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Blog Archives - 2008 Second Quarter


Kittle's irrational hatred of Aguirre has got to stop.

                                         by Pat Flannery                           top^

Bob Kittle wrote this editorial in the U-T on Monday June 23, 2008 regarding the $10.5 million recovered by Mike Aguirre in four malpractice suits.  Nevertheless Kittle complained in his editorial:
"Had the City Attorney's Office handled the settlement negotiations itself, taxpayers would have collected the $3.1 million that was paid to the lawyers."

If Mike Aguirre had invented a cure for cancer Bob Kittle and the U-T would complain that he hadn't done it sooner. So I checked with Aguirre's Second-in-Command, Don McGrath to find out the truth.

McGrath told me that he had worked hands-on supervising these two fine attorneys, Bryan Vess and Dan Stanford, attending almost every court hearing and mediation. He told me that he had kept the City Council fully informed throughout the long and difficult legal process.

McGrath gave me an on-camera interview in his office on Friday, June 20, 2008. Click on the photo to see the video. McGrath anticipated that Kittle would do exactly what he did - slam him for recovering $7,166,458 for the City.

"This money has been paid over to Jay Goldstone and the City Treasurer for payment of other legal bills, pension deficit and any other City debt Mr. Goldstone and his department choose to retire." said McGrath. Not a word of thanks from Mayor Sanders or his joined-at-the-hip Aguirre-hating spokespersons, Bob Kittle and Fred Sainz.

Here is a letter to the editor published in today's U-T from one of the outside attorneys involved in the recovery, Dan Stanford. It says it all - with a little sarcasm - thanking Kittle "for staying positive".

"The view from a contingency attorney

Regarding “Regarding “Malpractice deals/Taxpayers lose a third to contingency lawyers” (Editorial, June 23):

No good deed goes unpunished. Thank you for your editorial congratulating fellow attorney Bryan Vess and me on our recent litigation successes that add over $7 million to the city's general fund. In times of such economic drought, it is good to see you focus on these positive results and the fact that the glass is two-thirds full.

These were difficult cases that required specialized expertise in professional malpractice, plus a track record and reputation in the field, which is not expected to be found in any city attorney's office. Not only did we agree to handle these risky cases, but we reduced our normal contingency fee and advanced all costs on behalf of our city.

The results demonstrate our experience and reputation, as well as our willingness to fight major, national law firms that hired multiple, major national defense attorneys. They billed and collected more than we have been paid.

Your thanks and gratitude for generating positive results in excess of $7 million is greatly appreciated, and it makes all the long hours of hard work and lost sleep over unsure outcomes and costs advanced worthwhile. Besides, we can only imagine the editorial you had in mind if the lawyers hired by the City Council had lost these cases and billed the city millions of dollars by the hour! Thanks for staying positive – and for your support!

San Diego"

The cases involved were: Callan Associates and Gabriel Roeder Smith, $4,500,000 recovered, Caporicci & Larson, $900,000 recovered, Calderon, Jaham & Osborn $750,000 recovered, Vinson & Elkins $4,350,000 recovered, for a total of $10,500,000 recovered.

The outside attorneys took $3,133,333 plus $200,208, that left a net gain to the City of $7,166,458.
McGrath explained on Friday:

"I initially hired Heller Ehrman on an hourly basis, but received a very strong message that the City Council would not support hourly legal fees. Therefore, I presented the idea of a contingent fee arrangement to the City Council, which was agreed to in all instances unanimously by them."

There are pending cases against bond counsel Orrick, Herrington & Sutcliffe and Kroll attorneys Willkie Farr that could net the City tens of millions of dollars. No dount Kittle will complain about them too.

In a paroxysm of nastiness Kittle threw this piece into his editorial:
"As part of its wide-ranging investigation of Aguirre, the State Bar of California has subpoenaed city billing records of payments made to Vess and Stanford, and investigators have interviewed Vess. But the purpose of the bar probe is unclear."

What is he inferring? Besides, the State Bar does not divulge information on ongoing investigations. Either Kittle is lying or the State Bar has broken its own rules. Surely the former. There is no end to Kittle's hatred. It is abnormal. It is unnatural. And it must stop.

This State Bar investigation was instigated by Scott Peters who ran against Aguirre for City Attorney. Kittle rails against the city unions and their pension benefits but has done everything he can to help
Peters preserve their bloated pensions. What is in the water down there in Mission Valley that feeds the insane hatred that pours out of Bob Kittle and Chris Reed for Mike Aguirre? Whatever it is, it is irrational, it is evil, it is destructive and very, very bad for San Diego. End it. Please!


The Francis team unwinds after the election. 06/24/08

                                         by Pat Flannery                           top^

I did this post-election on-camera interview with Charles Gallagher, Steve Francis's campaign manager, on Monday afternoon, June 22, 2008. Click on the photo for the video.

I got a little "blind" sided by the window coverings. It seemed during the shoot that there would not be a backlighting problem, but there was. My apologies for the image quality, but the campaign insight makes the video worth watching.

Mr. Gallagher is a very likeable politico and would have been a refreshing change at City Hall. He loves to talk politics, without the slightest hint of ill will towards his opponents. He loves it all.

He had just returned from Rome where his sister is the Vatican correspondent for CNN. He told me he had been at the Vatican the same time as Tim Russert, just days before Tim's tragic death. I could not help being reminded of Tim as I watched Charles. He has the same twinkle in his eye. Like Tim, you could not help but like the guy.

I have a feeling we will be seeing more of Mr. Charles Gallagher. Perhaps I will get an interview with his boss Mr. Francis when Steve and his lovely wife Gayle return from a vacation celebrating their 25th wedding anniversary. Happy anniversary Steve and Gayle.

Is there corruption in the Grant Thornton contract? 06/22/08

                                         by Pat Flannery                           top^

The privatization of "inherently governmental functions" through a Federal process known as OMB A-76 (an OMB circular) was brought into serious question in a special report published February 2007 by the Washington Post. It documented the appalling conditions at the Walter Reed Army Medical Center (WRAMC), the so-called "Home of Warrior Care". The report ended with this paragraph:
"In December, a contracting dispute held up building repairs.

"I hate it," said Romero, who stays in his room all day. "There are cockroaches. The elevator doesn't work. The garage door doesn't work. Sometimes there's no heat, no water. . . . I told my platoon sergeant I want to leave. I told the town hall meeting. I talked to the doctors and medical staff. They just said you kind of got to get used to the outside world. . . . My platoon sergeant said, 'Suck it up!' "

"Suck it Up!" I expect that will be Mayor Sanders' suggestion to the City unions on Monday when this Item comes up for Council approval. Sanders has signed a contract with the Bush Administration's favorite defense privatization consultant, Grant Thornton LLP (who participated in the Walter Reed privatization fiasco) for
"indefinite delivery, indefinite quantity" privatization services.

The Grant Thornton person in charge of the San Diego account is Mr. Ramon Contreras, Principal, Grant Thornton LLP, 333 John Carlyle Street, Ste 500, Alexandria, VA 22314.
It is interesting that Contreras appears on the "Defense and Intelligence" page of Grant Thornton's web site. Here is his resume.

Note that Contreras also happens to be a presenter on "Strategic Sourcing" for Carl DeMaio's Performance Institute. Isn't that interesting! Is San Diego to be the poster child for the takeover of local government by giant Washington-based private "service providers"?

San Diego already appears as a client on GT's "
State and Local Governments" page. Grant Thornton considers itself under contract to the City. Here is a letter from Lance Wade, the former Purchasing Director, dated April 12, 2007 purportedly confirming that contract.

However, the City Attorney's signature is required on all City Contracts according to this MOL dated February 11, 2008 and more importantly according to Charter Section 40. The Grant Thornton contract did not receive that signature. It still hasn't. Here is the latest signature page.

The first anybody heard about this supposed contract (outside the Mayor's office) was when on April 4, 2008, Mark Patzman, the Program Manager for Managed Competition, requested the City Attorney's office to "expedite review and approve" a 1472 (the form required to put an item on the City Council agenda) to ratify the supposed Grant Thornton contract referred to in Lance Wade's letter dated April 12, 2007.

In response, Deputy City Attorney Michael Calabrese wrote this letter to Mark Patzman on April 8, 2008. Calabrese explained that he could not approve the 1472 to "ratify" the Grant Thornton contract as "the underlying agreement is invalid for several reasons". Therefore "no agreement exists for the City Council to approve, extend or ratify".

Scott Peters nevertheless put it on the Council Agenda for April 28, 2008, only to "send it back to the Mayor" when the day came. Perhaps he decided to wait until after June 3, not wanting to tangle with the unions over Managed Competition during an election.

Now that the election is over Peters no longer needs the unions. He is playing the rich-man's game again, the (now out-of-the-closet) conservative he has always been. So, he has put outsourcing of city jobs back on the Council agenda for Monday June 23, even though the 1472 still does not have the City Attorney's signature.

If Peters was in the runoff with Aguirre he would be playing the unions' game and sending outsourcing of city jobs "back to the Mayor" to die on the vine. He knows that Joan Raymond's blue collar union, AFSCME Local 127 will be wiped out under Managed Competition. Even the all-powerful MEA will take severe hits, which many people support.

The great irony is that the fate of thousands of union jobs is now in the hands of Aguirre. Why should he fight their battles for them? Peters was their champion. Now he's gone. Their current champion, Ben Hueso, is backing the arch-conservative and Mayor's ally, "Judge" Jan Goldsmith (you can't use that honored title to run for any office)?

Will Hueso protest the fact that this item is even on the Council Docket without having received the City Attorney's signature? Probably not. Will Hueso lead the opposition to this obviously illegal contract? Probably not. He will leave the fight to Aguirre. So, Aguirre could be forgiven for letting the unions stew in their own juice on Monday.

The unions have protested Aguirre's "meddling" in policy. This might be a good time for Aguirre to heed their advice. Calabrese's letter makes the law clear. Hueso and the City Council must now decide to follow the law as outlined by Aguirre, or follow the Mayor in disobeying it.

Click on this picture for a video of the Mayor's Business Office Director, Anna Danegger, speaking before the Budget & Finance Committee on September 12, 2007. She was painfully trying to explain away the slow pace of "reform".

I believe it had more to do with the pending 2008 mayoral election than internal work load. Sanders wanted to give the impression to the city unions that he was not over-eager about Managed Competition. Wrong.

Danegger, a former Grant Thornton employee, is married to
David Jarrell, San Diego City's
Deputy Chief Operating Officer for Public Works. They are both politically savvy. This is where it gets interesting.

According to the Staff's Supporting Information to
Monday's Agenda Item: "the managed competition program issued a Request for Proposals (RFP) on October 19, 2006. Four proposals were received and were evaluated separately for technical merit and price. Grant Thornton was evaluated the best value provider and was awarded a one-year contract." That is what Sanders wants the Council to "ratify".

The mayor sent out an RFP for Managed Competition before the voters passed Proposition C on November 7, 2006. There were 185,688 "Yes" votes (60.37%) and 121,906 "No" votes (39.63%). Sanders and the Republican Party spent over $1 million on the campaign.

The deadline for returning the Managed Competition RFP was November 16, 2006. Anna Danegger was still working for Grant Thornton. She did not leave until November 30, 2006 and started with the City the following Monday, December 4, 2006.

We are expected to believe that this political savvy couple did not discuss the managed Competition RFP while Anna was working for Grant Thornton and David was working for the City.

earns $168,002 while Anna earns $117,275 i.e. $285,277 between them. They live in Scripps Ranch and have only a $450,000 mortgage - not bad for government workers. One day they will join the thousands of happy San Diego City retired millionaires.

With the help of the Casey Gwinn-trained and establishment-compliant
Stacey Fulhorst, Executive Director City of San Diego Ethics Commission, Ms. Danegger got around another little ethics problem. I wonder why Stacey did not consider the husband/wife conflict?

Fulhorst's Ethics Commission's rules provide that an employee "may not influence municipal decisions that are substantially likely to have a material financial effect on an entity that has been a source of income to you within the previous twelve months."

However, Fulhorst and the Ethics Commission conveniently found that "any ministerial work (i.e., not requiring you to exercise discretion) you perform on such matters would fall outside the scope of the prohibition." San Diego City is a nice little "Ministerial" family.

The truth is that you can do just about anything in this town if it is found to be "Ministerial". The Blackwater case is a good example. Here is the full letter from the Ethics Commission to Ms. Danegger.

Why then did Sanders sign an "indefinite delivery, indefinite quantity" privatization contract with Ramon Contreras, the Defense Principal at Grant Thornton, who had recently landed a huge $450 million privatization contract with the Department of Justice? Was Sanders "encouraged" to hire a favorite son of Washington, as with Blackwater?

If the City Council rejects this "ministerial" contract tomorrow, I see a repeat performance of the Blackwater case in Judge
Marylin Huff's Federal Courtroom. The Hamiltonian Federalists would be proud of their 21st Century counterparts. Unfortunately for democracy a similar movement is afoot in Europe known as the Treaty of Lisbon.

On June 12, 2008,
Ireland, alone among European nations, stopped the further erosion of their national sovereignty by rejecting the Treaty of Lisbon 53.4% to 46.6%. The erosion of state and local sovereignty is being done in the United States not by treaty but by compliant local politicians like Jerry Sanders and Federal Judges like Marylin Huff.

Let's see what the City Council decide on Monday - democracy vs. "ministerial" - is local government the next big business franchise?


06/19/08 No need for political parties in San Diego any more. It's now Ben & Jerry's Flavor "Imagine Whirled Peace".

                                         by Pat Flannery                           top^

Today, flanked by Andrew Jones, president of the San Diego Deputy City Attorney's Association, Councilmember Ben Hueso, a Democrat representing the largely Hispanic Council District 8, endorsed Jan Goldsmith, a Republican from Coronado, for San Diego City Attorney.

Mr. Hueso was first elected to Council District 8 in November 2005 following the July 2005 conviction of former District 8 Councilmember Ralph Inzunza of extortion, corruption and fraud for taking bribes from a strip club owner.

Hueso took Inzunza's seat on a mere 7,454 votes in the November 2005 general election and was reelected, virtually unopposed, in the following June 2006 primary election with only 7,994 votes. District 8 is notorious for voter apathy. Inzunza was first elected in 2001 with only 4,759 votes and relected in 2002 with 6,103 votes (Imperial Beach-style numbers).

Pardee Construction paid for most of those 6,103 votes in South San Diego and Inzunza paid them back in full measure by killing the expansion of Brown Field. Hueso serves the same developer/unions master. He doesn't have to worry about the people - they don't vote. Pardee will buy him all the votes he needs. That's democracy San Diego-style and the "Democratic" Party does not seem to care.

Now this today - here is the full video of today's bi-partisan, tri-racial love fest , a Democrat (without a voter base) endorsing the establishment's choice for a rubber-stamp City Attorney. I stood in the midday sun to watch this extraordinary press conference in City Plaza: the golden boy of the white power elite flanked by adoring members of the two largest minority groups in San Diego - blacks and Hispanics.

In his glowing endorsement of Goldsmith, Councilmember Hueso said:

"There's no Democratic or Republican way to run the city .... a lot of the issues that we deal with, potholes, graffiti, picking up trash .... we pick up everybody's trash, Democrat's, Republicans, Green Party, Libertarians .... everybody is entitled to equal services in the city. I do my job with that focus. I focus on matters important to all San Diegans' public health and safety and I think the law should be applied that way."

"Judge" Goldsmith picked up the (sukha) happy theme-for-the-day, saying: "There's no Democratic or Republican way to run the City Attorney's office". Casey Gwinn was not  really a Republican - he was a child of the enlightenment not of the establishment. Yeah, right.

But it is now official. Ben Hueso has said so - there is no difference between the way La Jolla is governed and that of Barrio Logan or South East San Diego. Everybody's trash gets picked up, everybody's potholes get fixed; graffiti on the walls of La Jolla is cleaned exactly the same as in South East San Diego.

According to Ben Hueso and Jan Goldsmith we already have Nirvana and social justice in San Diego. Just don't drive around South East San Diego, stay North of 8 and thank God (or Buddha) every day for "enlightened" men like Ben Hueso and Jan Goldsmith.

This "Lotos-eating" thinking has left most of San Diego south of Interstate 8 a wasteland of neglect. The bulk of the city's resources are sucked into downtown and the affluent north. With establishment-serving Council representatives like Ben Hueso who can be surprised?

Will the Democratic Party protest this latest sellout? I doubt it. It has become totally dominated by the all-powerful developer/unions coalition. All they need for total developer/union Nirvana is to get rid of Aguirre.


City Attorney Mike Aguirre will appeal Blackwater. 06/16/08

                                         by Pat Flannery                           top^

I sat through two hours of argument between City Attorney Mike Aguirre and Judge Marylin Huff in Federal Court today. Blackwater's attorney Mike Neil hardly spoke. He didn't need to, Judge Huff argued his case for him.

Judge Huff went at it with Mr. Aguirre as if she were guest hosting the Roger Hedgecock show. She then read her decision, which drew heavily on City Auditor Eduardo Luna's "exhaustive investigation" (as she described it) into the Blackwater permits.

I counted over 30 references to Mr. Luna's report. I'm sure nobody was more surprised than Eduardo. I doubt he could find the Land Use Section in the Municipal Code let alone write such an erudite exposition of land use processes that so impressed Judge Huff today.

I talked with City Attorney Mike Aguirre outside the Federal Courthouse afterwards when he gave me this on-camera interview , in which he announced that he will appeal today's decision:

"The City has an absolute right, through the City Council, to review whether or not a war training facility can be put in the middle of what is otherwise an industrial-business park and that there is a fundamental constitutional issue that has to be resolved by the Court of Appeals, 9th Circuit and we will be taking an appeal at the earliest opportunity."
Here is what Ray Lutz (the man who has led the opposition to Blackwater's presence in San Diego County) had to say about Judge Huff's decision outside the Courthouse:

"This was pretty much a predetermined result".

Here is a more extensive interview with Mr. Lutz prior to going into court where he delves into the background of Blackwater and into Judge Huff's close ties to the Bush Administration. His views raise serious questions regarding the state of the "separation of powers" in America today. How much loyalty does a Federal Judge owe to the Executive authority that appoints them? It was very clear where Judge Huff's loyalty lay today.

I hope to obtain a complete transcript of today's proceedings in the near future when I will post it here. I think every San Diego citizen should read her spirited, unjudgely, prolonged verbal exchange with Mr. Aguirre today. It was a chilling lesson in reality civics. Unfortunately no cameras or recording equipment are allowed in her courtroom.

Judge Huff actually said that yes, occasionally, a city is allowed to exercise "discretion" in its land use decisions, all others, 40,000 per year in the case of San Diego, are "ministerial". The military/business/law enforcement power structure that now governs San Diego is taking its "reform" seriously. It wants all government decisions to be "ministerial", just like in the military.

The irony is that the Blackwater case is being billed as protecting the constitutional rights of a military contractor. A couple of interesting items were revealed today: (a) all the staff at Blackwater are ex-military (who know how to shoot and can take care of themselves according to General Neil) except for two, who are retired San Diego cops and (b) General Neil is also the attorney for San Diego's biggest film studio, Stu Segall Productions, that happens to operate a "hyper-realistic training" facility, Strategic Operations, within the San Diego city limits.

To get a better idea of what Stu Segall and General Neil have on offer in Kearny Mesa take a look at their brochure. How did that particular
"war training facility" get put in the middle of "what is otherwise an industrial-business park"? Obviously, it occured before Aguirre's term in office and without any "discretionary" review by the City Council

It puts today's court proceedings in context: the military-industrial-law-enforcement power complex prefers to obtain its entitlements "ministerially". And their "ministerially" appointed judges make sure they do not have to face any "discretionary" review. Well done Judge Huff.



Sanders' "critical priorities" are developers. 06/16/08

                                         by Pat Flannery                           top^

Watch Sanders' rationale for his line-item veto of the City Council's directive to restore 62 mainly Park & Rec and Library jobs, representing $4.3 million in the City's FY 09 Budget. Read Sanders' press release today outlining his "critical priorities". He says:

"I disagree fundamentally with the IBA’s recommendations and City Council’s changes to my Fiscal Year 2009 Budget."

This is the "reform" San Diegans voted for. Sanders' legacy will be privatized city services, meaning no city services. If you want parks go live in a gated community; public parks are city assets to be leased for city revenue. That's the message from the 54% who voted for Sanders.

Look again at the Grand Jury Report on CCDC. On page 4 it says:

"CCDC’s budget for the Fiscal Year 2007/2008 is $217.5 million of the funds belonging to the Redevelopment Agency."

On page 7 it says:

"Fact: The Redevelopment Agency owes the City approximately $250 million in loan repayments."

Now consider Sanders'
"critical priorities". The pension system charges the City 8% on its Unfunded Actuarial Liability, (approximately $90 million per annum depending on whose UAL numbers you use. The pension administrators use all kinds of actuarial tricks to minimize it).

Why does the City not charge the Redevelopment Agency (RDA) 8% on the $250 million it owes the City? 8% of $250 million is $20 million. The answer lies in Sanders'
"critical priorities".

"critical priorities" are to the development industry. In order to avoid collecting even $2.5 million of that $20 million interest he vetoed the Council's effort to save our parks. Sanders prefers to leave the money with the RDA - to subsidize his contributors' projects.

Developers are Sanders'
"critical priorities", not the citizens of San Diego. He will have an ideological ally on the City Council, Carl DeMaio. DeMaio modeled his Performance Institute on the Reason Foundation. Both organizations are dedicated to the privatization of government under the false banner of "reform". San Diego is to become DeMaio's privatization laboratory and we his guinea pigs.

Progressive San Diego holds "Election Reflection" forum. 06/11/08

                                         by Pat Flannery                           top^

Progressive San Diego held an "Election Reflection" panel discussion tonight. Here is the full video .

By far the most interesting comments came from Lorena Gonzalez regarding the Frye/DeMaio bonding. She does not approve. However, Donna stuck to her guns. She likes DeMaio. It will be interesting to see how that plays out between now and the November election.

Several of the runoff candidates were there including Mike Aguirre, City Council candidates Sherri Lightner, Stephen Whitburn and Todd Gloria together with Marty Block candidate for the 78th State Assembly District. It provided a pleasant relaxed atmosphere for candidates and  media to mix with an enthusiastic group of political activists and discuss the post election state of play over a glass of wine and finger food.

Many thanks to
the folks at Progressive San Diego, Tommie Watson, Cory Briggs and others, for getting us all together for a very interesting evening. It was refreshing to be able to have a constructive discussion of city affairs without the ever-present heavy-handed city unions and their surrogates dominating the proceedings. The defeat of Scott Peters seems to have brought some balance back to civic affairs.

Watch the video, it's very informative.


Donna Frye is hedging her bets. 06/09/08

                                         by Pat Flannery                           top^

As I wrote on June 4, 2008 we needed to know when the absentee voters voted. So I went over to the County Registrar of Voters and got the figures. Here are the raw absentee numbers and a timeline graph:

                                   Dates Absentee Votes Counted

Here are the vote numbers as they came in on election night. The graphs below show the accumulated votes as the count continued. The first result came from the 227,207 absentee vote count released at 8:00 PM on Tuesday night. As the non-absentee votes were added  throughout the night and even after a further 53,182 absentee votes were added on the 4th and 5th June, the vote share hardly changed.

That tells me that the voters made up their minds fairly consistently over a voting period of almost a month. Therefore the factors that determined the outcome of the Mayor and City Attorney races are deep-seated.

The various runoff candidates will need to come to a full understanding of those deep-seated factors over the next five months. It seems to me that the relative strength of the two political parties is the main factor. The Republicans are well organized, well led and well financed. The Party was decisive for Republican candidates, even for Carl DeMaio. Mayor Sanders hardly had a campaign outside the Republican Party.

The Democrats on the other hand are poorly organized, poorly led and poorly financed. The traditional core of the Democrat Party, the Labor Council, has lurched to the right. It is now locked in the embrace of the City unions who, with the exception of AFSCME Local 127, are largely Republican e.g. Ron Saathoff (the real Fire Chief). Labor Council leader Lorena Gonzalez recently told a reporter that the Labor Council might endorse a Republican, Jan Goldsmith, for City Attorney.

Where would that leave the Democratic Party? That fact that she could even think such a thing means that either the Labor Council or the Democratic Party has lost its way. Goldsmith is the antithesis of labor. Gonzalez

To add to the Democratic Party's woes Donna Frye today announced an alliance with Councilmember-elect Carl DeMaio, an arch-Republican. I went to their joint press conference today and hung on every word. Here is the full video .

DeMaio is a man in a hurry for higher office. He wants it all. He will use Frye to slingshot himself into an immediate key position on the City Council. The arrangement happens to suit Frye right now.

Frye may be hedging her bets against a mixed City Council result in November. In order to be Council President she will have to stress her non-partisanship. Today was a good start. It was interesting that Phil Thalheimer turned up in the 13th Floor press room for today's press conference. He and DeMaio obviously had a thing going. Carl looked in his direction each time he mentioned new Councilmembers. Thalheimer is in a November runoff with Democrat Sherri Lightner for District 1.

It may be left to City Attorney Mike Aguirre to rally the Democratic Party (sans the city unions) in San Diego. And he will have to do it without the Labor Council and without Donna Frye (who is now officially non-partisan). The candidacies of Sherri Lightner, Marti Emerald and Stephen Whitburn may depend upon such a rally. Otherwise it will be Republican Phill Thalheimer in District 1, Republican April Boling in District 7 and DINO (Democrat in name only) Todd Gloria in District 3, joining District 5's Carl DeMaio in November for a Republican wipeout.

It could happen. The voters soundly rejected the city unions when they soundly rejected Scott Peters on June 3, 2008. They will do the same in November to any Democratic candidate remotely connected to city unions. At least on that score Aguirre scores very high. It may yet be his trump card, especially if Police and Fire endorse Goldsmith.

To avoid a total takeover of city government by private interests represented by the Republican Party, the Democratic Party will have to awaken from its slumber. If Democrats want to protect city services from marauding privateers they must believe in "yes, we can". Attitude towards city services is the essential difference between the parties.

If Barack Obama turns out voters in Bobbie Kennedy-style numbers and if Mike Aguirre can explain to the public what "yes, we can" means to city services in San Diego, maybe we have a chance to salvage some democracy in San Diego. Right now we are looking more and more like a dictatorship of business interests that own law enforcement.

In the meantime Donna Frye is hedging her bets.

City Attorney race - the result. 06/04/08

                                         by Pat Flannery                           top^

There is something very strange about that 32% spike for Goldsmith. Either the voter count was wrong or the SurveyUSA polls were wrong.

Here are graphs of the breakdown. The SurveyUSA polls make statistical sense, the count does not. It defies the laws of statistics.

"Undecideds" are always more evenly distributed among the candidates. Sudden swings like Goldsmith's just do not happen. Nobody picks up all the "undecideds".

A voter swing from 21% to 32% in a few days does not happen - ever. "Something is rotten in the State of Denmark" (Hamlet: Act I, Scene 4, Marcellus).

And: "There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy."
(Hamlet: Act I, Scene 5, Hamlet).

Either strange ghosts walk the electoral battlements of San Diego or we have to reinvent our polling techniques. Hopefully the later. If 57% had already voted (absentee), how could there be 10% "undecideds" only a few days before the election? It's a statistical impossibility.

Those SurveyUSA polls picked up too many "undecideds" and misled a lot of campaign managers. We need more accurate polls in November. We also need more analysis of the absentee vote by the Registrar of Voters. We need to know when those people voted (in addition to who they are, which the Registrar of Voters already covers pretty well).

Perhaps many of them just hung up on SurveyUSA who then marked them down as "undecideds", when in fact they had already voted.

Mayoral race - the result. 06/04/08

                                         by Pat Flannery                           top^

Well, it's over. Four more years of Sanders - the giveaways continue.

Mike Aguirre flies into town from his daughter's graduation at Princeton N.J. and will hold a press conference in Balboa Park at 5:00 P.M. when he will comment on the election results. I hope he will make it a call to arms to all those, like myself, who fear a general takeover of the City's assets by the developer and business interests that reelected Sanders.

Balboa Park is the perfect place for Mike to call on the people to finally come together to protect what's left of our city's civic heritage.

"The pueblo lands have been like a dowry for San Diego, enabling her to attract significant suitors such as military installations, educational and research institutions, business, industrial, and residential development, all of which have diversified and enhanced the general economy."

That is a quote from a paper entitled "The Pueblo Lands: San Diego's Hispanic Heritage" written by Clare B. Crane,  winner of the San Diego Historical Society Institute of History's Judge Jacob Weinberger Award for Legal History in 1991.

San Diego is the "Plymouth Rock of the Pacific" in that it was the first permanent Spanish settlement in Alta California. As it progressed from a Spanish pueblo to an American city, San Diego received title to 47,323 acres of land, more than any other city in the United States.

What has happened to that public land? It has been the subject of endless giveaways from April, 1874, when San Diego finally received a U.S. patent for those beautiful 47,323  acres.

Those pueblo lands were surrounded by three large private Mexican land grants, whose titles were also recognized by the United States. To the North, Rancho Penasquitos, to the South, Rancho de la Nacion and to the East, the ex-Mission of San Diego. Emulating those private landholders, the City of San Diego began selling off large parcels to subdividers like Alonzo Horton. Balboa Park is the last remaing.

To me, it doesn't matter who got elected yesterday or who paid for their election, they still work for us. The people still own this city and will fight the giveways. A good place to begin holding the line is Balboa Park. Yesterday's low voter turnout should be a wakeup call to those who slept through the last round of giveaways. If they sleep through the next four years of Sanders they may as well stay asleep: there will be precious little left of San Diego's priceless dowry - 47,323 acres of public land.

Mayoral race - latest poll. 06/03/08

                                         by Pat Flannery                           top^

Here is the latest SurveyUSA poll for the San Diego mayoral race.

Here are my graphs of the breakdown. There is still 11% undecided.

That is a large undecided at this late stage. It must be worrying for Sanders. He still needs another 5% and he may have already got all the undecided's he is going to get. They tend to be unhappy with incumbents, that is why they are undecided. They just can't make up their mind about the challengers.

Bidwell and Morrow seem to be having a late rally and that will help Francis who will undoubtedly get his share. So it will be a squeeker.

We will have a good idea of the result shortly after 8:00 PM when the absentee count is announced. There are no undecideds in an actual vote count. If Sanders shows more than 50% at that time he will probably win. If not, it could be late night before we know the outcome.

Today's Grand Jury Report on CCDC puts Sanders $5 million "contribution" in perspective. 06/02/08

                                         by Pat Flannery                           top^

The Grand Jury's Report on CCDC was released this morning. Its most significant statement is on page 7:

"Approximately $250 million of this debt are loans repayable to the City of San Diego; the balance is primarily debt service on bond issues" .

anders wrote in this "Fact Sheet" released April 8, 2008:

"MAYOR INCLUDES BOND REPAYMENT FROM CCDC IN FY09 BUDGET. As part of his effort to appropriately allocate costs throughout the City system, Mayor Sanders is including a $5 million contribution to the PETCO Park debt service costs from the Centre City Development Corporation in the FY09 budget. The contribution comes after months of discussions and is the first of what will be annual contributions designed to reduce the City’s costs for this obligation. Total debt service costs for PETCO Park are $11.3 million annually. CCDC’s contribution to meeting those costs is expected to grow in coming years."

In its Report today the Grand Jury points out that:

"This is about 2% of what the Redevelopment Agency owes the City."

The Grand Jury then concludes that:

"Since the Redevelopment Agency’s debt exceeds tax increment revenue by over $550 million, repayment of loans to the City should not jeopardize the Agency’s ability to continue collecting tax increment revenue." 

So, all this time, while the City staggered through a giant financial crisis, CCDC was allowed to sit on a mountain of cash, $250 million, belonging to the people of this City. Potholes went unfixed while CCDC "co-invested" hundreds of millions of dollars with favored developers.

Jerry Sanders then tried to cover it all up by issuing a fatuous "Fact Sheet":

As part of his effort to appropriately allocate costs throughout the City system" and "after months of discussions" he manages to squeeze the $5 million out of the developer-packed CCDC Board.

Here is a summary of the Grand Jury's findings:


The 2007-2008 San Diego County Grand Jury recommends that the San Diego City Council, acting as the City of San Diego Redevelopment Agency:

08-116: Establish a dollar threshold over which any sole source contract, especially for consultant services and legal services, would have to come before the Agency for justification and approval

08-117: Take steps to insure the timely submission of the Fiscal Year 2007/2008 Redevelopment Agency Annual Financial Report, and all such future reports, to the Office of the State Controller as required by law.

08-118: Direct staff of the three component entities of the Redevelopment Agency to compile a grid, broken down by project area, which would list all monies owed to the City of San Diego, the date the debt was incurred, the fund from which the monies were borrowed and a realistic timetable for repayment

08-119: Identify the true funding mechanism for every approved project at the time of approval.

08-120: Notify the Centre City Development Corporation to identify the true funding mechanism for every project it publicizes or in which it is otherwise involved.

08-121: Direct City Redevelopment Division staff now working on reorganizing the City’s component of the Redevelopment Agency to take the additional step of preparing a plan to consolidate all three existing components under one administrative structure. "

Yes, it's time for a change, REAL change.


The absentee vote count will herald citywide results early. 05/31/08

                                         by Pat Flannery                           top^

According to the County Registrar of Voters' web site there are currently 593,445 people registered to vote in the city of San Diego, 40% Democrats, 31% Republicans and 29% "other".

                Registered Voters in San Diego

Approximately 33% of those are Permanent Absentee Voters (195,837). 40% are Democrats, 37% Republicans and 23% "other". Traditionally slightly more Republicans register absentee than do Democrats and slightly fewer "other" vote absentee.

               Registered Absentee Voters in San Diego

These ratios will become important soon after 8:00 PM on Tuesday, when the Registrar of Voters will release the count of absentee ballots.

For simplicity let's assume that the final absentee vote will be 40% Democrat, 40% Republican and 20% "other". No party correction will therefore be necessary and early absentee polls will be strongly indicative of the final outcome, especially in the two citywide races (individual City Council Districts may have different absentee ratios).

Low turnout will be a strong factor. Get out the vote (GOTV) efforts are crucial in all elections, but especially so in low turnout elections. Local candidates with grass-roots organizations traditionally do better with GOTV. It is more difficult to do good GOTV in citywide campaigns.

Neither Steve Francis nor Jerry Sanders has anything close to the GOTV organization Donna Frye had in place in 2004 and 2005, with support from the Labor Council of course. It will be Scott Peters who will benefit this time from that support. The Labor Council and city employee unions will mount a massive last minute GOTV phone and email campaign for him. He is their pension champion.

The firefighters will be particularly active on his behalf. He helped get them their lucrative city pensions and he has promised to preserve those benefits at all costs. $900 million is riding on his candidacy.

State rights, city rights, citizen rights are what a U.S. court says they are - Blackwater's financial interests prevail. 05/30/08

                                         by Pat Flannery                           top^

I sat in Judge Marylin Huff's U.S. courtroom this afternoon and listened to two Irishmen argue this important case. Mike Neil argued on behalf of Blackwater and Don McGrath argued on behalf of the City. McGrath apologized for his lowly status as a mere (Army) lieutenant going up against a (Marine) general. Everybody including the Judge laughed.

But this was serious stuff. Neil and McGrath knew it. McGrath said he could care less who Blackwater is, how many generals they know or what they have done for their country. This was about a city's right to make land use decisions according to its own local Municipal Code.

It smacks of political big wigs in Washington using a city with a friendly Mayor, San Diego, to reward Blackwater for services rendered elsewhere.

I was dismayed to hear a United States Judge read our Municipal Code to our City Attorney and tell him how to apply it. City Attorney McGrath argued that the City's Director of Development Services Department, Kelly Broughton, has the right to decide what permits are "ministerial" and what are "discretionary" in our city.

McGrath argued that the Federal Government cannot usurp that right. Not so, said the Judge. The U.S. Courts have superior jurisdiction over our Land Use Code (at least when a favored military contractor is involved). Would an ordinary citizen in Clairemont for example get the same U.S. protection over a swimming pool permit? Of course not. The Federal Court would say it did not have jurisdiction, which it doesn't.

As I listened to General Neil go on about the "fine men and women of the U.S. Military" I wondered what kind of America he thought they were fighting for. I doubt those fine young people see themselves fighting for a U.S. Government that holds the financial interests of Halliburton and Blackwater above the rights of local citizens.

Judge Huff was so eager to grant Blackwater its Temporary Restraining Order (TRO), ordering this City's Development Services Director to grant a "use" permit to Blackwater without a clear definition of what that "use" might be. I found that profoundly disturbing. After virtually arguing Blackwater's case for them Judge Huff then said she would not issue her ruling until Tuesday, the day of the election! Did Mayor Sanders ask for that one small little favor in return?

It was disturbing that Blackwater's attorney Mike Neil played a tape in court of Jerry Sanders on the Hedgecock show yesterday. It was so staged - Sanders seemed to know exactly what the judge would rule.

It will be interesting to see what City Attorney Aguirre will do now. Will he allow the military, through the U.S. courts, to tell this City how to process its permits? My guess is that Aguirre will fight. It's a matter of State, City and citizen rights. Blackwater should be treated like every other permit applicant. We don't need generals in the courtroom.

This is not what young Marines like Mike Neil and Don McGrath fought for in Vietnam and elsewhere. Like many retired generals and admirals Mike Neil has become part of the giant corporate welfare system that President Eisenhower warned us about - the military-industrial complex.

05/30/08 A Mayor-appointed City Auditor would close the doors of City Hall to the people, further alienating them.

                                          by Pat Flannery                           top^

This document speaks for itself. The City Auditor should be elected by the people just as the City Attorney. Can you imagine where we would be right now if the procedure being proposed for appointing the City Auditor applied to the City Attorney? Total control by the few!

“The cure for the ills of democracy is more democracy” said Al Smith four times governor of New York State and Democratic Presidential candidate in 1928. He lost to Herbert Hoover who went on to preside over the Stock Market Crash of 1929 and the Great Depression that reached bottom in 1933.

The cause of the Great Depression was a crisis of confidence. It was brought on by the exclusion of ordinary people from the decision-making process. They came to distrust the Wall Street bankers who controlled the government. People started to withdraw their savings from banks because they felt their money was being loaned to well-connected speculators. 9,000 banks failed during the 1930's.

We have a similar crisis of confidence in San Diego today. Our taxes are being used by the well-connected to amass fortunes without risking their own money, under the guise of "redevelopment". These "in" people are given free public land: NTC (McMillan), the Marina District (Manchester) and "development rights" in East Village (Moores).

The cure for the ills of San Diego is more democracy. The U-T and the entrenched power elite believe the opposite. In the 1930s some countries became dictatorships e.g. Germany and Italy. Those that remained democracies won out, but only after a great struggle.

Prop C is a serious test for democracy in San Diego. There has been a noticeable trend towards dictatorship in this city. This Mayor has surrounded himself with political "operatiks". A Mayor-appointed City Auditor would further close the doors of City Hall to the people. An elected City Auditor, as applies in the five largest cities in America, would begin to reestablish the people's confidence in their government.

Was Backwater one "ministerial" permit too many? 05/29/08

                                           by Pat Flannery                           top^

Here is an Order from United States District Judge Marylin Huff setting a hearing for tomorrow, May 30, 2008 at 1:30 p.m. in U.S. Courtroom 13, where she will hear Blackwater's plea for injunctive relief in the matter of permitting an anti-terrorist training facility in an existing warehouse in Otay Mesa.

Here is the City Attorney's response together with this document showing that the anti-terrorist course in question is taught to the U.S. Navy by entities all over the world including San Diego City College.

Here is the Declaration of the City's Chief Building Officer, Afsaneh Ahmadi. On page 10 somebody wrote "storage of ammo" on the City's project tracking sheet. Did Afsaneh Ahmadi or her boss DSD Director, Kelly Broughton, know in February 2008 or even September 2007 who the real applicant was?

On page 14 of its complaint Blackwater states: "No effort was made to conceal Blackwater's management or control over the Otay Mesa facility. Every City staff member must have known they were dealing with Blackwater employees."

It is hard to believe that City employees did not hustle these permits through as "ministerial" at the request of their boss, Jerry Sanders. After all Jerry, through his Willows Creek Partners, LLC (although temporarily inactive), is in the same business as Blackwater.

But somebody at Blackwater blew the whistle to
Raymond Lutz of Citizens' Oversight, who in turn informed Bob Filner. Filner promptly wrote a letter to Jerry Sanders. Sanders promised an "investigation" by COO Jay Goldstone, to be completed by May 23, 2008. Nothing happened. The Goldstone "investigation" was never carried out. Did Goldstone tell Sanders whatever the previous COO, Ronne Froman, told him when asked to do a similar "investigation" into Sunroad?

It took a Memorandum of Law from City Attorney Mike Aguirre on May 16, 2008 to force the Mayor to act. On May 19, 2008 Kelly Broughton, Director of Development Services wrote the CEO of Blackwater informing him that the City would not be issuing a certificate of occupancy. That brought the Blackwater lawsuit. Blackwater was discovering, as Sunroad did, that Uncle Jerry can't always deliver.

Whatever happens tomorrow in Judge Marylin Huff's courtroom, it will not be good for Sanders. If Blackwater prevails over the pleadings of the City Attorney, it will be because the Judge will rule that Sanders' staff knew all along that Blackwater was the real applicant. If Blackwater fails, they will go after Sanders for failing them.

He escaped the Sunroad debacle intact by firing Marcela Escobar-Eck, Director of Development Services at that time, and also firing her boss Jim Waring. Although they got the blame, there is no doubt that these two were simply doing what they were told by Sanders. Broughton and Ahmadi may not be so easy. They are forewarned.

Nor may Blackwater be so ready to forgive and forget. If it spent hundreds of thousands of dollars on Sanders' word that permits would be no problem, it will be less than happy. Why else would a hardened company like Blackwater forge ahead without obtaining the "change of use permit" Sanders now claims they should have applied for?

It will be interesting to watch the body language of Blackwater's people in Courtroom 13 tomorrow. It will also be interesting to see how far
Broughton and Ahmadi are willing to stick their necks out to save their boss, Jerry Sanders. Blackwater is no Sunroad.

Broken promises to taxpayers are one thing but, broken promises to people who run the kind of "vocational training" facilities Blackwater does is a whole different ballgame.



Did Blackwater buy their "vocational school" permit? 05/27/08

                                           by Pat Flannery                           top^

Did Mayor Sanders grease the wheels for a valuable Blackwater contract with the Navy at Otay Mesa? According to this lawsuit filed by Blackwater against the City of San Diego the value of that contract is $400 million (page 5). That would buy a lot of favors. Does Jerry Sanders still have links with Blackwater through Willows Creek Partners, LLC, a homeland security firm with which he was associated?

Raymond Lutz of Citizens' Oversight seems to think so:

"At this point, we believe it is in the public's best interest if the inquiry is expanded to include the inaction of Mayor Sanders who delayed the stop-work order for three weeks so that Blackwater could complete their facility, have it inspected and approved by the GSA and then land an extended contract for paramilitary training in the facility.

This seems like a re-run of the Sunroad project, where the developer completed the top floor of the office building in violation of FAA height limits before any action was taken on the project, making it all the more difficult to reverse course."

Here is Mr. Lutz explaining it all on YouTube and Bob Filner backing him up. If training the Navy in "basic arrest and apprehension techniques" is vocational training then just about any training the military does is vocational training.

What emerges from reading the Blackwater lawsuit and the City Attorney's memorandum that prompted it, is that the Mayor's staff eagerly bought into the "vocational school" fantasy. They can't be that dumb. Did Sanders instruct them to give Blackwater everything it wanted? $400 million will buy a lot of influence.

If securing that $400 million contract required political grease, then Blackwater came to the right city. Our Development Services Department is an Enterprise Fund. Under Sanders the entire city is an Enterprise Fund. Here are the Late Contributions in favor of Prop. C.

Why is a Mayor-appointed auditor so important to these contributors? What do they know that we do not? Why are they so eager to write such large checks to secure a Mayor-appointed auditor? Because they can't risk another Aguirre. They can't risk an outsider getting access to the books. They have been robbing the till for years.

The Mayoral Race. 05/26/08

                                           by Pat Flannery                           top^

Which way will the "undecideds" break in the mayoral race? According to the latest poll below, 15% of the electorate has yet to make up its mind. Has Steve Francis done enough to educate that 15% of San Diegans that a powerful cadre of developers want Sanders elected so he can to give away as much as possible to them? McMillan (NTC), Moores (Petco Park), Manchester (Navy Broadway), Pardee (San Ysidro), Sunroad (Kearny Mesa, Kensington) never have enough.

Does this 15% of San Diegans believe that giving away 91% of all property taxes collected in downtown to developers is ok? I doubt it. They only know what they read in the Union-Tribune and the U-T relies on developers for their dwindling advertizing revenue. In other words the U-T's big advertisers run this city - real estate, sports and hotels

Do 42% of San Diegans actually believe that Sanders is amortizing the
$1,289,038,773 pension debt as he claims he is doing? Again, if the lie is printed often enough people believe it. This is the result:
For a detailed analysis and graphic breakdown of the two most recent mayoral polls, May 1, 2008 and May 21, 2008 go here. It's a mixed bag with some bright spots but also some warning signs. The graphs show the grim battle between truth and lies. All too often lies have won out in San Diego. Let's hope that this time the people will choose truth over lies. Sanders is lying about amortizing the pension debt. That one huge lie alone should be enough to disqualify from holding any public office.

The City Attorney's Race. 05/26/08

                                           by Pat Flannery                           top^

Here are the latest poll figures for the City Attorney's race. Aguirre is holding his own at 29% while Peters has improved by 4%, up from 17% to 21%. Not surprisingly it is looking like Peters will be Aguirre's opponent in the November runoff. Let's examine the numbers:

Aguirre started out more popular with male voters than in his overall poll and has increased it slightly (by 1%). On the other hand Peters' poll with males is about the same as his overall showing but it has slipped slightly (by 1%). So no big changes there.

Peters' overall gain is mainly with females. Those "nice guy" TV ads are working. Peters seems to be charming the ladies. Aguirre on the other hand is definitely a "man's man".

Most of Peters' female fans seem to be younger voters. He has harvested a large portion of that giant 23% female "undecideds" in the May 1, 2008 poll. It is ironic that it will be this group that will shoulder the massive pension debt being handed off to their generation. Peters is hiding it with smiles and getting away with it.

In the voter-rich 18-50 age group (54% of voters) only 5% separates Aguirre from Peters, with 17% still undecided. Goldsmith does surprisingly poorly in this group, only 13%. Likewise Maienschein with his boyish looks. Again, it looks like TV advertising pays handsomely.

Aguirre remains popular with older voters. But Peters is making inroads in them too. Peters' share is up from 16% to 19%.

For more detailed charts on the various age groups go to this page. The Aguirre/Peters battleground is clearly concentrated in the 18-35 age group. Perhaps younger voters watch more TV or know less about the pension debacle. Strangely, Aguirre has lost some ground in one of his strongest constituencies, the over 65s - the pension issue?

Older people are sensitive about their pensions and most San Diego citizens, both young and old, still do not get the connection between our exploding pension debt and the lack of money for infrastructure and city services. Of course they are being told not to worry by the U-T. Good news gets votes so Sanders and Peters lie about the pension.

For a breakdown by ethnic group go to this page. The (polled) ethnic mix seems to be a little better in this poll than in the last one, but it is still very skewed in favor of whites. If blacks and Hispanics were to come out and vote, as they should, this poll would be virtually worthless.

The breakdown by political party and by conservative-liberal is more revealing. Aguirre gets a bigger share of the Republican vote than either Goldsmith or Maienschein, both of whom are Republicans!

As if to underline that Aguirre's fight is fiscal, his poll with conservatives is up from 22% to 31% while that of Peters is down from 18% to 17%, despite Peters' overall gain. Clearly this is all about taxpayers' money.

The battle lines are therefore clearly drawn. Conservative Republicans and most older voters understand that Aguirre is trying to save the City's tax dollars. Union members and retirees on the other hand care more about their own pension dollars and Peters is their champion.

The likely outcome will be a six month duel between Peters and Aguirre that will only be decided in November. Massive voter education will be required. The unions, Peters and Sanders will continue to paint a false rosy picture. They want to cover up the pension deficit until after the 2008 election. Each voter owes it to him/herself to discover the truth.

05/23/08 The art of lying took a new twist last night - Sanders threw MacSweeney under the bus.

                                           by Pat Flannery                           top^

"We really need somebody that's honest" said mayoral candidate Eric Bidwell in this video clip from last night's debate .

He then produced this email from Mike MacSweeney ( It contained a monologue the Sanders' campaign wanted Bidwell to read on TV "bashing Steve Francis".

Thus did Mr. Bidwell "out" Mayor Sanders. Unfortunately it will take more than firing his campaign manager to restore honesty to his administration. There has been a pattern of dishonesty throughout.

A good start in cleaning up the Sanders administration would be the firing of Kris Michell and Fred Sainz, who go all the way back to the dishonest Golding administration and have been the chief practitioners of the art of political lying ever since. They are classic "liars for hire".

In all probability Mike MacSweeney was only doing what he was told to do to preserve the lucrative City jobs of Michell and Sainz for another four years. Kris and Fred have huge pension benefits riding on a Sanders win. They badly need those extra four years.

This is a bitter lesson for MacSweeney or any other outsider who thinks that insiders like Michell, Sainz and Goldstone, who care for nothing but themselves, would hesitate for one moment to throw somebody like MacSweeney under the bus. Honchos in the Republican Party like Tony Krvaric and Tom Shepard did not fire one of their own, this was the act of three ruthless insiders: Michell, Sainz and Jay Goldstone. They have Sanders' ear, and far more intimately than even Shepard.

What Mike MacSweeney did was wrong, we all know that, but Sanders himself was a party to it all along. He tried to seduce young Bidwell. I watched him do it before and after every debate. I attended them all. The reason MacSweeney and the Mayor's team got blindsided on Thursday night was that Bidwell had been going along with it.

When it backfired, Sanders listened to his City insiders not political professionals like Shepard. That was a big mistake. He will regret it bitterly. Shepard would never have fired MacSweeney on his own. The leaders of the San Diego County Republican Party, Kvaric and others know what happened. They know that Sanders used them. He is a City retiree and City insider first and a Republican second, if that.

The Sunroad Timeline. 05/21/08

                                           by Pat Flannery                           top^

Here is a link to all documents relating to Sunroad.

Both the AG Snowjob and the SawyerKnoll Snowjob relied upon a Development Services Department (DSD) misrepresentation of fact regarding the zoning applicable to the Sunroad project (the two reports look like they were compiled by the same person on the same computer.)

Read my notes in red on the SawyerKnoll Snowjob report.

Everybody at DSD knows that the entire Sunroad project is subject to a CC zoning Floor Area Ratio (FAR) of 0.50%. Height limit is only one factor of that FAR. Sunroad has already exceeded its FAR and may NOT do any more construction on that site. Yet it continues to do so and Sanders and his DSD continue to allow it.

Deliberately granting building permits in excess of allowable FARs is corruption. It has continued with the full knowledge and cooperation of Jerry Sanders. Under him the City is flaunting its own laws. No staff report or AG Report can change that fact. In my book it is corruption.

Sanders should issue a "Stop Work Order" (SWO) on the Sunroad project today. But he won't. What is really happening is that he is deliberately helping Sunroad's $40 million case against the City.

He may have appeared to acquiesce in Aguirre's demand for a 20 foot height reduction but he is making sure that Sunroad will be handsomely compensated. Sanders' reputation with the developer community depends upon it. They are all waiting to see how he handles Sunroad. They need to be sure that "our Jerry can fix it".

And fix it he has done with the help of the entire law enforcement establishment of the County. It was all carefully planned behind closed doors long before Sanders held his infamous press conference at City Hall announcing that he was going to ask the State Attorney General to "investigate" Aguirre's charges of corruption. He already knew the result and its timing. It went like clockwork.

Gary Schons, Chief Assistant Attorney General in San Diego, assured the local law enforcement junta that Jerry "Moonbeam" Brown could be relied upon to remain asleep at the wheel of his AG's Office. They knew that space cadet Brown would be away on another planet until the deed was done. They were right. Captain "Moonbeam" didn't even know there was a Mayoral election in San Diego! When he finally woke up he had no choice but to defend his Chief Assistant in San Diego.

I can't imagine this "Enron-by-the-Sea" happening under Brown's predecessor Bill Lockyer, who famously (or infamously) told the Wall Street Journal after the California energy rape crisis that he couldn't wait
“to personally escort Lay to an 8-by-10 cell that he could share with a tattooed dude who says, ‘Hi, my name is Spike, honey.’" Not exactly the PC thing to say but I think we all shared what Lockyer felt about Enron's Ken Lay. Rape comes in many forms and is always ugly.

The next phase in San Diego's odyssey of corruption will be a "settlement" with Sunroad. Sanders will have the City cough up Sunroad's "costs" in reducing the building's height, complete with massive legal expenses of course. The attorneys always get paid.

We will be told that it is in the City's best interests to "settle" with Sunroad, that Aguirre put the City at risk by putting Sunroad through what he did. That will teach any future City Attorney or Mayor not to interfere with the rightful "entitlements" of a developer. Why do you think they are so quiet? Because they already know the outcome, just as they already knew the outcome of the AG "inquiry".

Bonnie Dumanis and her law enforcement friends in high places, such as the Chief Assistant Attorney General in San Diego County, were handed the script a year ago. You can't run a County unless you have law enforcement in your pocket. Developers everywhere know that.

Bonnie learned early on that "you go along to get along". She seems to "get along" with the developers just fine. So does Schons. They know how things work in this County - because it has always been that way. Read this report and timeline regarding Dumanis's involvement in the murky politics of Chula Vista. It tells a lot about our current DA.


We are perilously close to being a police state. 05/20/08

                                           by Pat Flannery                           top^

Here is the Attorney General's Report whitewashing Sanders' involvement in Sunroad. It looks like it was written by Jo Anne SawyerKnoll, Mayor Sanders' Deputy Chief of Misinformation.

The Report is blatantly political, written by people in the San Diego office of the AG sympathetic to Sanders and the law enforcement elite of San Diego County.

This Report takes corruption to a new level. It shows what an uphill battle it will be to clean up this County after Bonnie Dumanis. Anybody who believes that Sunroad did not involve corruption is on another planet. Bonnie Dumanis must be the worst District Attorney anywhere in the country.
And Gary Schons, Chief Assistant Attorney General in San Diego, is as totally political as she is.

In its rush to exonerate Sanders, the San Diego office of the AG has penned gross land use and zoning mistatements that will damage the City's ability to defend itself against false allegations made by Sunroad who is trying to extort $40 million in damages. Will the AG take responsibility for that misinformation? I notice the Report is unsigned.

This whole caper will backfire on the Mayor. It will reopen the whole Sunroad mess. Sanders' friends at the AG's office may be good at whitewash, but they don't know jack about land use. There is still the matter of the SDG&E transformer that remains in the the residential section and the total disregard of the City's Floor Area Ratios (FARs).

The U-T endorses the "Big Lie" - pension amortization. 05/18/08

                                           by Pat Flannery                           top^

This is the amortization schedule we are being told is happening:

This is the actual amortization schedule being implemented:

The result is negative amortization, growing year by year:

And this is only for the deficit as of 2006, $1,289,038,773. The Mayor's "solution" still shows a negative balance of $548 million after 21 years and after $2.7 billion in payments from the City - for that deficit alone! His amortization plan does not take into account "new" deficits being created by the internal growth in benefits already "vested" in current members. That figure is growing exponentially. Nor does it take into account any pay raises e.g. the recent police and fire pay raises. Mr. Goldstone asserts that he can amortize those separately as they occur.

For those of you who would like to check my numbers for yourselves (as you should, particularly the media), go to this free online amortization calculator and compile your own amortization schedule. The "loan" amount is $1,289,038,773, as certified by the Pension System's actuary and as used in the  City's own amortization schedule as provided to me by COO Jay Goldstone.

The annual interest rate is 8%. That is the rate the pension system charges the City based upon its assertion that it would earn that return if it had the money to invest. The number of years is 20. This was set by the Pension Board despite a ballot measure mandating 15 years.

You will arrive at a required annual payment of $131,291,446. Now compare it with what Sanders is actually paying - considerably less. Yet he is telling the public that, as required by a vote of the people, he is fully amortizing the pension debt over 20 years. It is the "Big Lie".

Here is my worksheet. Note that under Sanders' "Big Lie" schedule the balance actually goes up every year until 2019 when it starts to go down but still has a remaining balance of $548,236,856 in 2028. That is outrageous. The CEO of a private company would be fired on the spot.

Another "Big Lie" is his oft-repeated statement that Sanders used the $100 million he borrowed against the tobacco settlement payments to pay down the unfunded pension liability. He did not.

Here is the truth. There is an account on the City's books (not the Pension System's books) called the "Net Pension Obligation" (NPO). It shows the unpaid Annual Required Contribution (ARC) actually billed to the City by the Pension System at the beginning of each year, the amount it pays each year and the amount it owes the System at the end of each year, just like any ordinary creditor/debtor account.

A negative balance has been accumulating steadily since 1999. In other words, in addition to conniving with the Pension System's Board to charge the City less than needed to fund the Pension System, as we all know, the City was not even paying that amount. Here is a summary of the City's NPO account as published in the City's CAFR. Note that the Pension System also charges 8% interest on this negative balance.

(Amount in $ Millions)


The Annual Required Pension Contribution (ARC) for 2006 was $167.631. The City used the proceeds of a revenue bond against the tobacco settlement to increase its payment for that year to $271.349, thus reducing the balance owing to the Pension System from $264.060 to $160.342. Sanders then misrepresented that payment as a reduction to the Pension System's Unfunded Accrued Actuarial Liability. It was not.

Year Beginning Increase Ending


16.458 61.649
2000 61.649 16.746 78.395
2001 78.395 25.997 104.392
2002 104.392 25.538 129.930
2003 129.930 28.628 158.558
2004 158.558 59.495 218.053
2005 218.053 46.007 264.060
2006 264.060 (103.718) 160.342

Yet the U-T wrote in its editorial today:

"In incremental steps, the mayor reshaped the city's finances and began paying the full annual contribution to the pension system, putting it on a path to pay off its staggering debt on a 20-year amortization schedule."

Between Sanders and the U-T this city is morally bankrupt. It is just one "Big Lie" after the other. The truth is that the City's pension system is out of control. The administration, the city unions and the U-T are covering it up. The City's financial situation is unsustainable. The Mayor, his staff and the U-T know it. They simply choose to lie about it.


The City Council must resolve the impasse - no escape. 05/16/08

                                           by Pat Flannery                           top^

City Attorney Mike Aguirre told the City Council today that it has an affirmative duty to resolve the Mayor-union impasse. He issued this Memorandum of Law (MOL) this evening. I received it by email at 4:29 PM. Presumably so did Council President Scott Peters (unless he and his staff had left early, this pleasant Friday evening).

Council Policy 300-06 Section VII (B) gives the power to the City Attorney to determine whether an impasse shall be resolved by the Civil Service Commission or by the City Council.

"B. Impasse Procedures.

If no agreement is reached at an impasse meeting, impasses shall then be resolved by a determination by the Civil Service Commission or the City Council after a hearing on the merits of the dispute. Determination of which of the above bodies shall resolve a particular impasse shall be dependent upon:

1. The subject matter of the impasse, and

2. The applicable provisions of the Charter and Municipal Code of the City of San Diego as interpreted by the City Attorney."

In his MOL today he has determined that it shall be resolved by the City Council. He cites the San Diego City Charter, Section 15 and the above Council Policy 300-06.

Given this obligation on the City Council, to pass a salary ordinance and to resolve any labor impasse, the impasse item must be continued until the Council achieves a majority. There is no escape.

According to Council Policy, "Impasse" cannot be used as a negotiating tool. Once declared by the Mayor, the City Council as the legislative body, must resolve the impasse. The Council may consult with the parties and encourage them to make concessions, but the parties can no longer negotiate directly with each other.

All this Mayoral talk about going to the citizens with a ballot measure is political grandstanding. The City Council must either get the parties to make concessions or impose a settlement by ordinance. We may have a strong mayor form of government, but not that strong. The City Council is still the only body that can pass a salary ordinance.

And pass one they must.


Jerry Sanders, the banker, goes to Wall Street. 05/16/08


                                         by Pat Flannery                           top^

Jerry Sanders was President and Chief Operating Officer of a company called Virtual Capital of California, LLC, while he was running for mayor in 2005. Few knew about it. As part of my sleuthing at the time I found this web site, which though "under construction" had an address downtown. So I paid it a visit. I was surprised to be handed a prospectus for Coronado First Bank, "in organization" at the time.

Well, Jerry is still a director of that bank he and his old college roommate Tom Stickle formed in 2005. Here is what its web site currently has to say about its celebrity director:

"GERALD R. SANDERS is Mayor of the City of San Diego. Since 2004, Mr. Sanders has been a partner in Willows Creek Partners, LLC, a homeland security advisory firm. From 2002 to 2005, Mr. Sanders was President and Chief Operating Officer of Virtual Capital of California, LLC. Virtual Capital partners with research universities and university-affiliated national laboratories to facilitate the transfer of technology to corporations. From 1999 to 2002, Mr. Sanders served as President and Chief Executive Officer of the United Way of San Diego County. Mr. Sanders joined the United Way after a 26-year career with the San Diego Police Department. During the final six years with the department, he was the Chief of Police. "

Funny how the matter of Jerry being a banker has not come up during his placement of a $103 million City loan with Bank of America. Does Bob Kittle and the U-T know that our Mayor is a banker in his spare time or is that just one of those things gentlemen do not talk about?

The California Constitution limits the State Legislature's ability to incur debt. A similar restriction applies to local governments.
Article 16, section 18, (a):

“No county, city, town, township, board of education, or school district, shall incur any indebtedness or liability in any manner or for any purpose exceeding in any year the income and revenue provided for such year, without the assent of two-thirds of the voters of the public entity voting at an election to be held for that purpose....”

In order to avoid that limitation Sanders got his staff, most notably Lakshmi Kommi, his Director of Debt Management to phony up some "lease revenue" money for a $103 million "lease revenue bond" with the Bank of America. The City Attorney has refused to sign off on it.

Now the Bank of America, one of Standard & Poor's biggest customers, have got them to rate the City's bonds. This will enable Bank of America to recast its "private" loans to the City as "public" one's This is a bit like purchasing raw land and getting it rezoned. Sanders' old roommate Tom Stickle sure knows banking and has the connections to fix things for his fellow bank director, Jerry Sanders.



Will the unions move in for the kill, now that they have extracted a key concession from Sanders? 05/14/08

                                           by Pat Flannery                           top^

It was fascinating to watch Mayor Sanders abandon a fundamental tenet of his much-flaunted reform agenda, by abandoning his promise to introduce a defined contribution element into the pension system.

Here he is accepting the unions' demand to retain their 100% defined benefit plan. But to watch it you would be forgiven for missing the cave-in. He had received glowing editorials in the Union-Tribune and elsewhere for his "visionary" new pension plan, only to withdraw it at the last moment, but he dared not admit it. His "spin" staff therefore wrote his Council statement very carefully. They are very good at it.

They produced a masterpiece of deception by omission. He referred to his new "last best and final offer" (LBFO) as if it had not changed since morning, when in fact he had just gutted it in closed session. Here is his LBFO as it started the day. The truth is that he totally caved in and completely adopted the MEA defined benefits pension proposal.

Instead of hailing it for the huge concession that it was, the unions chose to focus on whether or not the Mayor could change his LBFO at the impasse hearing. Here is the relevant City Council policy document on that matter. Section VII (B) (b) clearly states that the purpose of an impasse hearing shall be: "a final effort to resolve such disputed issue or issues". That is exactly what the unions intended to do themselves!

Here is what Ann Smith had to say the following morning on the MEA's web site. She chose to stress that the MEA's LBFO "was a package proposal with each component part interdependent on each other component part". Here is that supposed "all-or-nothing" LBFO.
Now watch Smith's response to the Mayor's well-spun statement . Why did she stress that the MEA offer was an "all-or-nothing" deal? Clearly it was not. The MEA itself had earlier tried (unsuccessfully) to allow the City Council to cherry-pick that "all-or-nothing" deal. Smith (inadvertently?) disclosed in her letter to the MEA membership that: "When MEA argued that the Council should be given the option to take what it liked from the Mayor's LBFO and combine it with a position it liked in the Union's LBFO, the Mayor's response was NO!"

San Diego's labor "negotiations" rival profession wrestling for fake moves. Thus the unions were complaining about Sanders doing exactly what they intended to do, negotiate their LBFO at the impasse hearing.

Sanders might have gone along with the Council "taking what it liked" from his LBFO but he knew that the U-T would have flayed him alive if he had agreed to that little MEA/City Council skullduggery. Also, John Davies and those San Diego "givers" who gave to Sanders' "Reform City Hall Committee" (meaning "Bust the City Council Committee") would have demanded their money back. The Council "taking what it liked" from the Mayor's LBFO - that's how it used to be, not any more.

Besides, Aguirre had closed that "back door" with this announcement back on February 1, 2008. He made it clear that the Mayor and only the Mayor has the authority to negotiate labor agreements on behalf of the City. Aguirre explained that a core principle of labor negotiations is that "there be an independent fact-finding group in the event there is a failure to reach agreement during the course of negotiations". He proposed that that group be the City Council. It is.

It was a clever move to forestall exactly what the unions have since tried to do - "back-dooring through individual Council offices". Aguirre believes that in adopting a strong mayor form of government, the voters intended to deprive the City Council of this "back dooring". Ron Saathoff and Judie Italiano had virtually camped at those "back doors".

Tuesday was the first real test of this reform. The unions failed to exercise their traditional control over a traditionally compliant majority of City Councilmembers. Ironically the Mayor also failed to "impose" the unions' own pension plan.
Aguirre had the last word . Much to Scott Peters' pro-union chagrin, Aguirre explained that the Council must vote up or down on the Mayor's last best and final offer which was the (devalued) one he presented in closed session only minutes earlier. Council Policy 300-06 Section VII (A) (b) clearly gives the parties the right to do just that. But it was intended to be used by the Council on behalf of the unions.

Jim Madaffer then made the motion . It failed in a 4-4 tie . The unions applauded but it was a Pyrrhic victory for both them and the Mayor, particularly for the Mayor. He was the one who had caved in.

The truth is that the Mayor had exhausted his available resources when he gave a 6% raise to the Police and a 5% raise to the Firefighters. He was boxed in. That is why he was willing to abandon his promise to introduce a defined contribution element into the pension system.


Will it be business as usual at City Council today? 05/12/08

                                           by Pat Flannery                           top^

The Total Revenue for the General Fund is $1,188 millions. Here is the breakdown. Note that Property Tax is the largest single item.

General Fund Revenues

Now look at where the money goes. Safety (police, fire and lifeguard) is exactly 50%. That is a very dangerous situation. We are not there yet, but it is because Vallejo found itself spending over 70% of its general fund on police and fire that it had to declare bankruptcy.

General Fund Expenses

Obviously the two big revenue and expense items are Safety and Property Tax. Are they related in any way? Yes. Redevelopment Tax Diversion. Below is a chart showing the tax increment diversion for CCDC alone - a total of $117.2 million. None of those millions can be used for Safety or other City services. It all goes to the developers.

CCDC - Property Tax Diversion - In $ millions

The 1% Property Tax from all those tall buildings downtown is "diverted" to CCDC, where it is spent by an unelected Board, made up of developers. They spend it on "incentives" to themselves to develop the most desirable real estate in America. They then send the bill for safety and other city services to our dwindling General Fund.

Here is the current County-wide figures on all property taxes diverted to Redevelopment Agencies, from the County Treasurer's office. It tells a frightening story. This massive diversion of our basic revenue, property tax, is why our police and fire will soon cost 70% of our General Fund. Will bankruptcy, like Vallejo, then be our only option?

CCDC - Property Tax Diversion - By %

All this is without even mentioning the dreaded "P" (pension) word. Also, the cost for police and fire personnel seems very high. If you divide the direct cost for Police, $409,199,362, by 2,771, the total number of police, you get $147,672. The direct cost of Fire Service is $188,252,919, divided by 1,126, is $167,187 per person per year.

I don't know how that compares with other cities but it seems steep to me. As far as I know it does not include real estate or other overhead.

During the current budget and salary negotiations "property tax diversion" or "redevelopment" will not be mentioned. Instead, Mayor Sanders and his financial wizards, COO Jay Goldstone, CFO Mary Lewis and veteran Director of Debt Management, Lakshmi Kommi, foresaw all this and were busy phonying up "lease revenues" to finance phony Bank of America tax-free bonds.

The money that might have paid for fixing the roads and sidewalks was already promised to the politically powerful police and fire.

Ann Smith and the usual parade of aggressive MEA people will talk for hours about preserving their gold-plated pension "entitlements". Then their placemen on the City Council, Peters, Atkins, Hueso and Young, presided over by their hand-picked Council President, Scott Peters, will mouth their usual platitudes and obey their union masters just as Dick Murphy and a long line of union puppets did before them.

If any organization ever needed change, it is the City of San Diego. It is up to the voters - break the joint rule of union-developers, or Vallejo.


San Diego politics is not for the faint hearted. 05/11/08

                                           by Pat Flannery                           top^

With regard to yesterday's U-T article involving emails that contained links to Aguirre's campaign web site sent to City employees, the picture below is worth a thousand words. Scott Peters is the unions' choice for City Attorney and the unions control City Hall. The ethics complaint is entirely political.

It is obvious to any City Hall watcher that this "complaint" is being coordinated by the city unions. Scott Peters has a similar ongoing complaint against Aguirre at the State Bar.

It is just the way the political game is played in San Diego. It gets real nasty and is not for the faint hearted. Unfortunately the stakeholders are the taxpayers who receive fewer and fewer services every year.

Breaking down the mayoral vote - a glimpse of June 3rd. 05/07/08

                                           by Pat Flannery                           top^

KGTV Chanel 10 has released a poll it commissioned with SurveyUSA one of the largest opinion research companies in America.  Here is the full report in table form. I don't know about you but I need visuals so I spent a few hours making graphs of the data.

The first chart is the overall distribution of the vote. I was surprised at how poorly the three candidates Morrow, Hart and Bidwell fared. The undecided voters are twice the "other candidates" share of the vote.

Jerry Sanders cannot be too pleased to see Steve Francis coming within 4% of him at this stage, with 16% still undecided! That puts Francis within striking distance for June 3, 2008.

The breakdown by age is the first and most crucial analysis. Francis is ahead or level with Sanders in three out of the four age categories but Sanders has a significant lead with the 35 to 49 year olds, who make up the single largest age group at 32% of total voters. Obviously the  Francis campaign will be checking that out.

Notice how the level of undecideds is directly related to age. Most of those over 65 have already made up their minds but are evenly split between Sanders and Francis while 24% of those between 18 and 34 and 18% of those between 35 and 49 are still looking. The under 50 undecideds will therefore be the battleground for the next three weeks.
21% of females have still to make up their minds. Many of them are probably in the under 40 age group. In real estate I have found women more practical than men. They will demand real numbers about the City's finances, its twin deficits, infrastructure and pension, before deciding to whom they will entrust their City's welfare for the next four years. It will take more than empty spin to reach these voters.

Next comes the racial and ethnic mix. What jumps out at you is the truth of the old adage: "the world is run by those who turn up". If this poll is accurate it clearly shows that African-Americans, Hispanics and to a lesser extent Asians are not turning out to vote. They are leaving the field open to the whites, who account for a disproportionate 70% of the vote and therefore of political power.

But those few blacks and Hispanics who are engaged in the political process are overwhelmingly going for Steve Francis. Surprisingly Asians favor Sanders at a higher rate than even white voters. I have no idea why. I know that many Asians work for the City of San Diego. Perhaps they see Sanders as a fellow City-man.

Not surprisingly Sanders gets a much larger share of the Republican vote than does Francis. It is Sanders' core vote. Francis's support is more evenly spread. His campaign message seems to be working - he is being perceived as a potential "independent mayor".

As if to underline the fact that Sanders' core support is the Republican Party of San Diego, the "conservative/moderate" divide hardly exists. Both candidates are perceived as roughly equal in the "conservative/moderate" spectrum. Notice that over 50% of those supporting the three other candidates are "liberals".

The run-up to the June 3 election will mostly be about the "undecideds". The Republicans have made up their minds. They will back Sanders because he is firmly committed to protecting their business interests, the traditional mission of the Republican Party.

So, the old adage, "the world is run by those who turn up", is as true in San Diego today as it has always been, everywhere. Those with "entitlement" business before the City will turn out in droves to protect their special interests, largely the tourism and building industries.

To win, Steve Francis must persuade the "little guy", whether he is white, black, Hispanic or Asian, to claim his/her place in the corridors of power. Politics is all about power and money. It is just that those with both, understand it better. We can only hope that this time, by electing an independent mayor (although rich), the little guy will get a chance.

The truth about City employees - there are more, not less. 05/06/08

                                           by Pat Flannery                           top^

The bar chart below is compiled from figures obtained from City Hall under a PRA request.
Here is a concise schedule, again compiled from data received through a PRA request, breaking down the number of City employees by department at approximately the end of each half year over the period from July 2006 to January 2008.

What the complete schedule clearly shows is that, contrary to what Jerry Sanders has been telling us, the number of City employees has gone up, not down. The total number of paid City employees actually went up by 371 since 2006 - i.e. from 9,822 to 10,193!

Sanders knows how to play the budget game. He knew that the City had overbudgeted when he took office - o
ver 1,500 positions were vacant in 2006. Big organizations do that in order to be able to spend the money elsewhere. Jerry knows how such organizations work.

He proceeded to take advantage of this budget padding to spin the yarn that he was actually cutting City jobs, when all he was doing was partially right-sizing an inflated employee budget, in other words he told us about the blue (budget) column above but did not tell us about the red (actual) column. That's slick advertizing, from a master salesman.

Here is some of that spin from Jerry while all this was going on:

On June 23, 2006 the
Union-Tribune reported:

Sanders has promised to cut 500 city jobs over the next year and streamline many city services to save money."

At a town hall meeting in Balboa Park on August 25, 2006, vowing to fully implement the Kroll recommendations, the U-T reported:

"Sanders estimated that the recommendations would cost at least $45 million, take 30 months to implement, and lead to the elimination of more than 500 city jobs, a higher total than any he has given during his eight months in office."

In his January 2007 State of the City Address Sanders said:

To address the deficits, I have proposed a number of cuts that we intend to implement. Many will come from our BPR and governmental efficiency efforts. Those efforts account for a portion of the 959 positions I propose to eliminate over the next 3 years, including over 650 positions this year."

Anybody reading the Union-Tribune since Sanders took office would be forgiven for believing that Sanders has actually cut City jobs. Remember how Bob Kittle did
an editorial on March 9, 2008 repeating Sanders' lie that his new pension plan would save the City $25 million per year, only to subsequently retract it in a tiny piece buried where nobody would see it? No doubt many U-T readers still believe that Sanders' pension plan will save the City $25 million per year and that he has cut hundreds of City jobs.

But the harsh reality is that the City's pension and infrastructure deficits have got worse, not better, with no fix in sight, only happy talk and downright lies. Sanders may be a nice guy to have a beer with (I don't know, I've never had a beer with him) but I know that we still have giant financial problems and we are not being told the truth about them.

So, we are on our own, it is left to ourselves to ferret out the truth about our City's finances. Therefore the more people who send in Public Records requests for financial information, the sooner we will know the truth and put this whole mess right. Right now we are being kept in the dark and fed "you know what" by our officials. Of course we could choose to remain happy little mushrooms and buy the happy talk.

Sanders' ship of state is on "a sea of troubles". 05/03/08

                                           by Pat Flannery                           top^

The Mayor "released" the September 7, 2007 email from Fred Sainz to Bob Kittle that got snagged by the City's email server because it contained the "f" word. However, he did not release it to the person who made the PRA request, he released it to the party to whom the email was addressed in the first instance - the Union-Tribune. Here it is.

At the time of the original PRA request the maker received an email from the Mayor's office, signed by a Jill Monroe, verifying that ALL Sainz emails were included on the CD provided and that none were redacted. Yet Matt Hall of the Union-Tribune reported yesterday:

"Sainz apologized for swearing in a city e-mail but not for withholding it"
. In other words Sainz scoffed at the Public Records Act and the Mayor's office lied in an email to the maker of the PRA request. Releasing the email to the Union-Tribune, a party to the email in the first instance, does not comply with the law. The law requires that ALL Sainz emails be released to ALL parties who made PRA requests.

Yesterday the Mayor told a press conference:
“You know, Fred shouldn't talk naughty in e-mails, and I've told him that” . He added that that was all that was going to happen about it, which means that the Mayor is joining Sainz in scoffing at the Public Records Act.

Since I published Fred Sainz' email for
August, September and October 2007 other people who received emails from Fred Sainz during that period have informed me that their emails were also excluded from those provided under the published PRA request.

The Public Records Act means nothing to these people. What intrigues me is Jay Goldstone's role in all this. Does he concur in this scoffing at the Public Records Act? It is his responsibility. He is the City's Chief Operating Officer. But more importantly he is the Colin Powell of the Sanders Administration. He is the one person left with a shred of credibility, and that is wearing thin.

Here is the Mayor's press release dated December 13, 2005 appointing Goldstone the City's first Chief Financial Officer. He later  succeeded Ronnie Froman as COO who resigned on June 11, 2007.

Richard Haas, a retired Navy captain, joined Sanders' team on the same day as Goldstone. But he quietly resigned on November 6, 2007
to "pursue personal projects". No resignation letter was released. He had been Deputy Chief Operating Officer for Public Works, responsible for the city's water, sewage and trash operations.

He was replaced by David Jarrell, assistant deputy chief at Public Works. Jarrell appears to be a keen Sanders' supporter. He accompanied him on his recent Budget presentations around town.

What is clear to City Hall watchers is that politics is king in the Sanders Administration. Jay Goldstone famously told Rick Reynolds and Lance Wade that they were "not political enough" and that that was why he had to let them go. What does that say about Goldstone himself? Obviously he IS political enough for a top job with Sanders.

The next few weeks will tell whether those who were "not political enough" missed the boat or whether those who stayed, like Goldstone, were too political and went down with a s(t)inking ship. Tom Shepard and Fred Sainz belong with Sanders, but does Goldstone?

Jay should ponder Hamlet's
"To be, or not to be--that is the question:
Whether 'tis nobler in the mind to suffer
The slings and arrows of outrageous fortune
Or to take arms against a sea of troubles
And by opposing end them."

Now, "there's the rub" Jay. You face the same existentialist dilemma as Hamlet: "Thus conscience does make cowards of us all".


Mayor Sanders is risking public money for an aide. 04/29/08

                                           by Pat Flannery                           top^

The "exception" claimed by the Mayor's policy advisor Julie Dubick for not releasing the potty-mouthed email from her colleague Fred Sainz to Bob Kittle at the U-T on September 7, 2007, may cost the City a lot of money if somebody sues the City for breach of the Public Records Act. I am told by legal experts that the financial penalty could be severe.

The "exception" she quotes applies ONLY to documents specifically prepared for whatever litigation is involved. I will leave it to whoever is playing City Attorney over at the Mayor's Office to find the case law and I will compare it with the citation I have been given by various outside interested parties. Here is the relevant quote from the above citation:

"The court also held that a document is protected from disclosure under the pending litigation privilege (Gov. Code, § 6254, subd. (b)) only if the document was specifically prepared for use in litigation, but Gov. Code, § 6254, subd. (k), confers upon public agencies a broader exemption from disclosure by protecting the work product generated by a public agency in anticipation of litigation."

A whole slew of San Diego lawyers are sharpening their litigation pencils. What the Mayor needs to take into account is the potential liability to the City if he persists in his breach of the Public Records Act. Has he consulted the City Attorney on this, as he is required to do under the City Charter? Who will represent the City in the event of a lawsuit?

The Mayor must use the lawyer the people elect. He does not have the option of using his policy advisors as legal counsel. It would appear that Ms. Dubick relayed wrong legal information to Andrew Donohue of the Voice of San Diego yesterday regarding the offensive Sainz email.

The Mayor should release the offending email and take the consequences, just as he did with the "F bomb". Right now he is shielding an aide, Fred Sainz, with citizens' money. He promised NOT to practice "delay, deny and deceive". Yet that's exactly what he is doing with the Fred Sainz/Bob Kittle email.


The Mayor is not out of the woods regarding the "missing email". 04/29/08

                                           by Pat Flannery                           top^

Andrew Donohue wrote in the Voice of San Diego yesterday:
In an e-mail to me today, Julie Dubick, the mayor's director of policy, said the Mayor's Office would not release the e-mail because it is part of ongoing litigation. The state Public Records Act allows public agencies to withhold records that are part of litigation."

Yes, that is correct but only with regard to Mr. Donohue's public records request because it was filed AFTER Rick Reynolds filed his lawsuit. It appears that every journalist in town filed a PRA request for the offending email AFTER Reynolds filed his lawsuit.

Readers of my blog will remember this paragraph from April 19, 2008:
"Pursuant to a Public Records Request, I have Fred Sainz's emails for the period concerned, August, September and October 2007. They make interesting reading for other reasons too. More of that later."

That particular Public Records Request was filed long BEFORE Reynolds filed his lawsuit. Therefore the "exception" cited by Julie Dubick to Andrew Donohue yesterday does not apply to it.

I await the Mayor's Office to properly fulfill that prior Public Records Request, as required by law. Ms. Dubick could not have been unaware that such a prior PRA request had been filed. It was well publicized and discussed. She obviously hoped that Andrew Donohue and the Voice of San Diego would put the matter to rest yesterday. Well, it hasn't.

Sanders' fox and the City's fragile financial chickens. 04/27/08

                                           by Pat Flannery                           top^

The Audit Committee meets tomorrow morning at 9:00 AM. They will be presented with this Report together with this cover letter from the Ad Hoc Committee formed back on July 30, 2007.

On June 4, 2007 Chairman Faulconer requested the nominations of at least three private citizens as provided by the Committee Charter, one to be appointed by the Mayor and at least two by the Audit Committee.

Sanders appointed his United Way, Red Cross and Bank of America friend Douglas Sawyer. Atkins appointed a recently retired SAIC executive, William Woolson. Young appointed Michael McCraw, who currently
administers the State of California Small business Loan Guarantee Program in San Diego.

This Report has to be a big disappointment to Jerry Sanders and a big boost to Councilmember Donna Frye and mayoral candidate Steve Francis who have called Sanders' proposal akin to suggesting that a fox be appointed to guard the henhouse.

Here is a video of how Donna Frye illustrated her side of the Prop C argument at a meeting of the San Diego Democratic Club on Thursday night April 24, 2008. (I videoed the whole meeting if anybody needs any of it).

Here is the full text of Proposition C, the City Attorney's Impartial Analysis. Here is the official  Ballot Argument Against Prop C, which Donna Frye co-wrote with Carl De Maio, former City Auditor John Torell, John Gordon and Theresa Quiroz.

Here is the official Ballot Argument in Favor of Prop C, written by Jerry Sanders together with his hand-picked fox cubs, which sadly includes Councilmember and Audit Committee Chairman, Kevin Faulconer.

It will be interesting to watch how Faulconer will conduct the Audit Meeting tomorrow morning. Will he reject the Ad Hoc Committee's Report in order to serve his political boss Sanders? 

Here are some quotes from the Report that must be giving Sanders and Faulconer heartburn today:

"Recommendation: The Role of the City Auditor should reflect industry best practices".

"Industry relies on a strong and thorough internal audit function and the City should do the same."

"This committee agrees that the City Auditor should be appointed and not elected but disagrees in the method of appointment. We suggest that the City Council appoint the City Auditor based on recommendations of the Audit Committee."

"The City Auditor should become proactive performing all the audit tasks the external audit performs with at least the same intensity."

"Intensity" is not exactly the word that comes to mind with regard to Sanders' current ever-so-compliant auditor, Eduardo Luna. Last Tuesday he seemed dazed in front of the City Council. He always does. He seemed unaware that his Department has a web site.

As of today that City web site says: "The position of Auditor & Comptroller is currently vacant". Here it is. Maybe it's right. Luna always seems to be on another planet. Perhaps that's where Sanders wants his hand-picked Auditor to remain.

But the voters will decide on June 3, 2008. If the chickens win and the fox loses, it might bring more "foul" language from the Mayor.


More foul language from this Mayor. 04/23/08

                                           by Pat Flannery                           top^

I videoed the Earth Day mayoral debate in Balboa Park's Organ Pavilion on Sunday. Below are extracts of Sanders and Francis on the issues raised by the audience. My apologies (due to web space considerations) to the three other contestants but it seems to me that Francis is the only viable competition to Sanders who has the enormous advantage of incumbency and knows how to use it.
Opening Francis Sanders Well known environmentalist Carolyn Chase did a great job moderating the debate, relaying  environment-related questions from the audience. They seemed to accept Francis as a genuine environmentalist and booed Sanders for his support of the proposed Sunrise Power Link.
AB32 Francis Sanders
Clean Tech Francis Sanders
Mills Act Francis Sanders
Power Link Francis Sanders
Power Link Francis Morrow

A clear philosophical difference was also apparent with regard to the Mills Act. Francis supports the preservation of historic buildings while Sanders berates the preservationists for robbing the City of property tax revenue. He says that San Diegans are abusing the Mills Act.

The State Parks web site says:

"Owners of historically designated buildings may qualify for property tax relief if they pledge to rehabilitate and maintain the historical and architectural character of their properties for at least a ten-year period".

It is interesting that Sanders does not use the same argument against the massive diversion of property tax caused by the City's Redevelopment Agency (RDA), approximately $100 million to CCDC alone. Perhaps it's because RDA tax diversion benefits corporate developers not private citizens.

Sanders, who worships at the alter of corporate profits, supports the Sunrise Power Link, which essentially would import "dirty" electricity from Mexico to be marketed under a "clean air" brand name in the United States. Unfortunately the air we breathe does not recognize international borders.

Francis, despite having made his personal millions in the corporate world, does not think that corporate profits should dictate how our society meets its energy needs. It was an interesting debate.

But for me the shocker came at the end. Normally, in America, the intensity of political competition ends when the debate is over. As Carolyn Chase thanked the candidates and the audience for their participation and as the candidates got up to leave, the usual handshakes were exchanged.

I watched in disbelief as Sanders rudely swept by Steve Francis' outstretched hand. Even from a distance it was an ugly moment. I found Mr. Francis a few minutes later and asked him how he felt about the snub. He told me that it was much worse than a snub, that Sanders actually said "F... you Francis" as he stormed by. All Steve could do was shake his head in disbelief. Personally, I was not surprised.

I was reminded of the language used by Sanders' spokesperson, Fred Sainz, in an email to the Union-Tribune everybody in San Diego now wants released. Is this level of discourse typical of our current Mayor and his staff? Again, I am reminded of Richard Nixon who was noted for his use of foul language in the Oval Office.


The missing email. Sanders has a decision to make. 04/19/08

                                           by Pat Flannery                           top^

Former Assistant Chief Operating Officer (ACOO) for the City of San Diego, Rick Reynolds, filed a lawsuit this week against the City. Before being fired by Sanders on September 28, 2007 he had been responsible for nine City Departments, supervised approximately 1,400 City employees and managed more than $300 million of the City's annual budget. He has been unable to find a job since.

Mr. Reynolds' troubles began when the City's email screening system flagged an email from Fred Sainz, Director of Communications (DOC) for the Office of the Mayor, to Bob Kittle, editorial writer for the San Diego Union-Tribune, dated September 7, 2007. The email was snagged by the system because it contained numerous instances of the "f" word in reference to certain staff at the City Attorney's office and certain members of the City Council.

Chief Information Officer (CIO), Matt McGarvey, brought the offending email to his superior, ACOO Rick Reynolds, who in turn brought it to his superior, Chief Operating Officer (COO) Jay Goldstone. As it happens, Matt McGarvey quit the City this week to work nearer his home in Vista. I guess he "needed to spend more time with his family".

This particular spate of nastiness against Aguirre started with a blast email from MEA  leader Judie Italiano to her 4,800 union members calling Aguirre a "mad man". It brought this warning dated August 9, 2007, from Scott Chadwick  the City's Labor Relations Director, regarding its "inappropriate use of the City's email system".

Despite being given a copy of an obscene and abusive email written by Sainz, Jay Goldstone his boss, did nothing about either the obscenity or the "inappropriate use of the City's email system". Far from being reprimanded, Sainz continued to work with his buddy Kittle (an outside person who does not work for the City) in an effort to destroy Mike Aguirre and to discredit those working for him - i.e. City staff!

Sainz obtained (and presumably still has) the IP addresses of all the computers on the desks of everybody who works in the City Attorney's office. Whoever heard of such a thing? Did he plan on impersonating Mike Aguirre or members of his staff over the Internet? Why else would he do such a thing? Did he hand those IP addresses to Bob Kittle? What use has Kittle put them to in the meantime?

Read the lawsuit filed this week for a complete description of how Sainz ordered and obtained the IP addresses from the CIO's office on September 26, 2007. If it weren't for the fact that the Chief Information Officer (CIO), Matt McGarvey, was on vacation that day we may never have found out about it. In the absence of his boss, a subordinate at the CIO brought the IP request to McGarvey's boss, Rick Reynolds.

Thank goodness there were still a few honorable people left in the City at the time and that Rick Reynolds was one of them. Like everybody in San Diego Reynolds knew that Mayor Sanders was waging a war to get rid of City Attorney Mike Aguirre. Sanders hadn't particularly liked being called corrupt over Sunroad a few weeks earlier.

It is clear that Sainz' boss, Chief Operating Officer Jay Goldstone, conspired to cover up Sainz's actions. But "what did the Mayor know and when did he know it?". For the Mayor the parallel with Watergate is obvious. He can no longer blame his staff.

Attempting to gain access to the computer of the City Attorney is the electronic equivalent of the Watergate bag job. That cover-up led to Nixon's last helicopter ride out of the White House - in disgrace.

Rick Reynolds, an ex-Navy officer and straight shooter, protested Sainz action in a memo to Goldstone dated September 27, 2007:

"the information could be combined with network logs or other trackable system information, resulting in individually identifiable information which would typically not be available for or subject to disclosure. In addition, disclosure of our internal IP addresses to any unauthorized parties would violate system security policies by providing information that could be used maliciously for 'hacking' or gaining unauthorized access, to City systems (either internally or externally)."

Goldstone's reaction: he fired Reynolds! Loyalty trumps honor in the Sanders' administration. Goldstone chose loyalty to his boss (and to his $250,000 salary).

But now for the interesting part.

Pursuant to a Public Records Request, I have Fred Sainz's emails for the period concerned, August, September and October 2007. They make interesting reading for other reasons too. More of that later.

But surprise, surprise! The obscene email to Bob Kittle dated September 7, 2007 is missing! Perhaps Fred considered it too much  for delicate ears such as mine or yours.

I don't know what the legal penalty for such a breach of the Public Records Act (PRA) is, but I can safely say that the political penalty for withholding such a document of great public interest as that email has now become, may be a "for real" picture of Sanders as the one above. And he will not be boarding a Marine helicopter.

For more background information and links to various documents associated with this story, read my blogs dated September 9, 2007 October 2, 2007 and October 14, 2007. It seems that our Mayor's Office together with our monopoly newspaper the U-T, has dedicated an enormous amount of City and U-T time trying to discredit Mike Aguirre. Why?

Do you think Mike is paranoid? Thinking they are out to get him? Or is there something to it? Is Sanders really corrupt, as Aguirre says he is? We know there is a lot of union money at stake on the pension issue. We know there is a lot of developer money at stake on Sunroad-style projects. Then there is the Chargers who want a sweetheart deal. "Big Money" wants to get rid of Aguirre and Sanders serves "Big Money".

The Mayor could clear up the IP-gate issue very quickly, by releasing the emails that were withheld in the above PRA request. But then he would have to fire Sainz, maybe even Goldstone. Stay tuned.



Aguirre introduces Goldsmith to the Debt Limit Law. 04/18/08

                                           by Pat Flannery                           top^

Jerry Sanders and the city unions have been wrongly asserting for months that Aguirre has lost his pension case. The truth is that Aguirre filed notice of his intent to appeal Judge Barton's decision the moment Barton handed it down. Aguirre has always strongly asserted that Judge Barton erred on at least three key points of law and that the Appellate Court will overturn his flawed ruling.

Here is the full pension case filed by Aguirre today, dated April 18, 2008. It is a good summary of Aguirre's position from the moment he took office - you can't spend money that you don't have.

The most fundamental job of the courts is enforcing the Debt Limit Law. Without it legislators and administrators would go hog-wild with spending. The law simply states that a government may not incur any indebtedness or liability that exceeds its income for that year, without the assent of two-thirds of the voters. What could be clearer than that? Yet Barton has ruled that it does not apply to pension systems!

Whether Aguirre wins his argument whether an extension of the Statute of Limitations, enacted in the middle of his court proceedings, applies to his case before Barton or not, the Appellate Court cannot ignore the fundamental law for good government in California - the Debt Limit Law. Otherwise there would be financial chaos.

Here is a short video clip of Mr. Aguirre telling Jan Goldsmith who is running for City Attorney as "Judge" Jan Goldsmith, that a case is not lost until the Court of Appeal has ruled  Earlier, at a candidate forum in the Rancho Bernardo Inn, Goldsmith had repeated the Sanders' and union line that Aguirre has lost all his pension cases.

It is interesting that Aguirre has won his big cases on appeal, e.g. the $100 million De la Fuente case. Judge Barton and Judge Wellington, two "establishment-pleasing" judges, seem ready to declare that black is white when Aguirre is the plaintiff.

The weekly feed at the public trough: my report. 04/16/08

                                           by Pat Flannery                           top^

This week's legislative session (Monday and Tuesday is considered one session), was a wild ride. I sat through most of it, even though I only intended to sit in on the Tom Story item.

The City Council granting itself a 24% pay raise grabbed the media headlines. But, to me the big story was the Mayor asking the City Council to approve $250,000 for a special prosecutor in the matter of the People of the State of California vs. Tom Story. Said "prosecutor" would report exclusively to the Mayor and City Council, in other words to Sanders and Peters.

Here is Jay Goldstone's letter to Scott Peters dated April 11, 2008 (last Friday) requesting him to docket the item for yesterday, April 15, 2008 (the following Tuesday). Try getting your item on the docket that fast. Peters eagerly obliged the Mayor because they both saw an opportunity for a political hit on Aguirre. But it backfired. Here's why.

They have again opened up the sordid Sunroad affair. In their eagerness to score a political hit on Aguirre, the much-flaunted (by themselves) Mayor's team, have shot their boss in the foot.

In the process they have also shot Bonnie Dumannis in her dainty little foot. She is now exposed for prosecuting Chula Vista Councilmember Steve Castanada, as a favor to a mayoral friend, Cheryl Cox, while refusing to prosecute Tom Story as a favor to another mayoral friend, Jerry Sanders. Ms. Dumannis is a totally political DA.

I went to Judge Wellington's court to see for myself how Pat O'Toole was faring in carrying out his boss's instructions to "get" Castanada. Gerry Braun put it better than I ever could in his U-T column today - "Integrity is on Trial" - 'nuff said.

So what happens next? It is not good for Tom Story. His attorney, Pamela Naughton (with the help of Scott Peters cutting off Aguirre's microphone every time he attempted to speak) painted Story as a hard-working former City employee, unfairly charged by an out-of-control City Attorney, has also backfired. Here's why.

The fact remains that Aguirre succeeded in collecting the evidence against Tom Story despite the best efforts of Sanders, Dumannis, Judge Wellington and Police Chief Lansdowne to prevent him. And he still has it! They seem to have forgotten that. Or have they? Is that the reason Judge Wellington barred Aguirre from "any and all involvement in this matter"?

The "brilliant" move by the Mayor's team was brilliant on paper only. The idea was that the Mayor would get the City Council to "authorize" the payment of $250,000 out of the City Attorney's budget. That must have got a big laugh in the Mayor's office. Peters and Sanders would then pick a Pamela Naughton style "special prosecutor", at Aguirre's expense, who would then "find" that there was no evidence against Tom Story. They must have been rolling on the floor laughing over that one.

But the evidence collected by Aguirre (still in his possession) was enough to convince a judge to issue a search warrant against Story, the search warrant that Sanders and his Police Chief killed off. Story's attorney, Pamela Naughton, yesterday told the City Council that "every law enforcement officer in the County" determined that there was no evidence against Story. Really?

She forgot to mention that a judge had granted Aguirre's search warrant in the first instance. But whenever Aguirre tried to point that out yesterday, Peters cut off his microphone. Peters continues to run a "Star Chamber". 

We clearly have a situation in San Diego where if you are not part of the "in" crowd, you can be prosecuted for whatever they dream up against you. Ask Steve Castanada. And if there is evidence against a member of the "in" crowd like Tom Story, a Judge Wellington will issue a political pronouncement from the bench barring our elected City Attorney (who as we all know is not part of the "in" crowd) from "any and all involvement in this matter".

Stacey Fulhorst, Executive Director of the City of San Diego Ethics Commission, will be under pressure from the Mayor's office to exonerate Tom Story. Story's attorney, Pamela Naughton, told City Council yesterday that Fulhorst advised Story at the time he left City employment that he could immediately and legally lobby the City on behalf of Sunroad because he had not been directly involved in the too-tall building, only in the residential portion of Sunroad's Kearny Mesa development. Naughton displayed a series of large maps to demonstarte this point. It is central to her case.

It will be interesting to see if Ms. Fulhorst confirms Naughton's assertion. She declined to do so yesterday when pressed by Aguirre on the matter. Like the Pension Board, the Ethics Commission has its own attorney. Ms. Fulhorst will need all the legal advise she can get on this one. The City Council has dumped a very hot potato in her lap.

That is why I think the Tom Story affair eclipsed a long list of other egregious examples of misgovernment in the interest of "in" groups who use City Hall as their personal welfare office. The others include:
  1. the MEA's attempt to secure an unlawful pension benefit for its former President, Judie Italiano,
  2. the creation of an unfunded pension liability of $7.3 million as a bi-product of the police salary raise,
  3. the selling off of City-owned properties using favored "in" real estate brokers, like Grubb & Ellis, who do not have to share their commission with real estate brokers like me who are not "in";
  4. the hiring of a flawed pension consultant, Mercer Consulting, for "Additional Services Related to the Proposed Pension Plan",
  5. Scott Peters' attempt to deliver paid parking in La Jolla for his business friends,
  6. the approval of a $69 million play money bond issue by CCDC's Nancy Graham and her downtown developer friends.

In a normal city anywhere in the world any one of the above items would be enough to shock the citizenry to revolt in the streets. But in San Diego it was just another business-as-usual "legislative session".


Are pension benefits pension benefits? Dumb question. 04/10/08

                                            by Pat Flannery                           top^

Sanders' new pay agreement with the Police Officers' Association (POA) says:

"It has been, and continues to be, the position of the Mayor that the above described DROP and service credit purchase provision are not vested benefits and are therefore subject to modification without compliance with the strict rules governing modification of vested retirement benefits."

His press release today said:

"With the Council’s concurrence, I intend to file a lawsuit to challenge whether or not the DROP program and employees’ ability to buy pension service credits are vested retirement benefits.  The employees unions and I fundamentally disagree on this issue. I believe them to be employment benefits that can be negotiated away, not unlike pay and health care. They disagree.  I think the best way to settle this issue is to allow a judge to decide."

However, the actual agreements says:

"The City understands the Association’s position of strong disagreement with the City’s position on the above referenced issues, and the need (but not the right) to litigate them."

Watch this video clip from the mayoral debate on Thursday night April 3, 2008 in Penasquitos . I think it shows Sanders' real intent - to protect the unions' pension benefits.

told Steve Francis that the City's Deferred Retirement Option Plan (DROP) and its Purchase of Service Credits (PSC) programs are "vested" pension benefits, not negotiable  "employment" benefits, because "the judge said that we have to pay those benefits".

He then told Francis (testily) that if anybody thinks they can "unilaterally step in and fix this" they "don't know what they are talking about". In the same breath he told an astonished Francis that "670 positions, whether there's a body in them or not ... are real savings and a business man should know that". Sanders seems to believe his own spin. No wonder Francis looked aghast. How does one deal with "whether there's a body in them or not"?

But Sanders is no fool. I believe he has worked out a deal with the unions whereby he will bring a bogus lawsuit, before a sympathetic judge like in the Tom Story case, who will say for the last time: "you have to pay those benefits". That's what the unions really want.

If it works, the unions will have their pension benefits confirmed once and for all. Jerry will then tell the public that he did his best for them and they will all blame Aguirre for losing in court.

Sanders and the legal establishment already know who will try it and what the result will be.

They will hand Aguirre another Tom Story-style "judgment".

Sanders wouldn't be filing this case if he didn't already know the outcome.

The trouble is Jerry, the money is running out - "a businessman should know that." The California Constitution limits the State Legislature's ability to incur debt. A similar restriction applies to local governments - Article 16, section 18, (a).

“No county, city, town, township, board of education, or school district, shall incur any indebtedness or liability in any manner or for any purpose exceeding in any year the income and revenue provided for such year, without the assent of two-thirds of the voters of the public entity voting at an election to be held for that purpose....”

Before Sanders had his change of heart, Aguirre was already pursuing two legal strategies to set aside illegal pension benefits:

The first strategy asserts that the benefits Sanders is now all of a sudden concerned about, were granted illegally because: (a) borrowed funds were used to pay the benefits without the public vote required by the City Charter and State Constitution and (b) the benefits were granted by City officials who had a conflict of interest because they stood to personally gain from the increased benefits.

The second legal strategy for setting aside illegal benefits is based on the fact the pension board administered the pension plan illegally because the board overcharged taxpayers by more than $350 million for two pension perks. 

Sanders and Peters repeatedly misinform the public by stating that Aguirre has already lost his pension law suits.  In fact,t
he first lawsuit based on the illegally granting of pension benefits is pending in the appellate court, the second lawsuit based on illegal administration of the pension plan is pending in state trial court.

Sanders' lawsuit is just posturing. He should quit trying to be City Attorney as well as Mayor. He should take the advise of the elected City Attorney.

Did the City breach the State's liability limit law in granting retroactive and under-cost pension benefits? Of course it did. This State law is repeated in Section 90 of the San Diego City Charter. Did the City's pension board overcharge San Diego taxpayers by more than $350 million for DROP and PSC? Of course it did.

Aguirre has it right. He was already pursuing the proper legal startegies. Sanders should get behind the elected City Attorney instead of playing politics with pension benefits to get himself reelected.


Jerry Sanders is Dick Murphy II. 04/09/08

                                            by Pat Flannery                           top^

"So now it is up to Sanders. Will he back off and avoid repeating the disclosure frauds of Dick Murphy? Or is he, like Murphy, a slave to the "strong union form of government" this city has endured for decades?"

That's what I wrote on February 2, 2008.

Sanders did not back off. He pressed on. He stacked the City's five-member Disclosure Practices Working Group (DPWG) with three of his top aides,
COO Jay Goldstone, CFO Mary Lewis and Director of Debt Management, Lakshmi Kommi.

This "Sanders' Three" will always outvote the other two, City Attorney Aguirre and his public finance deputy, Mark Blake.

For Sanders to now claim that his administration is untainted by those who committed the 2002 SEC fraud is staggering in its audacity. Lakshmi Kommi was at the very heart of the SEC fraud, yet Sanders has put her in charge of all his bond disclosures.

Here is what I wrote about her on February 2, 2008:

"Lakshmi Kommi is Director of Debt Management, (formerly the Financing Services Division of the City Treasurer's Office). She has been with the City since 1993, succeeding her Financial Services boss Mary Vattimo, who became City Treasurer in May 2001.

Manager's Report announcing her appointment in 2001 said that she would be: "responsible for initial and continuing disclosure reporting in compliance with federal securities regulations, and for managing the Equipment and Vehicle Financing Program. Ms. Kommi serves as a liaison with the bond rating agencies and will be responsible for structuring and executing financing plans for a variety of bond financed projects."

It seems that Sanders now wants her "disclosure" expertise.

Vattimo was subsequently demoted to the purchasing department in December 2004 amid reports that employees in her office had destroyed documents. She resigned from the City in May 2005. How much of that rubbed off on Kommi is not clear. I remember her from the strange bond issuance affair involving the "Banc" of America who masqueraded as the "Bank" of America, in October 2005."

Sanders is in deep trouble and he knows it. His aides are desperately trying to spin him out of it but they are doomed to fail. Facts are facts.

And the fact is that Jerry Sanders has conspired with the perpetrators of the 2002 securities fraud (many of whom are still in office), the current pension administrator, David Wescoe and the union leaders, to try to hoodwink the SEC and rating agencies for the second time.

Will our city ever escape its sordid past? Take the time to read my February 2, 2008 blog and watch the video clips. Watch Toni Atkins walk out of the Audit Committee when Mr. Aguirre expressed concerns about the Mayor's disclosure practices and her rude interruption
of John McNally, the DPWG's outside disclosure counsel and one of the top securities lawyer in the country, when he dared express the opinion that Aguirre's disclosure concerns were genuine.

San Diego seems to have a problem with the truth, which has gotten worse under Sanders. Something has to change.


A clear message from the SEC. 04/07/08

                                            by Pat Flannery                           top^

Here is the full SEC complaint filed today alleging fraud by five former City officials in the issuance of $260 million San Diego municipal bonds. The accused officials are former City Manager Michael Uberuaga, former City Auditor and Comptroller Ed Ryan, former Deputy City Manager for Finance Patricia Frazier, former Assistant City Auditor and Comptroller Terry Webster and former City Treasurer Mary Vattimo.

Here is the SEC Press Release summarizing the case.

This, together with the SEC Cease and Desist Order under which the City is currently operating and the previously settled SEC case against former outside auditors Saiz and Calderon, should put the Mayor's office on notice that nothing but the highest level of auditing and disclosure will be acceptable to the SEC and the public markets.

Yet amazingly that is not what we have seen over the past few months. The City Attorney had to force the Mayor and his staff to re-write the 2005 Financial Statements, which at first lacked proper disclosure of the City's pension liability. For this the City Attorney was accused of being an obstructionist by the Mayor and the Union-Tribune.

Today's message from the SEC should also be taken to heart by the pension administrator David Wescoe, who often seems more concerned with protecting the pension "rights" of union presidents than fulfilling his fiduciary duties to the San Diego taxpayers.

Perhaps the most interesting aspect of today's filing is the names that are missing, like Lamont Ewell and Casey Gwinn. Today's action by the SEC may be a tactic to get at the elected officials. The five accused will sing like canaries in court.

The SEC wants to send a strong message to municipalities (this is what this is all about) they will not let the elected officials off the hook. And two of these elected officials are currently running for City Attorney? At least Dick Murphy had the good sense to disappear.

Kensington residents show the way. 04/03/08

                                             by Pat Flannery                           top^

Local communities in San Diego feel like they are at war with City Hall; that their city government actually militates against them.

Sanders' own community, Kensington, is a perfect example. Out of a total of 1,400 households more than 1,000 residents signed a petition opposing Kensington Terrace, a 3-story, 56,000 square foot mixed-use commercial, office and residential project in their low-rise, 1 and 2-story quiet Kensington neighborhood.

Kensington residents insist that the proposed development would inflict unmitigated adverse impacts on the character, traffic, historic resources and overall environmental quality of their residential neighborhood.

the Kensington community fought back and they are an example to the rest of us. They produced this 73 page booklet entitled “Kensington Terrace: Impact on Community Character”.

Donna Frye was one of only three Councilmembers who listened to them and voted against the project saying: this project epitomized the problems with San Diego’s government and the influence developers have over it.

But Jerry Sanders and the full power of the mayor's office is behind this project. His friend and campaign contributor Sunroad principal, Richard Vann, is the developer.

Margaret McCann, spokesperson for the citizens group Heart of Kensington said:

This City Council has now done to us what it has done to many other San Diego neighborhoods.  And like those other neighborhoods, we now must go to court to enforce our rights, and make the City and the developer do what they are required to do under the law.  The City almost always loses these battles, and we feel confident it will lose again, and our rights will be vindicated.

The Heart of Kensington (HoK) group is now forced to take up legal arms against their own city government, as so many other neighborhood groups like Friends of San Diego have had to do. HoK filed a lawsuit to reverse the planning decision approved by the City Council on February 5, 2008.

There were hundreds of protest letters by angry residents. Here are some of them: batch one, batch two and batch three. To counter them the developer-friendly Union-Tribune wrote a scathing editorial on March 22 siding with Sanders and blasting the residents as obstructionist.

The U-T pointedly referred to "downtown" Kensington and went on to advocate that all San Diego neighborhoods must inevitably become little cities complete with a "downtown" all of their own. No doubt the U-T is looking to future advertising revenue from these "downtowns".

Here's what the U-T editorial staff actually wrote:

"But just as downtown has gentrified, residential neighborhoods are increasingly citified: The townhouse-office-retail combination is a slice of urban living – density and all – ever more common in built-out cities such as San Diego. And a neighborhood's ability to reject a legal development on land a developer owns is and should be limited. Dread “developers,” after all, built Kensington."

No mention of the fact that it was a Sunroad principle and buddy of Sanders that was doing the Kensington residents the favor of "citifying" their quiet neighborhood against their will.

The editorial ended with:

"Also for sure, however, neighborhood planning committees, such as the Kensington/Talmadge Planning Committee, have considerable clout and pages on the city's Web site noting meeting dates, agendas and contact information. Win or lose, the best way – and the cheapest way – for property owners to learn of development in their community is to keep themselves apprised."

The U-T forgot to mention that
like many other community planning groups throughout the city, the “Kensington-Talmadge Planning Committee” had been taken over by developer-friendly shills, many of whom live elsewhere but have business addresses in the community. This is not only allowed by the City but actively encouraged in order to ensure developer control.

But, the Kensington residents struck back. At the annual election of the Kensington/Talmadge planning group on March 12, 2008, 7 rotating (of 15) board members were swept from office in a citizen clean sweep. The developer stooges were replaced by real neighborhood people.

Hopefully we will see an upsurge of such community revolt in planning groups all across the city. Kensington, Sanders' own neighborhood, has shown us the way.

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