Joe Craver sounds a little nervous, and he probably should be. As the chairman of the Public Facilities Financing Authority and Mayor Dick Murphy's 2001 Blue Ribbon Committee on Finances, Craver has unexpectedly landed a supporting role in the city's ongoing financial scandal that has attracted the interest of the Securities and Exchange Commission and U.S Attorney's office.
Craver became the subject of allegations last week when CityBeat broke a story about an April 2002 memo from Blue Ribbon Committee (BRC) member Richard Vortmann. That memo, composed just two weeks after the BRC told the City Council that the city was basically fiscally sound, warned of several looming disasters including the city's under-funded pension system. Last week, nearly three years later, the memo-sent to BRC members, city Auditor Ed Ryan and his assistant, Terri Webster (Ryan and Webster staffed the committee), and a Murphy policy advisor-brought City Attorney Mike Aguirre's ongoing public corruption investigation inside the mayor's office and cast further doubt on the BRC.
To some, the memo also raised the possibility that the committee's findings were manipulated or delayed by Ryan, Webster, the mayor's office or others. And one phrase in particular, "the committee's unstated concern over ballpark financing and any impact to the city's credit rating are now behind us," provided many, including Aguirre, with a possible motive for the alleged cover-up of the looming financial crisis: to dupe Wall Street and potential bond investors, thereby allowing the city to issue bonds needed to finance the then-beleaguered downtown ballpark.
Moreover, the following facts helped to bolster the theory that the ballpark was the answer to the question, Why the cover-up?:
* Dennis Gibson, a Murphy policy advisor, was the mayor's liaison to the BRC while at the same time serving as his go-to-guy on ballpark issues.
* The ballpark bonds were issued on Valentine's Day of 2002, the very same day the BRC presented its report to the mayor in a closed-door meeting.
* Ed Ryan, who resigned last January just weeks before officials disclosed errors and omissions in city bond statements, provided the BRC with data while simultaneously serving on the PFFA.
* The BRC report, originally expected to be completed in early September of 2001, languished until February 2002, when the ballpark bonds were issued.
Aguirre is expected to release the second report detailing the findings of his ongoing investigation into the alleged cover-up later this week.
Responding to Vortmann's memo last week, Murphy told CityBeat that he never saw it before and that "Gibson received the memo but took no action because the letter came two months after the Blue Ribbon Committee report was finalized." He later told the Union-Tribune that John Kern, his chief of staff, told him that Gibson never gave Kern the letter. Murphy explained that he receives "hundreds of letters, and particularly those that aren't addressed to me, I would not normally see."
Gibson has not returned phone and e-mail messages, and last week Aguirre told CityBeat that he'd been unable to track Gibson down. According to Gibson's voicemail message-updated recently to include his new title as ballpark administrator-he's out of town and won't return until Feb. 22. A spokesperson for the mayor said Gibson's on vacation.
Returning from his own vacation, a cruise to celebrate his 52nd wedding anniversary, Craver, who also serves as chair of the San Diego County Regional Airport Authority, spent last weekend playing catch-up and trying to figure out what's going on.
Craver became embroiled in the mess because, as chair of the BRC-tasked with surveying city finances-and as chair of the PFFA-which assists city agencies in issuing bonds-he was in a unique position to facilitate that deception or, at the very least, to have noticed dramatic inconsistencies between the BRC findings and those reported to investors.
He told CityBeat he first learned that the BRC report was the subject of Aguirre's investigation when he called Kern to inform him that he was back in town and available for airport duties.
Craver says Kern mentioned the brewing scandal but insists that's pretty much the only input he's ever received from the mayor's office regarding the BRC or the ballpark bond process.
Craver says he never met one-on-one with the mayor, and the first time he met Murphy in person was at the initial BRC meeting in May 2001.
"The mayor said, "These are your marching orders; this is what I want you to do,' and it was very vague," he recalled. The next time Craver says he saw or heard from Murphy was Valentine's Day, when the committee presented its report. Craver says he had a similar experience on the PFFA.
"During the ballpark bonding, I never talked to the mayor... nor did I talk to John Kern. I was almost a non-entity to them," he said.
As for Vortmann's memo, Craver says he can't recall ever seeing it before CityBeat showed it to him, but he expressed concern that something he likened to a minority report had been disregarded
"Quite frankly, I could have gotten this, but I don't remember seeing it or having it," he said, "but if I would have gotten it then... I would have told him that-and I see here that Dennis Gibson was faxed this-that this has got to get to the mayor."
But last week, Aguirre released two additional memos that seem to indicate city staff influenced the committee's final report. One of the memos, from Webster to Ryan stated:
"I reviewed [Vortmann's] changes... it [sic] most places he deleted your recent changes and put back his language... I will suggest some changes to his conclusions to more emphasize the point you made in the meeting... I don't see the value of arguing with him on the wording of the other issues any more and it is too complicated for the rest of the committee to grasp and help change Dick's mind... so I suggest we agree to disagree... we gave a good shot at changing him... he just didn't fall for it... all...."
After reading that message, Craver was crestfallen.
"That really makes me feel bad because I have a great respect for Ed Ryan and Terri," he said. "I read that almost like it's collusion... and I'm appalled when I read it."
As for allegations that the BRC may have tempered its findings to facilitate the issuance of the ballpark bonds, Craver dismissed any suggestions of wrongdoing.
"The Blue Ribbon Committee and the PFFA, it just so happens that they were happening at the same time, but they weren't related at all," he said, adding that his duty was to chair the PFFA's infrequent meetings-held only when the city issues bonds-and he relied heavily on the expertise of fellow members to evaluate bonds.
"I don't completely, totally understand" bond documents, he said. "I have two people that I relied on implicitly and that is Renee Comeau and Sam Brown... because they are real sharp.... I'm a businessman and bonding is not what I do for a living."
For the most part, the three citizen members were on their own.
Craver said Ryan and then-City Manager Michael Uberuaga, who resigned last March, attended only one meeting of the PFFA since he was appointed to the authority in 1999, despite being ex-officio members with voting privileges. Craver said he asked Assistant City Attorney Kelly Salt, who staffed the PFFA, why they never showed.
"I often asked the question, "Well, why doesn't Uberuaga... attend these meetings?' and I never really got a real satisfactory answer," he recalled. ""And why doesn't Ed Ryan attend these meetings?' and I didn't get an answer to that.
"Quite frankly, I thought it was strange because probably nobody knows more about what's going on in the city other than the city manager and also the city auditor."
Salt, who was subpoenaed by the SEC in December and is scheduled to testify this month, did not return calls, and Ryan and Uberuaga could no be reached for comment Tuesday.
"Whatever was going on, I was not privy to it," Craver said. "I'm not a City Hall person. I'm not a politician. I'm just an ordinary citizen."