CA: Aguirre-council rift escalated quickly

San Diego Union -Tribune ^ | 2/12/05 | Matthew T. Hall

[NormsRevenge]

Michael Aguirre's relationship with the San Diego City Council began eroding his first day as city attorney when he said a financial crisis won't end until "a new generation of leadership takes hold of our city government."

If that line was a jab at current leadership, Aguirre's action last week was an assault. He accused all but two council members of breaking federal securities laws in a report dropped Wednesday an hour after City Hall closed.

Tensions between Aguirre and the City Council escalated quickly from his Dec. 6 inaugural speech to heated exchanges he had two weeks later with Councilmen Scott Peters and Michael Zucchet. Those came at a council meeting where they were talking about federal investigations into city pension problems and financial practices.

Aguirre, who calls his probe into the city's pension deficit a campaign pledge being fulfilled, says his office can still work with the council on other city business.

"We're not getting married," Aguirre said. "It's a professional relationship. Everyone has an obligation to have a professional relationship."

But council members are skeptical and say the rift is harmful. Zucchet, Councilman Jim Madaffer and City Manager Lamont Ewell say Aguirre's investigation is paralyzing City Hall.

"Virtually all communication between department heads and the City Attorney's Office has come to a halt," Madaffer said. "They don't know if they're going to have the right to remain silent one minute or if they can actually have a conversation about issues that are important to conducting the business of the city in the other."

In a statement last week, Madaffer called Aguirre a "rogue prosecutor." In a subsequent interview, he called him a "wannabe FBI agent."

Ewell said Aguirre's investigative approach has made employees wary of a City Attorney's Office that used to represent them when Casey Gwinn held the office for eight years.

"I think it's having a chilling effect," Ewell said recently. "It used to be that you had attorney-client privilege and the (city) attorney was the general counsel for each of the departments."

Friday, in her first interview since Aguirre issued his report, Councilwoman Donna Frye declined to comment on its findings but said the city attorney's efforts will spur the release of a long-delayed audit of the city's books.

She also would not talk about the approach Aguirre has taken in his first two months in office. "My best advice would be for people to just calm down," she said. "I'm not going to engage in this name-calling battle. I don't do that."

Aguirre's relationship with the other council members has unraveled at public and private meetings. Repeatedly, Aguirre has asserted the authority given him by the city charter, and council members have increasingly questioned that role because it's not how Gwinn acted.

At the first council meetings with Aguirre, Mayor Dick Murphy chastised him for speaking out of turn. At a news conference last week, Murphy publicly called Aguirre's allegations "untrue, irresponsible and defamatory."

After attending one council meeting in mid-December, Aguirre rarely has appeared. Instead, Assistant City Attorney Les Girard goes in his place.

That hasn't ended the rancor, however.

At last Monday's meeting, with Girard sitting in for Aguirre, Madaffer said the city attorney should "stay the hell out of the labor negotiations" that the council and city employee unions are poised to begin.

Aguirre said he doesn't attend the meetings "because I'm busy working," and he sends Girard, a longtime presence in the City Attorney's Office, because he's someone the council "is used to and friendly with."

"The real risk is that Mayor Murphy and certain members of the council are going to use the council meetings as tools to defend their behavior to try to insulate themselves from accountability, and I was elected by the people of San Diego to ensure there was an appropriate investigation, and that is exactly what I am going to do," Aguirre said.

In his Wednesday report, Aguirre said the council committed civil violations of federal securities laws by omitting facts about the city's pension deficit from investors in bond disclosures.

Aguirre's report established a spectrum of blame that said Murphy and Peters, both of whom have law and economics degrees, are most responsible for today's fiscal problems and that Frye and Councilwoman Toni Atkins, with lesser educations, are least accountable.

Aguirre said Zucchet and Councilman Tony Young did nothing wrong because they joined the council after the votes in question.

Last week, Atkins questioned the objectivity of Aguirre's report and raised concerns about his approach being at odds with the council. Atkins and Frye were the only council members to endorse Aguirre as city attorney.

"Some of us are being forced into the position to use the city to pay for legal services for us, when we shouldn't have to do that," Atkins said. "We shouldn't be put in that position, but our own city attorney has said he will not represent council members."

Further showing her frustrations, she added, "If I had the ability to not attend council meetings and have someone else come in my place, I might be able to root out all this, too."

Murphy said in statement last week that working with Aguirre has become very difficult because he is "neither credible nor trustworthy."

That's in sharp contrast to comments Murphy made after Aguirre's inaugural speech, when he said they would work together to address the city's problems and ensure a quicker release of a long-delayed fiscal 2003 audit of the city's books as well as an overdue 2004 audit.

Murphy has not ruled out filing a defamation lawsuit against Aguirre, despite a high bar set to defame a public official, and Peters said he is considering lodging a complaint against Aguirre at the State Bar of California for conflict of interest.

"I am not interested in picking a fight with the city attorney," Peters said. "But I am interested in getting to the end of these problems."

Peters said the city needs to release its audits, restore its bond ratings, prepare a new budget by June 30 and conclude labor negotiations, "where not only do we have to hold the line but we have to ask for concessions."

Madaffer said that Aguirre's "antics are slowing down KPMG."

The city's outside auditor, KPMG, said it won't issue a fiscal 2003 audit until the city conducts a thorough investigation into possible securities fraud and accounting irregularities.

For nearly a year, the Securities and Exchange Commission, the U.S. attorney and the FBI have been investigating the city's finances following an acknowledgment that the scope of the city's ballooning pension deficit wasn't revealed to potential investors in municipal bonds.

That deficit is now estimated at nearly $1.4 billion, the city's annual audits for fiscal 2003 and 2004 are overdue, and the city's borrowing ability for new capital construction from sewer projects to fire stations is crippled.

After Aguirre's inaugural address, Councilman Brian Maienschein said he would not judge him "based on one speech, for better or for worse."

This week he said of Aguirre in a news release, "His conclusions are at best premature, and at worst, politically motivated and unethical."

While Aguirre says the wrongdoing needs to be fleshed out for the city to move forward, reservations are growing among council members who say that should be left to the federal investigators.

"If he wants to make it difficult to work together," Madaffer said, "we're just going to accomplish a lot less as a city during a time when we have some very important issues in front of us."

Added Atkins, "We need to be working on these issues together, and it's real clear that's not going to happen, and that's not going to benefit the city."