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Blog Archives - 2006
Manchester's Monstrosity will cost
4 seats on the Council - 09/28/06
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,
"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
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.
3. 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
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
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
Sanders is now the
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
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
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
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 -
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.
an editorial and the "news" team
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
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.
unions now grab their chance? -
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
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
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
Right now the biggest culprit is
(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
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
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
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,
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.
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
The scary thing is that
needs only two votes, to go along with the three
pro-developer Republicans, Madaffer,
and Faulconer. We all know he has Peters so all he
really needs is one. If
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
on this right now. It is the sort of thing at which she
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.
a supporter of labor and unions but clearly see that
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
Manchester try to sue the City?
Manchester may lash back
with threats of massive lawsuits. That's how he
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
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
Roque De La Fuente
home whimpering to his wife without the $150 million he
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
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
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
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
We could become
the Alexandria of the Modern World.
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
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."
Their brilliant tactic now seems to be to put
a scare into the public mind that
“It's headed right toward BRAC”, as his
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
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
If Joan Kroc were still alive I bet she would want
something like that to complement
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
the symbol of San Diego? (The Lincoln Club is the
developers' club. They all belong to it, even
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.
being censored? 09/21/06
Is the City of San Diego Cable
Office subject to political censorship?
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
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
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
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.
Manchester's project the coup de grâce
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
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.
You're everything we knew you were
Now who could have
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
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
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
"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.
Sanders' monitor - 09/20/06
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
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
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
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
who looked very uncomfortable up there, especially when
I said I thought Nancy Graham had written the opinion he
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
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.
As 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
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
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
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
It is informative that Bob
Kittle does not call for the release of the draft SEC
enforcement order in his
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
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
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
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
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
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
They want to
place CCDC above the City Council -
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
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
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
Then it falsely asserts that any delegation of authority
to an agent is
"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.
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
This opinion reads to me like it was written by ex-land
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
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
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 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
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
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
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.
Mike, "obstruct" the hell out of them -
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
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
reason for today's secrecy. Here is
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
(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
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
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
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
The Brown Act
is winning -
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?
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 -
As promised I
tried to obtain a copy of the special Closed Session
Report for the
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.
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
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.
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
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
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.
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
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
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
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
And by the way Jennifer (Vigil)
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
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
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.
for the Brown Act. -
We would never have known
"a secret closed meeting" held before the "historic"
Special Public Meeting of the City Council last
Kittle had not blurted it out in his Friday
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
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
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
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
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-
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
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
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
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
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
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
for instance was looking out for the City when her boss
Mayor Murphy was looking out for John Moores. It aint
over yet folks.
big business -
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
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"
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
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
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
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
Kittle want a Wall Street Monitor real bad. -
by Pat Flannery
Why do you suppose the editorial board of the U-T
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
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
And why do you suppose the U-T
thinks the Los Angeles SEC staff are not tough enough on
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.
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.
for appointing a Wall Street monitor right away is
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
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
on August 22, Aguirre and the outside attorney
from the Los Angeles branch of the law firm
Morgan Lewis & Bockius
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.
Sanders been "got at" too? - 08/31/06
by Pat Flannery
How could he have gone
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."
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 -
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
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.
Remediation Plan -
by Pat Flannery
The only item I have any difficulty
Mike Aguirre's new Plan is
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
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
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
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
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
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.
Kroll/Carlyle Plan -
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
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.
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
Carlyle Group, to
which Levitt is a
Here's a little
on Carlyle. This is what
has to say about them. One article in particular is a
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
we would still be in the dark -
We must be winning! Why else would
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.
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?"
"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?
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.
Gwinn's protégé, Leslie Devaney,
had become City Attorney instead of Mike would we ever
have learned about the "Vortmann
Letter" (see my
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
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 -
As part of
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",
Bribe is working! -
by Pat Flannery
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.
real Vortmann "Bombshell" -
by Pat Flannery
The now infamous
April 29, 2002,
mysteriously leaked to
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
This is the Vortmann
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
about it back on January 18, 2005, referencing a report
in the U-T that same day by
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.
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
CityBeat was not doing an investigation before it
received the memo, but it certainly was afterwards.
Matt Hall of the U-T did a
on it the following day, February 3, 2005. This is a
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
used by Mike in his February 9, 2005
Second Interim Report
seems to be a degraded copy of
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
Why else would any of
the 8 recipients want to hide their copy?
Murphy have it leaked in order to lead Aguirre away from
much more significant February 18, 2002 Vortmann
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
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
to the lucrative Ballpark manger's job!
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.
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.
famous "bombshell" memo may have been a plant all along,
with Murphy's finger on its timer.
interesting that the only person
exonerated was April Boling and Ms. Boling is now
pointing the finger at John Kern:
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
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
On 21 September 2001, the Mayor also appointed Mr.
Vortmann to the City Employees' Retirement System Board
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
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
read his June 9, 2004
with Vinson & Elkins, recycled in the Kroll report. His
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
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.
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.
interfering with the duties of a City Attorney,
by Pat Flannery
According to his
today Mike Aguirre and outside attorney
from the Los Angeles branch of the law firm
Morgan Lewis & Bockius
working very well together despite the U-T's efforts to
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.
threatened to sue them for a lot less - Don Bauder's
criticism of the ballpark bonds.
entire City Council is hiding under Donna Frye's skirts
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
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.
editorial last week "Assessing
editor Dave Rolland indulged in the Shakespearean
science of "damning with feint praise".
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
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.
letter is "Ground Zero" -
by Pat Flannery
explains it all.
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
Secretary-Treasurer of the
San Diego-Imperial Counties Labor
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"
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.
Les Girard's reply
to the Donna Frye
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
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
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".
54956.9 (b) 3 (a) that Girard relied upon, says
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
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.
Levitt blames non-elected officials like Les Girard and
found the elected officials, Gwinn, Murphy et al, only
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.
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
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.
discredit Frye will backfire -
by Pat Flannery
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
She told them: "in my opinion, this
item does not meet the requirements of
California Government Code section
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
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
of secrecy -
City Council covered up illegal
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.
stubborn things and the facts are on Donna Frye's side.
try to discredit Donna Frye -
by Pat Flannery
What part of
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.
response with that of Madaffer on
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
case of the negligent bank robber -
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
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.
Blogosphere welcomes Mike Aguirre -
by Pat Flannery
What kept you Mike?
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
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
Casey Gwinn. They told us more about his "good works"
than his bad works. It was
“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
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
Matt Hall in
the U-T "pulls a Levitt" -
by Pat Flannery
best way to hide a smoking gun
is among a whole array of
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
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
on 03/20/05. Here's what Mike
in his second interim report
issued February 9, 2006.
Make sure you read the infamous
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?
Dick Vortmann may not be as lily
white as he makes himself
Here is what I wrote
about Vortmann on 01/18/05:
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
saying that the funded ratio was 97%! Try
explaining that one Vortmann."
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?
Copley should talk to his accountants then fire Kittle -
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
"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
on Goldsborough's firing in '04.
Boling should apologize to Mike Aguirre -
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.
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.
take more than a KPMG audit to straighten out this city
by Pat Flannery
My good friend John Lamb
sent me the
KPMG "pending" list,
together with his
of auditing abbreviations. He said he put a question
mark after those he is not 100% sure of.
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
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.
time we all woke up around here -
by Pat Flannery
Remember Dennis Kahlie
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".
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
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.
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? The
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?
in the Union-Tribune the Friday
"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"
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,
(Feb. 9, 2005)."
Did Kahlie and Madaffer know about this case? It was on
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
better than "the
for the company described
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.
has a number of City Councilors over a barrel
by Pat Flannery
Mayor Sanders needs to
protect this city's government from the
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
inevitable. Bankruptcy is not
inevitable. What is inevitable is the outrage and anger
of the voters.
pays - if you have the right connections
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
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
It is easy to see what this is all about - control of
Then read Bob Kittle's (long
today. It confirms my (equally long held) belief that
this is an assault on our city's government:
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
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
Now look at the (probably self-written) bios of the two
men involved in this scheme,
Levitt owned the influential Capitol Hill
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
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
If so the San Diego taxpayer has just paid Bob Kittle's
And then there is the
Carlyle Group, to
which Levitt is a
"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.
is not too bad at "strategic
business matters" himself.
Here's a little
on Carlyle. This is what
has to say about them. One article in particular is a
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.
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
by Pat Flannery
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.
reported "Consultants who helped prepare the report
did not return telephone calls for comment last week".
He should have just asked Bob Kittle.
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
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
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
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.
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,
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.
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
procedure shall be used in debating any resolution or
(1) Motion and second.
opening statement by the proponent Initiator explaining
and advocating the item (maximum of five minutes).
(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
(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
(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.
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
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.
the Agenda for the
Regular Council Meeting
scheduled to start at 10:00 A.M.
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
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.
is being paid to keep our City Councilors out of jail -
by Pat Flannery
to Jerry Sanders and Scott Peters on Monday. Mike
wrote this to Kroll's
attorney today. Kroll is the so-called "Audit
The term "Audit Committee" comes from
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).
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 -
by Pat Flannery
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.
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
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?
oldest trick in the game- release bad news, break for
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
Scott Lewis at
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
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
describing his plans for the Navy Broadway site as
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
subordinate to the Redevelopment Agency, which
consists of the 8
elected Members of the City Council: "Through
an operating agreement,
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.
last Thursday together with
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
time the U-T reined in Bob Kittle -
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:
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.
- 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.
- 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.
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
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
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 ....
Kroll Report may decide the bankruptcy question -
by Pat Flannery
It appears we can expect the Kroll
Report at an open session of Council August 7th or 8th.
and you will see the sequence of events that led Sanders
into his uncharacteristic
before the City Council on July 10th.
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
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
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
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
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
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
Peters and the Corbett Settlement -
by Pat Flannery
Scott Peters clearly does
not understand the term “full
and therefore the Corbett Settlement.
Here is what he had to say
The Voice of San Diego
For a clear understanding of
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
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:
by the City
Use of Plan
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
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
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
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! -
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
from the City's Independent Budget Analyst released
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
· 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
annual yield to City;
· Review of Developer
contracting and Consultant services; and
· Review of
The citizens should get behind this lady. She is on
not about Aguirre -
by Pat Flannery
Does Bob Kittle not realize that his
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?
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
archived video link to this crucial
has mysteriously vanished!
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
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
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.
Honor" the unelected Mayor of Downtown again -
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
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.
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
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
"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
dinner. I wonder what the peons are eating
Shea and Ann Smith -
by Pat Flannery
Pat Shea and Ann Smith make a
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
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
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
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
Hall and the Brown Act -
by Pat Flannery
Matt Hall of the U-T sent me
scurrying to the City Council
this morning with
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
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.
continue to run interference for Kroll -
by Pat Flannery
Don't be fooled by today's
on Mike Aguirre. It is not about Aguirre. It goes much
deeper. This is the U-T shilling for Arthur Levitt -
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
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
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
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
- 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
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.
denies everything -
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
Too bad Mr. Rolland did not
have a copy of
this law suit,
filed by the City of San Diego on November 30, 2005,
it’s bond counsel, Orrick, Herrington & Sutcliffe
of "significant roles in creating and covering up
financial irregularities." (I posted it on my
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
"reporters generally don’t dig deep enough". Does
that include bloggers? Scott, get ready for San Diego's
own "Big Dig".
and Murphy must stop Aguirre or they go to jail -
by Pat Flannery
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'
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
On page 13, line 22
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?
18, 2005 Peters gave an interview to
of The Voice
complaining about the fact that
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
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.
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
Why? Because Aguirre has identified Murphy and Peters as
the most culpable in hiding the pension deficit from
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
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.
6 hrs 20 mins
in. Stay for the exchange between Peters and Aguirre.
Peters claims that he is acting in his official capacity
as current Council President - then he is the one who
needs authorization, not Aguirre.
Kittle seen the Kroll report? -
by Pat Flannery
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
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.
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
Whatever is going on Kittle and the
U-T is playing to win. God help who gets in their way.
real estate sky is not falling -
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
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
Do 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.
Madaffer "fix it" machine is in full swing this week -
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.
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.
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
The City of San Diego Ethics Commission
to Toni Atkins on February 21, 2006. But that was months
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.
is not an unbiased reporter -
by Pat Flannery
"Bowtie" Bob Kittle and his U-T
editorial board came out fighting this morning. They say
must not count on benefit rollback"
attack on audit panel harms city".
With regard to the first: who ever said the city should
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
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.
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
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.
are stubborn things -
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
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!
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
normal with the U-T in charge -
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
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
Obviously he got a nasty-gram from
Kittle and buckled. He wimped out! What a shame.
finally have some outrage -
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
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 -
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?
for jury duty? -
by Pat Flannery
problem at City Hall is that there are too many damn
lawyers and not enough politicians.
Paragraph 24 of the California Association of Realtors
"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
you are protected from the costly litigation the city
must now endure.
Judge Barton today
"Based on the totality of the
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
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 -
by Pat Flannery
The quality of life in
San Diego took what may well be a fatal blow today.
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
on June 25th
Scroll down, it's the sixth letter in
the letters column.
Did he not say
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
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
But it was
Daniel Strumpf at City Beat who first got
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
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
last year. How about it Doug?
Malcolm Magic -
by Pat Flannery
Read Matt Potter's June 26,
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
(page 3 line 29) that got him completely off the hook -
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
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
Matt Potter: "Malcolm and Nathanson
(a fellow member of the state coastal commission)
voted consistently in favor of developments favored by
(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".
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
a judgment in the pension case -
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.
went along to hear the arguments for myself. Here is
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
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
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.
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.
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
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.
Copyright "San Diego Today"
November, 2004 -