We hear a lot these days from Scandal City officials that getting the long-delayed audit of the city's 2003 finances completed is Job 1. Everything else comes second, they say, for without that audit, the city can't borrow the money necessary to keep the trains running on time, so to speak.
That's why it was bizarre how nonchalant a three-person city contingent was last Friday in urging the San Diego City Employees Retirement System board to waive its attorney-client privilege—doing so would allow federal investigators to get their hands on currently locked-down internal documents, and, in turn, allow city-hired auditors to finish their job on the 2003 numbers.
The contingent—lame-duck Mayor Dick Murphy, City Councilmember Toni Atkins and Troy Dahlberg, an accounting professional who's part of a committee hired by the city to make sure the audit gets completed-appeared poised only to put the board to sleep. Murphy delivered a half-hearted, monotone, who-the-hell-cares plea for privilege waiver. Atkins read a dry resolution passed previously by the City Council urging waiver. And Dahlberg simply reiterated that the city really needs to get that audit done-which the SDCERS already knew.
But what the retirement board really needed to hear is why it was in their interest to waive privilege. The board's primary duty is to protect the pension system and its members, so they needed the request to come from that angle. Dahlberg told CityBeat this week he thought it best to stay on the point of the city's interest. Fine, but it probably fell on deaf ears because the retirement board doesn't seem to give a damn about the city's problems.
The meeting was a microcosm of what's going on at Scandal City Hall. The board heard two different presentations—one from Murphy, Atkins and Dahlberg, and one from City Attorney Mike Aguirre—but they were asking for the same thing. They should have spoken with one, unified voice, but Scandal City Hall is fractured-perhaps irreparably. Aguirre's critics blame him for that; his supporters blame City Manager Lamont Ewell.
Whatever the case, Aguirre's critics might want to take note that it was he on Friday—and only he—who gave the retirement board some real food for thought.
“The reason that you want to waive attorney-client privilege... cannot be because you want to help the city,” Aguirre told board members. “It's not about being a Good Samaritan-that's what happened with MP 2.... The reason that you want to waive attorney-client privilege is because it's in the best interest of your beneficiaries to find out if people that were supposed to be protecting them were in fact protecting them.”
“MP 2” is Manager's Proposal 2, code for the 2002 deal in which the City Council granted enhanced retirement benefits to city employees that it could not afford in exchange for the retirement board allowing the city to continue under-funding the pension system. It's the subject the criminal charges District Attorney Bonnie Dumanis' filed last week against five former members and one current member of the retirement board, whom Dumanis and Aguirre both believe illegally enriched themselves with additional retirement pay when they voted to allow under-funding.
The crucial issue of waiving attorney-client privilege is inextricably linked to the prickly matter of who is giving the retirement board legal advice. Aguirre has asserted control over legal representation, but the retirement board has refused to let go of its in-house lawyer, Lori Chapin (who's become a bitter enemy of Aguirre), and its outside firm, Seltzer Caplan McMahon Vitek. Chapin and the Seltzer Caplan firm have apparently advised the retirement board behind closed doors to refuse to hand over attorney-client documents.
Aguirre has asked the board to go with him into mediation to settle the matter. That's one way to handle such a sticky situation. Another is for Aguirre and the board to agree to have the board politely send Chapin and Seltzer Caplan on their way and hire an outside firm to advise them. The new firm could interview the old lawyers on their way out, to get their side, and they could listen to what Aguirre has to say. Then they could advise the board on the attorney-client document issue, hopefully free of political motives.
That just might be the answer, because the audit, the investigations, the city's financial health, the retirement system's health—it all might hinge on which lawyers the retirement board is listening to.