has recognized it. Therefore you can also bet he knows exactly who and what he is dealing with here.

The famous "bombshell" memo may have been a plant all along, with Murphy's finger on its timer.

It is interesting that the only person
CityBeat exonerated was April Boling and Ms. Boling is now pointing the finger at John Kern: "
Do you feel any remorse for the advice you gave Murphy?". Was she the leaker? She is very close to Murphy and was his favorite "appointee". If I were Kern I would be watching my back.

So who is this guy Vortmann? Here's what Mike Aguirre has to say about him in his
Second Interim Report dated February 9, 2002: "Richard Vortmann, President of National Steel and Shipbuilding Company ("NASSCO"), was assigned to be the committee's lead person on the Unfunded Pension Liability issue. On 21 September 2001, the Mayor also appointed Mr. Vortmann to the City Employees' Retirement System Board of Administration."

Vortmann knew the pension issue well, yet he wrote to Pierce: "Am I confused here? If not, this is a rather big issue - i.e. the $105m can't be used twice. A funded ratio at 85.6% is getting close to the 82.3% trigger where the current "unconventional" actuarial method is violated. 89.9%-> 85.6% (if Reserve is a true reserve) -> 83.1% (if Corbett [sic] not contingent)". He was not confused. He was humoring the arrogant Pierce. Vortmann knew much more about pension systems than (developer) Pierce. Vortmann, as a large union employer, was no stranger to the world he now found himself in.

Vortmann was able to separate out the various possible underfunded scenarios. He noted that the unfunded ratio would be 83.1% if the Corbett Settlement was applied. That required a good deal of sophistication. Note also that he used the term "if not contingent". He knew this thing backwards.

He was Murphy's trusted appointee to both crucial bodies, the BRC and the SDCERS Board. According to Murphy's
Press Release when he appointed him to the SDCERS Board he was "a member of the Chamber of Commerce CEO Round Table and the Business and Economic Development Council of San Diego". In other words he was a trusted insider of the San Diego "business community" who had elected Murphy.

Now read his June 9, 2004  interview with Vinson & Elkins, recycled in the Kroll report. His Kroll interview, held on May 1, 2005, adds absolutely nothing to the V&E interview except that the Kroll interviewer clearly leads Vortmann into blaming the un-elected officials and exonerating the elected officials - a trend I have noticed in several of the other interviews. Were the City Council members aware of this deliberate slant when they were pressing those gravy buttons for Kroll? Of course they were.

V&E says he was appointed to the pension board "early 2002". In fact it was September 21, 2001. He was given an opportunity to correct the memorandum, but he didn't. Perhaps he wanted to be perceived as a "newbie". He had volunteered for the pension issue as his topic on the BRC "as he had been involved in pension issues in the private sector". His subsequent answers to V&E are replete with underfunding concerns. He likening the city "to someone with credit card debt who is not even paying off the interest". He and his elected boss, Murphy, were well aware of the pension fund's gross underfunding. Yet he gave Murphy exactly what John Moores wanted, a 97% funded ratio. Do the developers actually own this town?

One of the most damning parts of his V&E interview is where he said that "the pension portion of the report was largely left as he wrote it - it was not so much watered down" (presumably some other portions were?) and "he felt it made the points he believed were needed at the time". Indeed it did. He was remaining faithful to the job of work he was appointed to the BRC to perform.

Seen in this light the "Vortmann Memo" of April 29, 2002, deliberately and ostentatiously faxed to all the members of the Blue Ribbon Committee including Mayor Murphy's office, is the smartest piece of rear-covering in this whole sordid affair. Vortmann got to fax his "cya" memo but Murphy got to not receive it.

an unintended consequence, his V&E interview clearly shows the enormous influence of the unions on the pension board. They operated as a powerful special interest group. A Terri Webster e-mail dated September 4, 2001 said: "This is timely since the labor side of the Board was successful in June in pulling $100 million out of FY '00 so they have a pot to bargain with in the upcoming labor negotiations". The Pension Board had become the main battle ground for the City's labor negotiations. And everybody on the Pension Board knew it. In fact Vortmann said he resented it - but he had his duties for Murphy.

Ms. Webster was actually treating Vortmann as Mayor Murphy's representative on the Pension Board. Through him she was trying to warn Murphy, the employer, that the unions may be about to extract even more unfunded retiree benefits at the "upcoming labor negotiations". But Vortmann's boss wasn't listening. Murphy was in thrall to John Moores for his election and the ballpark bond had to go through.

We may yet see the "
revolt of the un-elected". Terri Webster and the other un-elected fall guys must be fuming at the way the "elected" officials have hung them out to dry. Rick Roeder must be kicking himself for having acquiesced in Manager's Proposal II. Bob Blum must be wishing he had chosen his words even more "carefully". Elected officials make dangerous friends, you never know when you are being used.


Isn't interfering with the duties of a City Attorney, actionable? - 08/22/06


by Pat Flannery

According to his Blog today Mike Aguirre and outside attorney John Hartigan, from the Los Angeles branch of the law firm Morgan Lewis & Bockius LLP, are working very well together despite the U-T's efforts to separate them.

The U-T urged the City Council to sideline Aguirre and have Hartigan represent the City in front of the SEC on his own. I am sure a majority of the City Council would have obliged if they had the power. But they don't. Aguirre is our Attorney, not theirs. I think we have established that at last.

Mike clearly stated that he is the lead attorney on the case and Hartigan seems to have no problem with that. Why should he? Of course the elected City Attorney should be the City's lead attorney. The U-T are getting very close to interfering with the duties of the City Attorney, which may be actionable.

Casey Gwinn threatened to sue them for a lot less - Don Bauder's criticism of the ballpark bonds.



The entire City Council is hiding under Donna Frye's skirts - 08/22/06


by Pat Flannery

CityBeat has now joined the U-T in siding with the elected city officials against the non-elected city officials. Both papers are now trying to hide the entire City Council under Donna Frye's skirts.

According to these publications it was the non-elected officials who badly deceived the elected officials. The
Maienschein excuse is working. Maybe it's because CityBeat and the U-T rely on the good graces of insiders like Scott Peters to fill their columns.

In CityBeat's editorial last week "
Assessing Donna", editor Dave Rolland indulged in the Shakespearean science of "damning with feint praise". He wrote: Frye voted against approving the bonds for the downtown ballpark—not because she knew the city was lying to investors, but because she didn’t believe the numbers added up with regard to the project’s cost."

Rolland's "assessment" is only slightly better than Jim Madaffer's "she got lucky" to Kroll - she voted "No" all the time so she had to be right once in a while - only Madaffer could come up with one that nasty.

Rolland implies that none of the elected officials could have known that the "the city was lying to investors". The fact is that Donna voted against the ballpark bond because, as Don Bauder put it in The Reader last week - it "smelled to high heaven"
. Bauder's relentless criticism of the ballpark bond at the time got him fired from the U-T. How could anybody not have known that "the city was lying to investors"?  Bauder was shouting it from the rooftops! Oh, they knew all right Mr. Rolland.

The fact is that Murphy held up the
Blue Ribbon Committee Report until after the ballpark bond was passed. The BRC was indeed what Donna Frye called it in her Kroll testimony - "a political stunt". That was why she voted against the ballpark bond. The Report, the bond, the whole thing, "smelled to high heaven".

Murphy got the report he wanted when he wanted it back in 2002, just as the City Council got the report it wanted in 2006. The "Reports For Sale" business was not invented by Arthur Levitt.


This letter is "Ground Zero" - 08/20/06


by Pat Flannery

This letter explains it all. Read it. When David McKinley wrote it he could never have imagined that you and I would be reading it on the Internet. Welcome to the blogosphere Mr. McKinley.

What he was really doing was hiring the Operating Engineers Union Local 501 as lobbyists. Unions are the most effective lobbyists at City Hall and they don't even have to register.

As Mr. McKinley says towards the end of his letter "when the two [business and unions] join together on an issue, it can make a strong statement that gets politicians' attention". In other words the combination of these two powerful special interests was more deadly than the sum of their individual arm twisting.

Jerry Butkiewicz, Secretary-Treasurer of the
San Diego-Imperial Counties Labor Council, invented this perfect greed machine several years earlier. "Butkiewicz has extended labor's reach through alliances with business, government and community groups as part of his broad program to improve the lot of the worker" wrote the San Diego Metropolitan Magazine in May '97. He went on to make himself a powerful force in not only the business community but the "go-to guy" in politics. Says Jerry: 'We're in a partnership. When you make money, we want to make money too." The McKinley letter reflects that.

Now read
Les Girard's reply to the Donna Frye letter linked below. It was Girard's job, on behalf of Casey Gwinn, on behalf of the union/business alliance to tell "surf chic" Donna Frye the legal rationale for keeping the COSS out of the public domain. Despite the fact that Donna refers to
California Government Code section 54956.9(b)(1) very specifically in the first paragraph of her letter, Girard replies: "although not specifically identified in your letter, I believe you are referring to the item noticed under Government Code section 54956.9(b)(1) significant exposure to litigation". Did he even read her letter?

Girard obviously knew, through Casey Gwinn, that the COSS was never going to be "brought forward for action" therefore he tells Frye that he was "merely advising on the litigation risk in the event an appropriate study is not brought forward for action" and quotes Government Code
54956.9 (b) 3 (a) to support him. Amazingly he makes it perfectly clear by saying: "We are advising on the liability should the City Council not proceed with a study to ensure that the waste water fees are proportionate".

The 54956.9 (b) 3 (a) that Girard relied upon, says
"Facts and circumstances that might result in litigation against the local agency but which the local agency believes are not yet known to a potential plaintiff or plaintiffs, which facts and circumstances need not be disclosed."

The "fact and circumstance" that was not yet known to the public was the fact that the San Diego City Council was about to break the law with respect to wastewater fees proportionality as a result of business/union lobbying. That was the supposed grounds for going into closed session according to Girard.

The only question now is: who was the most guilty, the City Attorney or those Councilors (including Brian Maienschein despite
his protestations of innocence to the U-T last Saturday) who allowed themselves to be "persuaded" by Byron Wear on behalf of the business/union lobbyists.

Arthur Levitt blames non-elected officials like Les Girard and found the elected officials, Gwinn, Murphy et al, only "negligent".

It is hard to agree with him when one realizes that it is the elected officials who get lobbied, not the un-elected ones. It is the elected officials who need campaign money. In this case it seems some of them sold their souls to get it.

When you understand all that you come to realize how principled Donna Frye's stand was. She knew that she too was biting the hand that fed her. Without the Labor Council endorsement it is difficult to see how Frye would have taken the District 6 seat from a well financed Republican opponent.

Now that's the kind of principled politics I support no matter what the party affiliation. Frye's principled action only underlines the unprincipled actions of the others.


Plot to discredit Frye will backfire - 08/17/06


by Pat Flannery

This highly significant letter from Donna Frye to Casey Gwinn dated November 18, 2002, confirms that Council Member Frye was not fooled by Gwinn and Murphy. She fought them and fought them hard.

She did her research. She challenged an ex-Judge, Dick Murphy, and a City Attorney, Casey Gwinn, on their own turf - she quoted
the law to them!

She told them: "in my opinion, this item does not meet the requirements of
California Government Code section 54956.9(b)(1) regarding significant exposure to litigation, and should, therefore, be held in open session." She went on to point out to them that "the action did not involve pending litigation, anticipated litigation, or significant exposure to litigation", as the law requires.

Not bad for a "surf chick". Maybe we should have fewer attorneys and more "surf chics" in public office. This is the Council Member whose photograph appears in today's U-T editorial under the heading "
Culture of secrecy - City Council covered up illegal actions"?

City Council" didn't do the cover up, individual Council Members did, despite the best efforts of this particular Council Member to stop them.

Frye ends her letter with this: "I take my duties and obligations as a city councilmember very seriously and have been quite concerned about the issue discussed in Item #7 from the time it was first heard in closed session. The best I knew to do after the closed session, was to ask publicly that the study referenced in Item #7 be released. Despite the fact that it is a public document and its existence was common knowledge, when I asked about the study in open session I was told it did not exist."

Those who cooked up this plot to discredit Frye in order to get the guilty ones off the hook will find that it will rebound on them. Unlike the others, Frye "took her obligations as a Council member very seriously". The fact that the guilty ones deliberately sidelined her and tried to shut her up only underlines their guilt.

It won't wash Mr. Kittle. If a "surf chick" got it, the ex-judge got it. The difference is the "surf chic" did everything she could to alert the public while Murphy conspired with Gwinn to keep it quiet. Remember Gwinn is the guy who threatened to sue the U-T if they did not suppress Don Bauder's exposé of the ballpark bonds. He would have no qualms suing Frye for divulging city attorney-client information. Diann Shipione faced the same problem over her pension whistle blowing.

Facts are stubborn things and the facts are on Donna Frye's side.


The U-T try to discredit Donna Frye - 08/17/06


by Pat Flannery

What part of page 150 and page 153 of the Kroll report does the U-T not understand?

Do they hope to save Madaffer and Peters from jail by postulating that if city officials could have fooled Frye they could have fooled anybody? The trouble is they did not fool her and the excerpts I show here prove it.

Contrast Frye's response with that of Madaffer on
page 157. The fact is that Donna caught Murphy unawares in an open session on May 14, 2002 and he was not about to let it happen again. So Les Girard fixed it for him: "any action regarding the proposed study will be taken in open session, if at all." If it all? Girard and Murphy fixed it that it would never again see the light of day, and it didn't. Now the U-T blame Donna?

They really are losing all credibility - and readership.


The case of the negligent bank robber - 08/16/06


by Pat Flannery

I went to Mike Aguirre's town hall meeting tonight. The best line came from Don McGrath. He started a story about once being asked to defend a gang of "negligent" bank robbers ......... he didn't have to go any further, the audience got it. Let's hope the people of San Diego get it. 

I am sure Michael Leone and Ann Smith, attorneys for SDCERS and the MEA respectively, recorded it and will study it carefully over the coming weeks. It summarizes Mike's strategy for achieving the pension rollbacks.

Mike will replay his August 8th questioning of Kroll's
Benito Romano to the judge in the pension case. It shows that Romano was unfamiliar with California Code 1090 and 1092, leaving Kroll's opinion about the legality of the disputed pension benefits, totally worthless.

Also, there may be some surprises for those who think they have purchased a fools pardon through Kroll. KPMG may yet baulk at signing the 2003 audit if it requires wholly disregarding the City Attorney's opinion. And Mike will continue to assert his official opinion that illegal acts were committed by sitting City Councilors. Would KPMG accept such legal exposure? Even for Levitt? I seriously doubt it.

Then the proverbial will hit the fan. Peters and the U-T will accuse Aguirre of everything. The city will be very divided. Will Mike back down? Not the Mike Aguirre we know. I believe he is preparing for such a fight. That's why he was rallying support tonight. I think the people already sense the "negligent" bank robbers quip. They are not dumb.


The Blogosphere welcomes Mike Aguirre - 08/16/06


by Pat Flannery

What kept you Mike? Blogging is the only way to go. Now you can tell us "what's REALLY going on at City Hall". I love it., Blog on Mike.

While I'm delighted that one of Mike's first acts as a blogger was to nail the U-T in a lie (bloggers hate lies), Mike may have missed the real story. Is Nancy Graham planning on hiring her own City Attorney? She has already proposed building her own
fire stations. Will she next propose her own police force? Even build her own City Hall?

She told Mike "Roth twisted her comments". Perhaps. Only Roth can answer that. Perhaps Ms. Graham should also start her own blog!

But back to the U-T. There is something really strange going on down there. Today they
"cleared" Casey Gwinn. They told us more about his "good works" than his bad works. It was
Samuel Johnson who said Patriotism is the last refuge of the scoundrel.” I would add "good works". Whenever I hear someone flaunting their "good works" I hang on to my wallet. Next we will see Gwinn working for Father Joe.

After telling us all about Casey's "good works" in the anti-domestic-violence field, they finish with a quote from a University of San Diego law professor, Shaun P. Martin: “I'd say it's very unlikely that Mr. Gwinn will get much attention in all of this beyond this (Kroll report).” And who should know better than a law professor?

As for today's U-T snow job on Gwinn, to paraphrase Mr. Johnson, I refute it thus: "why did Gwinn refuse to be interviewed by Kroll?" He took the Fifth!


Matt Hall in the U-T "pulls a Levitt" - 08/14/06


by Pat Flannery

The best way to hide a smoking gun is among a whole array of smoking guns.

Matt Hall
"pulls a Levitt". In today's journalistic snake oil piece Hall reduces key events to the level of ordinary happenings in order to take the sting out of them. Has spinmeister Levitt been giving classes in Roll Call journalism (the Capitol Hill publication he once owned)?

Hall wrote: "San Diego paid, for the time, an unusually high 7.66 percent interest rate in its private bond deal with Merrill Lynch because of the lawsuits and controversy that had dogged ballpark construction. After paying $39 million to issue the bonds, the city netted $130 million."

Is that not a smoking gun?

Hall says the 7.66% interest rate (some say it was even higher) is "unusually high" but apparently there is nothing unusual about "paying $39 million to issue the bonds". The U-T should have been screaming this $39 million fee in their headlines. But instead they have reported it several times without comment.

And the smoking gunner: here's what I wrote about
Dennis Gibson on 03/20/05. Here's what Mike Aguirre wrote in his second interim report issued February 9, 2006.

Make sure you read the infamous
Vortmann Memo. Look carefully at the fax number opposite Dennis Gibson's name: (619) 236-7228. Now go to Mayor Sanders web site. Notice Jerry's fax number: Fax: (619) 236-7228. The same number.

If Dick Murphy did not read that faxed memo from Dick Vortmann it could only be because he already knew it was on its way and what it contained. Remember Vortmann was Murphy's appointee to both the BRC and the SDCERS Board.

Is that not a smoking gun?

And Dick Vortmann may not be as lily white as he makes himself appear.

Here is what I wrote
about Vortmann on 01/18/05: "
Vortmann's letter to Pierce on February 18, 2002 asked various questions regarding the pension fund and noted "a funded ratio at 85.6 percent is getting close to the 82.3 percent trigger"."

Then I asked: "
So what was wrong with Vortmann pointing this out to Pierce in February 2002? Nothing, except that Vortmann then signed the Blue Ribbon Report [page 22] saying that the funded ratio was 97%!  Try explaining that one Vortmann."

Is that not a smoking gun?

Now if I, a struggling realtor/blogger, with neither journalistic training nor resources, could ask that question back in January 2005, how come neither Matt Hall nor the great $900 per hour Arthur Levitt have yet asked it? Another smoking gun?


David Copley should talk to his accountants then fire Kittle - 08/13/06


by Pat Flannery

It looks like David Copley told his employees in Mission Valley, "Will nobody rid me of this insolent City Attorney?" Let's hope Mike fairs better than Thomas A. Beckett. Copley's knights may have murdered him this morning but, thank goodness only in print.

Still, it speaks volumes of the damage Aguirre must be doing to the control freaks who have been running this city for generations. Their own darling City Attorney Casey Gwinn, who signed whatever they put in front of him and even got Don Bauder fired from the U-T for daring to question the ballpark bonds, is the one who is in trouble, not Mike Aguirre.

Blaming Mike is just not going to cut it with the public. It only adds to the suspicion that the U-T is covering up for somebody or something. This paper is going the way of the Santa Barbara News-Press. To quote
James Goldsborough "When they take their customers for fools, the customers will look elsewhere. In that sense, newspapers are like any other business".

Your paper has developed a definite mean streak Mr. Copley - that's not good for business. Ask Wendy McCaw. Maybe you should listen more to your accountants and less to Arthur Levitt's sidekick, Bob Kittle. "Bowtie" Bob reminds me of an old Irish saying: "he'd drive business away from the post office".

When the roof caves in (as Jim Goldsborough describes what happened in Santa Barbara) down in Mission Valley, it will make Mike Aguirre's office look like a love-nest. Perhaps a clue to David Copley's mind and his strange dislike of Goldsborough is buried in
this unpublished column that got Jim fired. Here was my take on Goldsborough's firing in '04.


April Boling should apologize to Mike Aguirre - 08/11/06


by Pat Flannery

Kroll spent a large part of it's $20 million report lambasting the billing practices of the City Attorney, an odd focus when we all know where the real problems were, on the pension board. They practically ignored the pension situation and angrily attacked Mike Aguirre because he dares ask for details of their $20 million bill. What hypocrisy.

Then today
April Boling calls Aguirre a jerk and drools over Levitt ("please accept my apology if I’m offending you" she grovels) while calling for exactly the same thing Mike called for in the Council Chamber on Tuesday: "full billing data". How about an apology to Mike for calling him a jerk April? He was defending the taxpayers of San Diego.


It will take more than a KPMG audit to straighten out this city - 08/11/06


by Pat Flannery

My good friend John Lamb sent me the KPMG "pending" list, together with his glossary of auditing abbreviations. He said he put a question mark after those he is not 100% sure of.

My first reaction when I read it was "how can this be?" This is for FY 2003!

How can the very people who want to raise our taxes to pay for their illegal backdated pension benefits think they can treat us like this? Are we not their employers? Would they get away with this kind of outrageous negligence for one second in the private sector?

What chance do I have of getting Settlement Statements for suspicious "Banc" of America loans when KPMG, who has been paid $5 million, cannot get basic items for 2003?

A tax increase? Hell will freeze over before the taxpayers of this city will pay for such incompetence. The same goes for Pension Obligation Bonds and the sale of City property.


It's time we all woke up around here - 08/10/06


by Pat Flannery

Remember Dennis Kahlie and his presentation before the City Council on October 24, 2005? Well, he has since "retired". Watch it again. It is Item 200 "Restructuring of Sewer System Interim Financing". It starts 1:12 minutes in.

Kahlie clearly told the City Council that he was able to get "3% money" from the Bank of America and that they were "light years" cheaper than everybody else. (Why, even "City Hall watchdog"
Mel Shapiro believed him). The Friday before, Kahlie had admitted to me that it was the "Banc" of America that was making the loan not the the "Bank" of America. He could hardly do otherwise because I had copies of the bond papers in my hand.

Madaffer carefully steered Kahlie through his whole presentation the following Monday. I got the impression that Jimbo knew every twist and turn of this smelly deal. He completely ignored the questions I raised as a public speaker in opposition. But when do they ever listen to public speakers? Perhaps they'll listen to bloggers. I said it at the time and I say it again, there is no way that loan was as Kahlie presented it, and the City Council knew it.

Did Madaffer know it was the "Banc" of America that was involved? He certainly did! Kahlie wisely got it onto the record during his presentation but made little of it by referring to it as some trifle raised by a picky member of the public, me. He was careful however to cover his rear by mentioning it. I knew at that moment it would come back to haunt Madaffer. What was I to do? Go back up to the podium? I'm no Mike Aguirre.

Why did Jim Madaffer propose this $152 million "restructure" and steer it through Council? T
he MWWD director Scott Tulloch had told me over the telephone on Friday that he had no problem meeting the principle and interest payments every quarter and that neither he nor his department were the initiators of this "restructure". Then who initiated it?

Jennifer Vigil
wrote this in the Union-Tribune the Friday before: "The cash-strapped city has the money to make the payments, acting City Treasurer Chuck Mueller Jr. said, but spending it on the debt would almost certainly force severe cutbacks".

Jennifer Vigil and her U-T editors must have known that the MWWD and the General Fund are separate, that there is no way that cash problems at the MWWD, not that there were any, would result in "cutbacks" in the General Fund. They were either duped or in on the deception. What about Toni Atkins? Vigil reported her thus: "Delaying the repayment of the bond, though not "the best deal in the world for the city," she said, would help San Diego avoid regulatory fines that could result from failing to keep up with sewer maintenance". She was hyping the need for this phony deal! We know she has close (undisclosed) connections to the Bank of America.

Somebody wanted that $152 million loan "restructured" real bad.
Was there a broker commission involved and if so how much? (See my BLOG dated June 16, 2006).

Since I raised this issue last October this "Banc" of America has
settled a case with the SEC, which was before it at the time:
"As part of the settlement, the respondents must pay $375 million, consisting of $250 million in disgorgement of ill-gotten gains and $125 million in civil penalties for distribution to the mutual funds and shareholders harmed as a result of market timing and late trading. For more information on the SEC's action, you can read In the Matter of Banc of America Capital Management, LLC, BACAP Distributors, LLC, and Banc of America Securities, LLC, 33-8538 (Feb. 9, 2005)." Did Kahlie and Madaffer know about this case? It was on Google.

The SEC found "that the respondents improperly entered into agreements with favored large investors enabling them to conduct short-term trading (known as “market timing”) and failed to disclose these arrangements with other investors." Was Madaffer's October 2005 loan tailor-made for these "favored large investors"?

Nobody knows how to structure a financial deal for "favored large investors" better than "the senior advisor on strategic business matters" for the company described here.

Does it not seem an odd coincidence that this unlisted private company, the Argyle Group, of which the great Arthur Levitt is a senior advisor, manages eighteen billion dollars for 550 large investors,
many of whom are pension funds and that Mr. Levitt just knew that the courts would never grant Mike Aguirre's rollbacks? Pension funds are large investors.


Levitt has a number of City Councilors over a barrel 08/10/06


by Pat Flannery

Mayor Sanders needs to protect this city's government from the outside power-grab that is currently under way in San Diego, assisted by the U-T editorial board. Going down to Mission Valley  and kowtowing to them, as Jerry did yesterday, is not what the voters want to see. They will hold him to his "no tax increase" promise, despite the U-T editorial board's determination to hand Levitt the tax increase he needs to feed his greed machine.

Levitt's power comes from the fact that he has several City Councilors over a barrel. We must remove the deeply compromised hands currently on the voting buttons at City Hall. Individuals who knowingly and notoriously committed securities fraud continue to sit on the City Council, compliments of Levitt's report. Those same City Councilors would have continued pressing the gravy button if the public had not reached the outrage stage.

Looking back, Dick Murphy was the only one who had the dubious "honor" to resign. He knew that securities fraud had been committed. He knew that the Blue Ribbon Committee Report had been held up in his Office until the ballpark bonds were funded. A nice Valentines Day present for John Moores, who then proceeded to hang Murphy out to dry.

The important thing now is not to be fooled by Levitt. Taxes are not inevitable. Bankruptcy is not inevitable. What is inevitable is the outrage and anger of the voters.


Crime pays - if you have the right connections 08/08/06


by Pat Flannery

Yesterday at City Hall, Arthur Levitt pontificated before our elected representatives while the spiky-haired, bow-tied, West-Virginia-boy-made-good, Bob Kittle, dutifully sat behind him, ostentatiously leafing through the Kroll report as if, like the rest of us, he was seeing it for the first time. All according to a well-written script.

The first step in defending our city against these dreadful people is to know who and what it is we are up against. Who is this gang "Bowtie" Bob Kittle is running with?

First read
Kroll's press release of yesterday, emphasizing its recommendation for the
"Creation of a permanent three-member Audit Committee empowered to retain the City’s independent auditors and to inquire into all aspects of City governance and financial reporting". It is easy to see what this is all about - control of City Government.

Then read Bob Kittle's (long prepared)
editorial today. It confirms my (equally long held) belief that this is an assault on our city's government:
"Two members of the panel would come from outside City Hall"... "This independent entity would have the authority to “inquire into all aspects of City governance"....."We urge the Securities and Exchange Commission, which is preparing an enforcement action against the city for its violations of securities laws, to consider the audit committee's proposals as mandatory elements of any consent decree".

Bob Kittle wants the SEC to give legal effect to Arthur Levitt's outside oversight scheme by using the threat of SEC monetary sanctions. The City Council can either comply or go to jail, you and I have no say in it. Guess what will happen.

Now look at the (probably self-written) bios of the two men involved in this scheme, Arthur Levitt and Bob Kittle.

Levitt owned the influential Capitol Hill newspaper Roll Call until going to the SEC in 1993. Kittle worked on Capitol Hill from 1977 until coming to the SD Union in 1986. They surely must have known each other on Capitol Hill.

Levitt is 75, Kittle is young enough to sport a spiky hair do. Has Levitt been mentoring our
West-Virginia-boy-made-good, Robert A. Kittle, all this time? If so it has paid off handsomely for Levitt in San Diego. Was it Kittle who suggested that the City Council hire Kroll? If so the San Diego taxpayer has just paid Bob Kittle's mentoring fees.

And then there is the
Carlyle Group. Ah, the infamous Carlyle Group, to
which Levitt is a senior advisor
on "strategic business matters". "Bowtie" Bob must lust after being Levitt's pal at their nefarious gatherings. Arranging Levitt's San Diego gig should at least get him to their cocktail parties. "Bowtie" Bob is not too bad at "strategic business matters" himself.

Here's a little Wiki on Carlyle. This is what SourceWatch has to say about them. One article in particular is a must read.

Notice that CalPERS owns 5% of Carlyle. Maybe yesterday's preservation order on SDCERS ill-gotten "benefits" wasn't such a surprise to Judie Italiano and Ann Smith after all. It could explain their mysterious confidence all along. They had an ace in the hole, Bob Kittle and his pal Arthur Levitt, who has a responsibility to Carlyle's shareholders. Mike Aguirre's rollbacks would not be good for public employee pension schemes, a large source of Carlyle's investment capital. Do not underestimate the power of that factor.

If Kittle did not invite these dreadful people into our city then I want to know who did.


San Diego can be the U.S. poster child for democracy 08/06/06


by Pat Flannery

How Bob Kittle can know that there are exactly 370 pages in the Kroll report, that the first 320 pages deal with "what went wrong at City Hall during the past decade", that the last 50 pages offer "a detailed remediation plan to restore San Diego's financial health and prevent abuses from recurring" and that some "sitting members" of the City Council may be "cited" means he has extrasensory powers - or he has read the report.

Matt Hall reported "Consultants who helped prepare the report did not return telephone calls for comment last week". He should have just asked Bob Kittle.

Hall did report some important information: "the city has paid Kroll nearly $10.5 million and Willkie, Farr & Gallagher $9.45 million" and KPMG "has already submitted invoices totaling nearly $5 million for work through mid-July".

I won't even comment on his last paragraph, it speaks volumes all by itself: "The firm [Kroll] has scheduled an 11 a.m. meeting Tuesday with The San Diego Union-Tribune's editorial board ...".

But back to Kittle's editorial and the most revealing bit of all: "The remediation elements are likely to include stringent outside oversight and monitoring to ensure that corrective actions are implemented." That little word "outside" tells everything.

The financial services industry is no different from the oil industry, the defense industry, the drug industry or any other industry, each pay to get Members of Congress elected who make sure their backers get their fair share of the corporate welfare. The
Sarbanes-Oxley Bill is to the financial services industry what the Medicare Prescription Drug Bill is to the drug industry. Levitt is the Sarbanes-Oxley champion and San Diego is his flag ship.

We should reject his pompous report and his spurious offer of "stringent outside oversight and monitoring". Kroll aims to continue bilking San Diego and other U.S. cities out of billions for "services" we can provide ourselves. There will be nothing in the Kroll report that is not already in Aguirre's reports.


Your City needs you at City Hall on Tuesday - 08/03/06


by Pat Flannery

Here is the Agenda for the Special Council Meeting on August 8, 2006 at 8:00 A.M. Peters has assigned Kroll to the Adoption Agenda as a Noticed Hearing.

Here are the full
Permanent Rules of Council, followed by some relevant extracts:
2.4.1. The Adoption Agenda shall consist of noticed hearings and ordinances and resolutions placed on the agenda for action by the Council.
7.2.1. A resolution shall be assigned by the President to the Adoption Agenda.
7.5.1. It shall be assigned to the Adoption Agenda to one of these categories: (a) Consent Items (b) Noticed Hearings (c) Other Discussion and Legislative Items.

2.10. Procedure for Debate
The following procedure shall be used in debating any resolution or ordinance:
(1) Motion and second.
(2) Brief opening statement by the proponent Initiator explaining and advocating the item (maximum of five minutes). Peters?
(3) Staff report, if any, by the appropriate staff members and relevant questions thereon by Council members limited to five minutes with the right of any other member to yield all or a portion of such member’s time.
(4) Testimony by members of the public who support the item (maximum of fifteen minutes total for all proponents).
(5) Testimony by members of the public who oppose the item (maximum of fifteen minutes total for all opponents).
(6) Discussion by Council Members. The order of recognition of Council Members desiring to speak shall be determined by the President in accord with the recognition light panel. Each Councilmember shall be allowed the opportunity to speak and shall be limited to a maximum of three minutes.
(7) Brief closing statement by the proponent Initiator (maximum of five minutes). Peters?

ITEM-601: Audit Committee Report is therefore a perfectly normal Agenda Item, subject to the same procedural rules as any other Item on any other day.

Five members of the public can put in Speaker Slips in support and five Speaker Slips in opposition. I am sure ten speakers could find lots of interesting things to say in those 30 minutes. Kroll & Co will probably leave early, take their $20 million and run. They will not want to keep their limos double parked for too long.

Apparently the 9:00 A.M. Closed Session has been moved to Monday but the regularly scheduled Tuesday meeting still starts at 10:00 A.M. That allows two hours for the Kroll Item. But if you add up the potential time for official speakers according to Rule 2.10 you get a total of 74 minutes, apart from Kroll's time. Peters may therefore try to cut the public short. But those same
Permanent Rules of Council say the public is entitled to 30 minutes.

Here is the Agenda for the
Regular Council Meeting scheduled to start at 10:00 A.M.

Buried deep among the Consent Items is "ITEM-120: Appointments to the Centre City Development Corporation (CCDC) Board of Directors. MAYOR SANDERS’ RECOMMENDATION: Adopt the resolution." Such important appointments do not belong on the Consent Agenda.

The next regularly scheduled meeting of the City Council is on Monday, September 11, 2006 at 2:00 P.M. I guess they will need the time to mull over the Kroll Report.


Levitt is being paid to keep our City Councilors out of jail - 08/02/06


by Pat Flannery

Kroll's attorney sent this to Jerry Sanders and Scott Peters on Monday. Mike Aguirre wrote this to Kroll's attorney today. Kroll is the so-called "Audit Committee".

The term "Audit Committee" comes from the
Sarbanes-Oxley Act of 2002. It established a "Public Company Accounting Oversigh Board, to oversee the audit of public companies that are subject to the securities laws, and related matters, in order to protect the interests of investors and further the public interest in the preparation of informative, accurate, and independent audit reports for companies the securities of which are sold to, and held by and for, public investors" (page 6).

Sarbanes-Oxley was enacted in response to the Enron scandal. It was not meant for cities and should never have been applied to San Diego. Kroll's role was deliberately not clearly defined by the City Council because it was not hired to get the city back into the public bond markets, it was all about keeping city officials out of jail.

Levitt quickly realized that many U.S. cities were similarly compromised and introduced the idea of applying Sarbanes-Oxley to financially troubled cities across the nation. He may have invented a whole new industry. He is a canny old fox.


Just show us the Settlement Statements - 08/02/06


by Pat Flannery

Jay Goldstone is "negotiating" a loan of $500 million with private lenders. He reported today that he has narrowed it down to two private lenders, City Bank and Goldman Sachs. Would he be doing this if he expected access to the public bond market any time soon? And why is he refinancing the $152 million "Banc" of America loan that a city official described to the Council last October as "3% money" and I described as phony?

I am still waiting for the Settlement Statement I requested from John Torell for that $152 million "Banc" of America loan (see my BLOG dated
June 16, 2006). The problem is that the City Auditor, Torell, has been sidelined by Jerry Sanders' appointee, Jay Goldstone. Sanders can fire Torell any time he likes, so Torell, about to retire, keeps his head down.

Meantime private lenders like the "Banc" of America will continue to do the City the enormous favor of lending enormous amounts of money at tax-free rates backed by a guaranteed source of income for which nobody gets to see the Settlement Statements. What is the true cost of these "private" loans and are there any middle-men involved?

Talking about banks or "bancs", whatever happened to the Bank of Coronado Jerry Sanders and Tom Stickle were setting up at the time of Jerry's election? You didn't hear much about that did you? Why did Jerry immediately sideline the City Auditor and bring in his own financial man, Jay Goldstone? Why is Jerry in favor of $500 million in Pension Obligation Bonds? Is Jerry in the banking business or the mayor business - or both?


The oldest trick in the game- release bad news, break for vacation - 08/01/06


by Pat Flannery

Kroll will deliver its long awaited report next week, probably Tuesday. They have left it until the last possible moment as the City Council goes on a four week vacation following that meeting.

Scott Lewis at The Voice wonders why the deafening silence from the U-T. He points out that the imminent arrival of this Report is "the biggest story in the city right now", yet not a word from the U-T. I agree Scott. If they know something and are are not sharing it with us, they are not a newspaper, they are a player.

My guess is that Kittle is coaching Kroll on how to manage the Report's release. By giving it the least possible advance publicity few people will watch Channel 24 and fewer still will turn up at City Hall on Tuesday.

By picking the last day of the legislative session they can all be "unavailable for comment" until September. They hope that by the time they come back the Report will be old news. It's the oldest trick in the political game- release bad news before breaking for vacation.


Manchester's Empire vs. our priceless downtown waterfront - 07/31/06


by Pat Flannery

Bob Kittle is no longer on Doug Manchester's Christmas card list that's for sure. Dougie must have spilt his coffee this morning when he read the U-T editorial describing his plans for the Navy Broadway site as "Manchester's horrendous proposal".

In its stead the U-T offered: "As we have argued in this space before, the proper course for future generations is for the city to work with the Navy to relocate its headquarters to a more secure location, such as the 32nd Street Naval Station, and then acquire the current headquarters site for public use, primarily as a park. A green expanse stretching along the embarcadero would immediately become a signature destination, an urban amenity of inestimable value."

I didn't quite spill my coffee but I let out a few whoops. Imagine. The U-T on the side of the angels! They want "a green expanse stretching along the embarcadero" where Dougie wants to pour millions of tons of concrete. Did Kittle really write that? Maybe he is so busy hounding Aguirre that he let somebody else write about less important things.

I hate to be picky at a time like this but whoever wrote it needs to understand who and what the CCDC is. It is not "San Diego's downtown redevelopment agency". No wonder Nancy Graham and Jennifer LeSar have illusions of grandeur with the U-T calling them the "downtown redevelopment agency".

CCDC is subordinate to the Redevelopment Agency, which consists of the 8 elected Members of the City Council: "
Through an operating agreement, CCDC is the Agency's representative in the development of retail, residential, office, hotel, cultural and educational projects and public improvement projects. Each of CCDC's seven-member board of directors is appointed by the Mayor and City Council to three year terms." They represent the Redevelopment Agency.

my blog last Thursday together with this report which shows how much this "agency of an agency" nonsense is costing the City.
The gods must be crazy.

Still I am grateful for the hit on Manchester. He cannot be allowed to build a personal empire on our priceless downtown waterfront. The role of the CCDC is another matter.


It is time the U-T reined in Bob Kittle - 07/29/06


by Pat Flannery

If, the like the rest of us, you are struggling to understand what sparked off the latest round of craziness at City Hall, here is what we seem to know at this stage:

  1. Diann Shipione sent Kroll copies of "memos that had been drafted by ex-Deputy City Attorney William Newsome, who had made allegations that City Attorney staff had been directed to bill enterprise funds for their work when they were not working for the enterprise Departments." How she came to have this stuff we do not know. She did not get it from Aguirre who was blindsided by it all.
  2. It seems Troy Dahlberg of Kroll called Kittle who immediately recognized its potential in his war against Aguirre who believes Peters and Murphy bear much of the responsibility for lying to the SEC. Kittle is fiercely protective of Peters.
  3. Sanders views the close relationship between Kittle and Kroll as very unhealthy, giving as it does far too much power to a "mere" newspaper editor.
  4. City Beat printed an email from Newsome to Kittle last week making it clear that wherever Kittle got his ammunition it was certainly not from him: I reported everything to your staff at the newspaper—and turned over all the evidence as well—well over a year ago, and your paper did nothing,” he wrote. “You should be ashamed of yourself and your paper, and you owe Mr. Aguirre a swift and public apology.” In his editorial Kittle made it look like Newsome was mad at Aguirre and had only recently come to Kittle with "disturbing" information. 
  5. Kittle could only have got the Newsome material from Dahlberg but didn't want us to know. However much Diann Shipione may wish to see her husband Pat Shea land the lucrative job of bankruptcy attorney for the City of San Diego, there is no way she would have participated in Kittle's sordid little vendetta against Aguirre. She must be now fervently wishing that she had stuck to the points she raised in her written submission to Kroll on June 5, 2006. They are excellent points and need to be answered by Kroll - for all of us.

The U-T is bigger than Kittle. I cannot think of a single reporter down there that I do not admire and respect. I may criticize them often but I never doubt their honesty and integrity. They must be getting really tired of Kittle's distortions. He is giving them all a bad name. Sanders (whose basic honesty and integrity I also do not doubt) must be getting awful tired of Kittle's power trip. The only people Kittle seems to get on with is Madaffer and Peters, exactly the two that this city could most do without. Birds of a feather ....


The Kroll Report may decide the bankruptcy question - 07/28/06


by Pat Flannery

It appears we can expect the Kroll Report at an open session of Council August 7th or 8th. Read Aguirre's Investigation and you will see the sequence of events that led Sanders into his uncharacteristic outburst before the City Council on July 10th.

Aguirre's investigator summarizes a July 21st interview with Julie Dubick, a staff person at the Mayor's Office (page 5): "Three weeks ago, Dubick received a call from Troy Dahlberg of Kroll, Inc. He advised that he had just interviewed Diann Shipione, a former San Diego Employees’ Retirement System Trustee. She had informed Dahlberg of irregular billing practices by the City Attorney’s Office to the Water Department. Dahlberg wanted to know what Mayor Sanders knew about these practices." Did Sanders fear Kroll would use Shipione as an excuse for further delay?

The choreography between Dahlberg and the U-T must be infuriating Sanders. Kittle had the arrogance to "summon" Aguirre before the editorial board on Thursday July 20th
. The following day he wrote: "In a meeting yesterday with The San Diego Union-Tribune editorial board, Aguirre acknowledged that the wrongdoing had occurred and said he put an end to it." Does Aguirre run down to Kittle's office in Mission Valley whenever he is summoned? We know the editorial board did not come to him.

It is interesting that Shipione is working with Newsome or is she? "Shipione had sent Dahlberg various letters and memos that had been drafted by ex-Deputy City Attorney William Newsome, who had made allegations that City Attorney staff had been directed to bill enterprise funds for their work when they were not working for the enterprise Departments." I thought she and Aguirre were best friends?

It makes one wonder whether Shipione's agenda hasn't been the same as her husband's all along - bankruptcy. She clearly believes the Kroll Report could decide the issue. She has
dared them justify to KPMG what she asserts is an ongoing illegal loan from the pension fund to the city. Husband Pat Shea's services may be needed if they issue a bad report.

Worse still, they may issue an inconclusive report. If they do, Sanders will "Frye" them alive. He has promised to go before Congress and vilify them. Jerry will love the publicity. And Aguirre? Aguirre will do what Aguirre does best - "sue the bastards".


Scott Peters and the Corbett Settlement - 07/27/06


by Pat Flannery

Scott Peters clearly does not understand the term “full actuarial funding” and therefore the Corbett Settlement. Here is what he had to say in The Voice of San Diego yesterday.

For a clear understanding of
full actuarial funding” read the City of San Diego’s Pension Reform Committee’s Final Report dated September 15th 2004, starting with “How did this happen” on page 27. Peters should read it and then tell us how the Corbett Settlement legalized retroactive benefits as he now claims.

The Pension Reform Committee requested and received an analysis of the components of the increase in the Unfunded Actuarial Accrued Liability (UAAL) from July 1, 1996 to June 30, 2003. The requested analysis, prepared by the Plan
s actuary, provided the following breakdown:

Investment Performance



Underfunding by the City



Use of Plan Earnings




Net Actuarial Losses




Benefit Enhancements













The Committee had this to say on page 30 about “deviations from the actuarial assumptions”:

"When a new or improved benefit is granted to existing employees with retroactive applicability for all prior years of service, not only does the Normal Cost
of the Plan increase, but a past service liability is also created.

This is most easily understood through the following example: Joe has worked for the City for 25 years. During those 25 years, the Plan called for retirement based on 2.5% benefit for every year of service. Joe was expecting to retire at 75% of base pay if he stayed for 30 years (30 years X 2.5% per year = 75% of base pay). The actuary also expected the same thing and the contribution into the plan was based upon that 75% assumption.

But during Joe
s 26th year of service, there was a plan improvement. Instead of receiving 2.5% for each year of service, he will now receive 3.0% for each year. An option would have been to have Joe receive 2.5% for his first 25 years of service and 3.0% for the future 5 years, but that was not the way the benefit was granted. Because of the “retroactive element,” Joe now will retire at a 90% of base pay (30 years x 3%).

The actuary will adjust Normal Cost for the upcoming years to reflect the increase, but the shortfall related to Joe’s first 25 years of service becomes a past service liability. A variety of such benefits have been granted since 1996. The past service element of these benefits has caused a significant portion of the increase to the Plan
s UAAL.” 

That's the
Pension Reform Committee talking, not Mike Aguirre.

The City Charter and State law prohibit the granting of such past service liabilities. But, according to Scott Peters the Corbett Settlement retroactively legalized them. Incidentally Jerry Sanders, in the final year of his 26 years service, had his multiplier increased from 2.5% to 3.0%, just as Joe in the example above.

According to Peters' circular logic: because an actuary quantified the past actions of the pension board he therefore legitimized them; because the courts approved a settlement (Corbett) requiring the City to contribute to its pension plan according to its actuary's assumptions, without ruling on the soundness or legality of those assumptions, all actions of the pension board are thereby legitimized and binding on the citizens of San Diego.

Either Peters is awfully stupid or he is up to his neck in a cover-up.


$450,000 per employee! - 07/27/06


by Pat Flannery

It seems I am not the only one concerned that our elected Mayor, Jerry Sanders, has been upstaged by the developers' Mayor, Nancy Graham, President of CCDC. Read this  report from the City's Independent Budget Analyst released today.

On page 7 it says: "In 2006, the City’s Redevelopment Division’s administrative costs were transferred out of the General Fund and budgeted within the City Redevelopment Fund. The FY 2007 Redevelopment Budget is $96 million, with $13 million budgeted for the administration of 28.60 employees."

Did I read that right? Over $450,000 per employee!

No wonder Andrea Tevlin, the city's Budget Analyst is recommending wresting control of the Redevelopment Agency back to the (elected) Mayor's Office. On page 8 she suggests:

· Standardization of all budgets for similar content information and format;
· Detailed justification for budget changes and requests;
· Projects to include Gross Tax Increment information along with all associated
  costs including annual yield to City;
· Review of Developer contracting and Consultant services; and
· Review of subsidies.

The citizens should get behind this lady. She is on our side.


This is not about Aguirre - 07/27/06


by Pat Flannery

Does Bob Kittle not realize that his continuous and selective outrage against Mike Aguirre is precisely what feeds the suspicions of ordinary people that the establishment has something to hide? Kittle, as the "bowtied" darling of that establishment, is undoubtedly receiving congratulatory e-mails this morning for having landed another blow on Aguirre.

Kittle reports: "This week, Aguirre's vendetta against Chapin ended abruptly when the City Council voted to drop his lawsuit and pay Chapin $74,810 to cover her legal fees." Now read Assistant City Attorney Don McGrath's letter to the editor.

Doesn't this remind you of Scott Peters swearing on a stack of Bibles (literally, in his submission to Judge Barton) that Les Girard is a liar?

This is what appears in the minutes of the City Council for Tuesday August 9, 2005: "CITY ATTORNEY COMMENT: Assistant City Attorney Les Girard announced that last week in Closed Session by a unanimous vote with Districts 2 and 8 and the Mayor vacant, the City Council authorized the City Attorney to pursue a modified cross complaint in the action SDCERS versus City of San Diego and City Attorney Michael Aguirre. In addition, the Council by the same unanimous vote with Districts 2 and 8 and the Mayor vacant, authorized the filing of two cases against potential plaintiffs with regard to recovering of monies for professional services related to the pension issues." Peters told Judge Barton it never happened.

The archived video link to this crucial
announcement has mysteriously vanished! Try it! Go to Aug 09, 2005. The video of the meetings immediately prior to and immediately after that date are still there, as are all meetings going back to May 2004. This is tampering with public records.

Did Council President Peters, Bob Kittle's good friend and neighbor in La Jolla, give the U-T false information about what happened at this week's closed session of City Council?

It seems Mr. Kittle missed this little bit: "The conditions of the settlement call for the City Council to take a vote on whether to set aside the ordinances and resolutions that created the independent SDCERS legal division"  according to Don McGrath.

Either Peters is not giving Kittle the straight scoop or the U-T needs to hold Kittle to the same standards it holds all its reporters. Or is Kittle a law unto himself?

Sooner or later, whether Kittle succeeds in sinking Aguirre or not, Kittle and his establishment friends will realize that this is not about Mike Aguirre. The fact they think so is a measure of their contempt for us. They think we do not have a mind of our own but are mesmerized by an egomaniac called Mike Aguirre. This just makes us all the more determined to get to the bottom of who is lying to us.


"Her Honor" the unelected Mayor of Downtown again - 07/26/06


by Pat Flannery

For Councilwoman Toni Atkins the real political day begins when she pops the cork on a Loire Valley chenin blanc and settles down to a nice Orange Dijon Duck dinner with her significant other, Jennifer LeSar.

Compared to Toni's boring duties at City Hall, Jennifer gets to spend her days with the real movers and shakers of San Diego, people like "Boss" Doug Manchester and "Her Honor" Nancy Graham, the
unelected Mayor of Downtown.

Jennifer, you see, is current Chairperson of CCDC, a position one holds for a while before going on to work for Doug Manchester. A bit like Purgatory. In the Catholic Faith (on which I am an expert) a place or state of temporary punishment where some souls must go for a while before entering Heaven.

Jennifer LeSar
's predecessor, Hal Sadler, has already entered the heavenly realm of "Boss" Doug Manchester's employ where he will get to romp in endless happiness along Doug's private heaven, otherwise known to the world as the San Diego Waterfront.

OK, enough of the sarcasm. Read this piece from the
San Diego Daily Transcript, Tuesday, July 25, 2006: "A new joint powers authority was approved by the combined boards of the Port Commission and the Centre City Development Corp. Tuesday to provide the infrastructure for development of San Diego's bay front" and this U-T article: "The San Diego Port Commission and the Centre City Development Corp. board voted yesterday to establish a joint powers agreement to begin setting up the finances for the massive project."

Note it was not created by the City Council, it was not even created by the Redevelopment Agency. It was created, on behalf of the people of San Diego, by CCDC, a mere "project" of the San Diego Redevelopment Agency!

Unelected Ms. LeSar gets to tell elected Ms. Atkins all about it over Orange Dijon Duck dinner. I wonder what the peons are eating this evening.


Pat Shea and Ann Smith - 07/25/06


by Pat Flannery

Greed makes strange bedfellows. Pat Shea and Ann Smith make a handsome couple.

So what is Pat Shea up to, supporting a pension tax?  He wants to make millions on a San Diego bankruptcy, just as he did on Orange County, that's what.

Pat helps Ann bring the pension tax issue to the boil, knowing all the time it has zero chance with the public, but hoping it will scare people sufficiently to look on the bankruptcy option as the lesser of two evils. Do they think we're crazy?

Perhaps Ann is brushing up on her bankruptcy law these days, hoping to go to work for Shea. Bankruptcy law pays a lot better than labor law. She must be getting awful tired of stomping her pretty little foot in front of an obdurate City Council week after week.

Personally I think Shea's support for a pension tax is self-serving and opportunistic. San Diego's property owners are paying far too much property tax already and far too much of that tax is being diverted from the General Fund to fat-cat "redevelopment projects" such as CCDC. The property tax on virtually all that vast sweep of high-rise properties you see downtown is diverted as "tax increment" -
97% to be exact!

No Pat. Good luck with your new best friend, fellow lawyer Ann Smith, but go find another sucker city, or county, to scare into bankruptcy. You thought Ms. Smith had a "
good idea"? Well, the people of San Diego have an even better idea - they don't need a pension tax and they certainly don't need a bankruptcy lawyer.


Matt Hall and the Brown Act - 07/25/06


by Pat Flannery

Matt Hall of the U-T sent me scurrying to the City Council streaming site this morning with this article. He says "A City Council majority said yesterday they would not support the pension tax." Does that sound to you like it was discussed at Council yesterday? It certainly did to me and I was concerned about the Brown Act.

What I assume Matt meant to say was: "a majority of City Councilors contacted yesterday said they would not support the pension tax." The Brown Act would have been violated if the City Council had indeed discussed it yesterday in Council.


The U-T continue to run interference for Kroll - 07/21/06


by Pat Flannery

Don't be fooled by today's U-T editorial on Mike Aguirre. It is not about Aguirre. It goes much deeper. This is the U-T shilling for Arthur Levitt - again!

Let's start with their conclusion: "Whether the assertions made by the two former deputy city attorneys are true is unknown. And the reason for this is clear: Aguirre chose to investigate other city officials rather than the alleged crimes in his own office. The fact that he selectively determined not to pursue potential felonies in the City Attorney's Office is extraordinarily troubling."

Now go back to their fourth paragraph: "Ironically, the allegations involving the City Attorney's Office are now a key factor holding up release of an investigation by the city's independent audit committee, also referred to as Kroll."

The U-T is crafting a red herring to justify the stalling of the Kroll report. Some day we will learn their motivation.

The U-T is using the widespread practice of "General Fund" departments augmenting their budgets by raiding the so-called "Enterprise Funds". Sanders recently condemned the practice saying: "
people have been very creative about how that money has been used to augment other city operations". By clamping down on such dubious practices he unwittingly provided an excuse for Kroll, courtesy of the "watchdog" U-T.

The U-T is focusing on the practice as it related to the City Attorney's Office, before Aguirre took office. The fact that he immediately put a stop to it upon taking office in December 2004 and that it has continued in other departments, means nothing to the U-T. "Selective outrage" fits their editorial very nicely - their selective outrage.

As for Bill Newsome's part in all this, obviously getting fired by Aguirre was not a pleasant experience. Aguirre has never explained why he did it - two days after being sworn in on December 8, 2004.

I notice Newsome is the nominal client of Michael Conger in a suit against SDCERS, described in City Council agenda as "a claim for monetary damages filed by Attorney Michael Conger on behalf of the SDCERS beneficiaries". So he may have had other fish to fry that conflicted with Aguirre's legal strategy. That case is still pending before the courts. No doubt Newsome noticed that the U-T can always be relied upon to eagerly embrace anybody who has a grudge against Aguirre.

But the really important thing to bear in mind is that this is not about Aguirre or Newsome, it is about the U-T continuing to run interference for Kroll and Arthur Levitt.


Peters denies everything - 07/19/06


by Pat Flannery

David Rolland in this week's City Beat describes how in an interview with Scott Peters he was "taken aback when Peters stopped me cold and challenged me to tell him exactly what “faulty” disclosures the City Council had authorized".

Too bad Mr. Rolland did not have a copy of
this law suit, filed by the City of San Diego on November 30, 2005,
accusing it’s bond counsel, Orrick, Herrington & Sutcliffe of "significant roles in creating and covering up financial irregularities." (I posted it on my BLOG at the time).

This 39 page official City document, which Scott Peters apparently has never read, is the best description I personally have read of the "faulty" financial disclosures that never happened - according to Peters. I would urge you to "favorite" the above link and have it handy when Peters next challenges a reporter or any member of the public on the "faulty" disclosures issue. (Peters will probably say that attorney Dan L. Stanford was acting "in his own name only" when he filed that law suit on behalf of the City).

Peters thinks
: "reporters generally don’t dig deep enough". Does that include bloggers? Scott, get ready for San Diego's own "Big Dig".


Peters and Murphy must stop Aguirre or they go to jail - 07/18/06


by Pat Flannery

Scott Peters is using the power and prestige of his Council Presidency to stop Aguirre.

Judie Italiano and Ann Smith knew he would do that, which was why they insisted on him for the position. Neither want to risk losing in court so they must topple Aguirre before he even gets there. There are billions of dollars and jail time at stake.

The fact that Peters' attorney (Sheppard Mullin) tried to dig up dirt in Aguirre's 1988 divorce shows how nasty this thing can get and shows every sign of getting much nastier before it is over. Jail is not a pleasant place (ask Duke Cunningham) yet somebody from this city is undoubtedly going there.

Here is Peters'
full petition.
He claims Aguirre is not "authorized" by the City Council to pursue the pension case. Pursue the case? Read the SDCERS lawsuit. It was they who sued Aguirre! On the top of page 2 they specifically say they are suing him "in his capacity as City Attorney". Now Peters wants him to respond as a private citizen?

Peters would not be sticking his neck out so far and fighting this so desperately if he hadn't something really big to hide. The fact that Bob Kittle is so protective of him only adds to my suspicions. This is all about money, big money. City Bonds are big money and where the rubber meets the road. It will all come out eventually and somebody will go to jail.

It is very disingenuous of Peters to say that the City Council merely "authorized" Aguirre to file a cross complaint in the pension case "in his own name only". What kind of nonsense is that? Why would the City Council give "permission" to anybody to do something that has nothing to do with it? Yet that is the gobbledygook Peters is peddling.

On page 13, line 22 of his petition, Peters states that he was not even aware that Aguirre had filed his cross complaint in the name of the City until February or March 2006. Really?

On August 18, 2005 Peters gave an interview to
Scott Lewis of The Voice complaining about the fact that Assistant City Attorney Les Girard had read the following statement into the record of an open Council meeting on August 15, 2005: "last week in closed session by a unanimous vote the City Council authorized the city attorney to pursue a modified cross complaint in the action of SDCERS v. the city of San Diego and City Attorney Michael Aguirre".

He did not challenge the word "authorized" in that interview just how Aguirre should sign his name. He said
that "he (Aguirre) has been authorized to make that argument in his own name but not on behalf of the City Council or the City of San Diego". Yet he said nothing at the open August 15 Council meeting. He just sat there.

He did not challenge Girard at that meeting because he knew very well that other Council Members would dispute it with him in public. Donna Frye for example has since filed a sworn statement with the courts contradicting  Peters' version. No doubt she would have hotly challenged Peters in open Council on August 15, 2005 if Peters spoke up.

Peters is a back room guy, just like Dick Murphy. It is no coincidence that Murphy supports him in
getting rid of Aguirre. They even used
Sheppard Mullin as their attorney. Why? Because Aguirre has identified Murphy and Peters as the most culpable in hiding the pension deficit from Wall Street.

In the
Conclusion of his Report 2 dated February 2, 2005 , Aguirre says:
"the San Diego City Attorney concludes that there is substantial evidence consistent with a finding that the Mayor and Council authorized the issuance of City bond offering and related disclosure documents, identified above, that the Mayor and City Council Members knew to be false, as set forth above".

Aguirre singled out Peters and Murphy:
"The Mayor and Council Member Scott Peters have the most relevant training for understanding the underlying complex facts and circumstances. Both are Phi Beta Kappa graduates with economic degrees. Mayor Murphy holds a Masters of Business Administration Degree from the Harvard Business School. Council Member Peters is a graduate of Duke University. Mayor Murphy has a law degree from Stanford University; Council Member Peters has a law degree from New York University."

Yes, these two have good reason to fear Mike Aguirre and will do anything to stop him. They do not
want to answer to the SEC for this. You can sense their desperation.

According to a reader: "City Council did not authorize Peters motion. Nor did they authorize payment to the law firm for this kind of litigation. The law firm is only authorized to advise Peters when he is investigated by the SEC.....Gov Code 995." My reader is right. Listen to the Council discuss this important Item 332 on June 20, 2006. It starts
6 hrs 20 mins in. Stay for the exchange between Peters and Aguirre.

In his
petition Peters claims that he is acting in his official capacity as current Council President - then he is the one who needs authorization, not Aguirre.


Has Bob Kittle seen the Kroll report? - 07/14/06


by Pat Flannery

It was intriguing listening to "Bowtie Bob" Kittle defend Kroll & Co on KPBS Editor's Round Table this morning. First he accused Mayor Sanders of sending the wrong message to Wall Street by complaining about the long delay, then he accused Diann Shipione of contributing towards the delay by asking her 10 questions.

According to Kittle, Sanders is trying to cover up wrongdoing while Kroll & Co is trying to uncover it. The rift between Sanders and the U-T is widening by the day.

Has Bob Kittle seen the Kroll report? Is that what set Sanders off? Did somebody at the U-T let it slip? Kittle seemed awfully sure of its contents this morning. He even told us that KPMG has been given a copy - so it does exist! He explained that KPMG are studying it in order to give Kroll "feedback". Is Kittle part of this "feedback"?

If it turns out that a newspaper editor received this vital $20 million report before the city's mayor, there will be hell to pay. Yet it certainly looks that way right now. Why would Kroll & Co do that? Payback time for U-T support in blackmailing the city out of millions of dollars by dragging this thing out for so long?

We have become accustomed to the U-T's vitriolic campaign against Mike Aguirre because he is a Democrat and therefore not their choice for City Attorney, but they are now attacking Sanders who, though a Republican, was not their first choice for mayor. Are they going to unseal the Sanders' divorce papers and dig for dirt there too? Is that the fate of anybody who dares take office without U-T support? Is that why Sanders backed off his criticism of the U-T on Tuesday? They certainly got to him somehow.

While I can almost understand that greed for money motivated the U-T/Kroll partnership, what the Mafia would call "only business", I cannot understand Kittle's personal attack on Diann Shipione this morning. That was low even for "Bowtie Bob". She is a civilian. I think he should apologize. She in no way is responsible for delaying the Kroll report.

Whatever is going on Kittle and the U-T is playing to win. God help who gets in their way.


The real estate sky is not falling - 07/14/06


by Pat Flannery

There is an old saying among journalists that they do not report the airplanes that land safely. In fact they rarely report good news. It's just the way it is. So I thought I would provide a little balance to all the bad news about real estate these days.
My personal observation is that the most significant development is speculator withdrawal. The difference between last year's sales and this year's sales is largely attributable to that factor.

The real estate market is much healthier today than it was this time last year. People are buying and selling real estate according to their housing needs not as an alternative to the stock market. The important thing to remember is that the real estate market is an integral part of the overall economy.

not lose confidence in the San Diego real estate market until the overall economy falters. We have a very healthy local economy which means we have lots of people who are ready willing and able to purchase your present home if you wish to move up. I think the two columns on the right make that abundantly clear.


The Madaffer "fix it" machine is in full swing this week - 07/13/06


by Pat Flannery

Where is "Comical Jim" Madaffer this week? Why was he "excused" from the Council meetings both Monday and Tuesday? Perhaps he is trying to get Colleen Windsor a job. Keeping her from blabbing everything she knows must surely be his priority these days.

One outfit currently in need of an experienced spin doctor is Kroll & Co.
Jodie Rosenbloom, their Media Relations Manager, bravely put her head above the parapet yesterday and spoke to the media but she will need help. San Diego politics are tricky. Ms. Windsor would be perfect for the job.

I wonder if  "Comical Jim" is in Washington trying to get her hired by Kroll. That would be a typical Madaffer stroke. One thing for sure, Madaffer and Murphy are not going to leave her "lying" around San Diego as a loose cannon. The Bank of America is another possibility. What a tangled web the B of A weave in San Diego.

CCDC web site describes Jennifer LeSar as "the investment manager and senior vice president at Bank of America. She is primarily responsible for managing the Southern California portfolio of real estate developments." LeSar was appointed to the CCDC board in September 2002 by Mayor Dick Murphy, himself a former San Diego Marketing Director for Bank of America. She is now chair of CCDC.

The City of San Diego Ethics Commission wrote
this letter to Toni Atkins on February 21, 2006. But that was months after her October 24, 2005 vote to "restructure" the $152 million Sewer Revenue Bond, placed with the Bank of America in 2004. Atkins knew the answers to all my questions on that day but kept her silence. But I will keep asking them. There is something smelly about the Bank of America "bond" deals.

I suspect the Madaffer "fix it" machine is in full swing this week. He was much too busy to concern himself with mundane matters like City Council Meetings.


The U-T is not an unbiased reporter - 07/12/06


by Pat Flannery

"Bowtie" Bob Kittle and his U-T editorial board came out fighting this morning. They say "City must not count on benefit rollback" and "Mayor's attack on audit panel harms city".

With regard to the first: who ever said the city should
"count on Aguirre's legal maneuvering to bail the city out of its worsening pension fund crisis"? Certainly not Aguirre. Where does "Bowtie" Bob get that one? Far from relying on any one effort, like the Aguirre legal strategy, the City should be facing up to the pension crisis in a dozen different ways.

I am getting tired of the U-T and Scott Peters constantly sniping at the one person who is doing anything about the pension crisis. Peters made yet another snide remark about Aguirre's pension roll backs at City Council yesterday. He spoke totally out of context, which shows he is consumed with personal animus toward the City Attorney.

The kindest explanation is that it is just normal politics. It is no secret that Peters would love to be City Attorney and will probably run against Aguirre next time. But it could also be fear. Peters may see Aguirre as the messenger of doom when he thinks back on those city bonds he and other officials signed off on. Wall Street don't like being lied to.

But why would the U-T wish to discredit Aguirre's pension roll-back strategy? What have they got to fear from roll backs? They are hardly champions of the unions. Could it be that if Aguirre succeeds the city might escape bankruptcy, while the U-T secretly wants to "bring it on"? Now that's cynical, even for me. But would not a bankruptcy fire sale produce huge (real estate) pickings for wealthy "investors" like the U-T's owners?

As to the U-T's second contribution to the political debate this morning, "
Mayor's attack on audit panel harms city": how does it harm the city?
They say it "served only to undermine the city's once-laudatory commitment to a thorough and independent investigation". Were those secret meetings between Arthur Levitt and the U-T editorial board the "once-laudatory commitment to a thorough and independent investigation" Kittle is referring to?

I wish Sanders had not dropped his reference to those meetings yesterday. We need a counter to the arrogance of people like "Bowtie" Bob and the elitism he represents.


Facts are stubborn things - 07/11/06


by Pat Flannery

Barton "punted". He only had to concern himself with one fact - whether or not there was a 1090 violation. It's the only fact that matters. But he allowed the unions to throw up all kinds of smokescreens around the one fact that should decide the case.

The transcript of the case Judge Barton heard will show that the SDCERS lawyer, Leone, admitted that the city of San Diego bribed their own pension board. It's in the court record!

Aguirre is going directly to the California Appeal Court rather than inflict a long drawn out jury trial on the city. Mike has total confidence in his case. The Appeal Judges are not going to listen to stuff that has nothing to do with whether a 1090 violation occurred or not.

Aguirre will argue the case himself before the Appeal Court - and win! There is no factual dispute on the only fact that matters. That's called a fact Judge Barton.


Back to normal with the U-T in charge - 07/11/06


by Pat Flannery

For one brief shining moment we had a mayor with some intestinal fortitude. It lasted a whole day.

"I don't want them issuing a press release or meeting with the Editorial Board of the Union Tribune", Sanders wrote yesterday. Today, before the City Council, it became plain old  "I don't want them issuing a press release". He dropped the U-T jab.

Obviously he got a nasty-gram from Kittle and buckled. He wimped out! What a shame.


We finally have some outrage - 07/10/06


by Pat Flannery

I think we may have ourselves a Mayor. It's like he read my piece below about wimpy politicians. We should now fully support him in his outrage at Levitt and the Kroll Co. (aided and abetted by the U-T) who have been holding this city hostage for so long.

I love his crack "I don t want them issuing a press release or meeting with the Editorial Board of the Union Tribune." That's beautiful. I never thought I would see the day in San Diego. Thank you Jerry. We elected you, not Bob Kittle. I hope he gets the message.

Jerry even identified the problem "It is my deeply held opinion that the arrangement the City entered into with Kroll was ill conceived and overly general". Indeed it was Jerry - deliberately so.

We may just have ourselves a no-nonsense Mayor to go along with a no-nonsense City Attorney. The days of double-speak may be over, plain-speak may now be the official language of San Diego. No wouldn't that be nice for a change?


Anybody for jury duty? - 07/10/06


by Pat Flannery

The problem at City Hall is that there are too many damn lawyers and not enough politicians.

Paragraph 24 of the California Association of Realtors standard
Purchase Agreement wisely states: "All understandings between the parties are incorporated in this Agreement. Its terms are intended by the parties as a final, complete and exclusive expression of their Agreement with respect to its subject matter, and may not be contradicted by evidence of any prior agreement or contemporaneous oral agreement."

When you purchase a home through a Realtor you are protected from the costly litigation the city must now endure.

According to
Judge Barton today "Based on the totality of the evidence presented  the Court finds there is a conflict in the evidence and thus a triable issue of material fact concerning the nature, extent, terms and effect of the agreements between the parties."

Barton explains: "By definition, a contract that cannot be interpreted by reference to its express terms and requires reference to the facts and circumstances surrounding its creation is ambiguous. Otherwise, reliance on parole evidence would be unnecessary."

So now the suffering tax payer gets to pay for an expensive, protracted jury trial.

We Realtors write our contracts to mean what they say - no more, no less. . We do it to keep the lawyers at bay.

It was not lawyers who suggested that we put "all understandings between the parties are incorporated in this Agreement" in all our contracts. It was ordinary Realtors like myself who insisted upon it. We knew that left to themselves the lawyers would have us asking their permission every time we wanted to go to the bathroom.

Now Ann Smith and her entourage of pugilistic union members will get to "he said, she said" us to death. When all we needed was a few plain spoken (non-lawyer) politicians who would vote for nothing unless their gardener (or realtor) could understand it.


Superwoman quits - 07/07/06


by Pat Flannery

The quality of life in San Diego took what may well be a fatal blow today. Future generations will mark this day, Black Friday, as the day Madaffer's Superwoman,  Colleen Windsor, suddenly resigned! Our tragic city may never recover.

You think I exaggerate?

Then read "Comical Jim's"
letter to the U-T
on June 25th

Scroll down, it's the sixth letter in the letters column.


Did he not say that in hiring Ms. Windsor he was "making a long-term investment that will benefit future generations"?; that he unselfishly shouldered the burden of Ms. Windsor's salary for "the greatest good of the community", "to improve the quality of life" of all San Diegans?

Did he not say that it was "a predetermined, planned transfer of funds" from the "Infrastructure Improvement Fund" to benefit us all?

It was Andrew Donohue of
The Voice who, on
June 8, 2006 first reported that Windsor's hiring resulted in a budget deficit for Madaffer's office and asked where the money was to be found. Madaffer then exploded with his ridiculous claim that he "planned for one year for this investment of resources". The only parallel I could think of was Saddam Hussein's "Information Minister", Comical Ali.

But it was Daniel Strumpf at City Beat who first got into the
Colleen Windsor story pretty heavily at the time Madaffer hired her last year and even got into a little spat with KUSI's Doug Curlee who sided with Windsor and Madaffer, as Dan describes in this followup story.

In any case it is these so-called "alternative" news organizations that are the real watchdogs in our community. Perhaps Doug Curlee might want to do a follow up piece to his "hit piece" on City Beat last year. How about it Doug?


The Malcolm Magic - 07/07/06


by Pat Flannery

Read Matt Potter's June 26, 2003 Reader article detailing David Malcolm' s e-mail contacts with Duke Energy while serving as a Port Commissioner. See if you can figure out how Malcolm was able to convince Judge Einhorn (twice) that the first time he talked to Duke was in May 2000. This was long after he participated in the December 4, 1998 Port Authority action that opened the door for the financial whiz kids at Duke Energy to play games with our electricity supply. Remember how they turned their generators on and off in order to create an electricity "shortage"?

Maybe it was the convincing way this pillar of society, David Malcolm, told the Court
under oath (page 3 line 29) that got him completely off the hook - twice.

Malcolm seems to have a way with judges. As a real estate broker I stand in awe at his ability to convince a real estate administrative judge not to pull his broker's license after being convicted of a felony. The real estate judge ruled that Malcolm's activities on the Port Commission "had nothing to do with the field of real estate" when it had everything to do with real estate. My advice to mere mortal brokers (like myself) is: don't try the
Malcolm Magic at home, you'll get hurt..

So what is the Malcolm Magic? Influence peddling. That's why Duke Energy hired him, no other. How does it all work? Well, first you get yourself a seat on important boards and commissions and then you peddle influence.

Matt Potter: "Malcolm and Nathanson (a fellow member of the state coastal commission) voted consistently in favor of developments favored by Brown's (as in Willie) campaign contributors, and their votes frequently represented the margin of approval for controversial projects." Simple. No Magic.

Why a power plant in the South Bay? Because Duke would have shut it down (which is what they were doing with California power plants at the time) and the site would then become a "redevelopment area" with loads of juicy tax increment diverted to guys like Malcolm, the kind of tax "diversion" Madaffer wants for Grantville and the Paseo project. Property tax is diverted alright, into their pockets. It's called "redevelopment".

These guys aren't any smarter than the rest of us, they are just better connected. The sad thing is that, cloaking themselves in "good works", they get away with it. It's not easy being an honest broker sometimes. But then I know I would go to jail for sure if I tried the Malcolm Magic. It's not how capable or honest you are, it's who you know.


Nearing a judgment in the pension case - 07/05/06


by Pat Flannery

This morning Judge Barton heard from both sides in the pension case regarding possible "new law" that may have been created in the Carson case. He did not wish to leave room for any party to complain later that they were not fully heard, in the event that the Carson case has changed things.

I went along to hear the arguments for myself. Here is what happened:

Aguirre went first and argued that the Carson case did not create any new law but merely followed a long line of judgmental precedents in upholding 1090. He seemed to be telling Barton that he will have a much easier time of it afterwards (always a judge's primary concern) if he simply joins the chorus of judges who hold 1090 sacred. Mike submitted that there are no triable issues here.1090 was violated. Apply the law.

Not so, according to Michael Leone and Ann Smith, attorneys for SDCERS and the MEA respectively. Smith wasted her entire time playing her usual victim role and arguing that Carson was legally irrelevant when Aguirre had already conceded that.

Then came the bombshell. Attorney for the Pension Board, Michael Leone, clearly admitted that the City had bribed his client.  Thus he blew his entire case this morning.

His statement today is actually consistent with his defense so far. He has repeatedly asserted that the City, not SDCERS, is the guilty party. Does he not realize that admitting there is a guilty party is like scuttling your own ship? SDCERS goes down with the City. How much are they paying this guy?

If I were a betting man I would bet that Mike Aguirre won his case this morning. He gave Barton all he needs to enter a summary judgment. Leone clinched the deal by admitting that there actually was a 1090 violation. Leone and Smith forgot that Barton does not have to rule on anybody's motivation, nor be concerned with anything other than whether there was in fact a 1090 violation. The law takes over from there.

As for Barton's concern last week that innocent bystanders (i.e. retired city employees) may get hurt and that they were not represented before him, it is not his concern. They are all free to meet at City Hall and renegotiate the whole thing over again. That's what City Halls are for. Victimhood, if it exists in this case, is a political matter not a legal matter. That is where Ann Smith made her fundamental mistake - playing the "victim" game. It has been her eternal mantra.

If my analysis is correct then it is all the more urgent that we get rid of Atkins, Peters and Madaffer, in my opinion the most tainted of the City Councilors, particularly Madaffer. It is inconceivable to me that Madaffer could be allowed to play any role whatsoever in renegotiating this pension mess, having played such a huge part in creating it.

My hope is that Barton will issue a summary judgment setting aside MP-I and MP-2, that the above three will resign, that a new City Council will then come together under Mayor Sanders and do what we elected them to do - negotiate us out of this mess.

There is absolutely no need for either bankruptcy or a tax increase. This city is not broke, it is just badly led. Let's fix the leadership problem and we will fix our city. The legal wrangling is almost over, now let's get back to tough but honest politics. Let's renegotiate the flawed deals, MP-1 and MP-2 and there will be no more victims.


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