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A QUESTION OF ETHICS:

DA Transfers Corruption Guy
Excerpt: Voice of San Diego E-MAIL POST
After much fanfare and about 17 months on the job, Patrick O'Toole has been reassigned away from the high profile position he held as District Attorney Bonnie Dumanis' chief in charge of the public integrity unit. You'll remember Dumanis started the unit with a press conference in the spring of 2007.
  She touted the credentials of O'Toole and his colleague, Leon Schorr.
  This was the press conference where Dumanis also announced she wouldn't be endorsing candidates for political office. She didn't want her office to be used as a "pawn" for politicians. The event was a bold stand for clean and accountable public officials. The decision not to endorse candidates was an honorable one meant to keep the stench of politics away from criminal investigations.
  And it stayed that way, of course, until she proceeded to endorse candidates in every single office where her opinion might matter.

  That's another story.

In the interest of balance: Sanders and Aguirre's political contributions.
08/26/07
by Pat Flannery, Blog of San Diego
Excerpt:
The "Voice of San Diego" ran two articles recently on the thorny issue of politicians accepting political contributions while in office, especially from people who have business before the City.  It is a real concern to us all, so I decided to dig a little deeper. FULL ARTICLE

"Of Vu and Seiler's hiring, Cummings said, "It would be difficult to select two more controversial figures." (The smell tests says this is as dirty as it gets, read below articles)
'And that's it'
County dismisses critics of elections—office hiresby

Kelly Davis, City Beat, 5-30-07
http://www.sdcitybeat.com/article.php?id=5798

  In the eyes of voting-integrity activists, San Diego County hit the trifecta this spring.
  It all started in April with the hiring of Michael Vu as San Diego County's new assistant registrar of voters. Vu's most recent job was head of elections for Ohio's Cuyahoga County, where, this past January, two of his deputies were found guilty of tampering with a vote recount in the 2004 presidential election; both received jail time.
A year ago, an audit by an independent elections review board described Vu's handling of Cuyahoga County's May 2006 primary as an "across-the-board failure." A follow-up audit of the November 2006 general election found far fewer problems, but both Vu and assistant registrar Gwen Dillingham resigned in February.
  Vu's new boss is Deborah Seiler, hired by the county in May to replace Registrar Mikel Haas, who was promoted to the department that oversees the registrar's office. Haas was criticized for allowing poll workers to take electronic-voting machines home with them.
  It was Seiler who, as the West Coast sales rep for Diebold Election Systems, sold the county 10,200 touch-screen voting machines for $31 million that had yet to be certified for use by the state. Diebold's also come under fire for the ease with which computer programmers have been able to hack into its machines.
  The Help America Vote Act, passed in 2002 under the auspices of making voting easier for the elderly and disabled, required at least one electronic-voting machine at each polling place by 2006, leading to what journalist Andrew Gumbel (who contributes regularly to CityBeat's sister paper in L.A.) describes in his book Steal This Vote as "a largely unregulated business free-for-all in which the major vendors… ingratiated themselves with local and state elections officials in every way they could think of." In his book, Gumbel details the "revolving door" of elections officials who went to work for these vendors.Rounding out the registrar trio is Mischelle Townsend, who's serving as interim registrar until Seiler starts on June 4. Townsend was Riverside County's registrar of voters until three years ago, when she announced her retirement amid, among other things, controversy about a trip she took to Florida, paid for by Sequoia Voting Systems, where she appeared in a promotional video for the company. Before she retired, Townsend sued former Secretary of State Kevin Shelley after he cracked down on electronic voting, mandating that all e-voting machines produce a voter-verifiable paper trail, a costly addition and something Townsend didn't think was necessary.
  Townsend's time in San Diego hasn't received much attention, likely since no elections have happened under her watch. It was Seiler's appointment that sent an angry crowd to a May 22 Board of Supervisors meeting to protest administrative chief Walt Ekard's decision to bring in Seiler and Vu to run the county's elections.
  "Is San Diego the next Ohio?"
one protestor wanted to know.Samuel Popkin, a UC San Diego professor of political science who's studied voter behavior and who served on the National Research Commission on Elections and Voting—a group of scholars charged with examining issues such as voter trust, access and election administration—found fault with the way Ekard and the Board of Supervisors (Ekard's bosses) have handled public concern about the hirings, especially Vu's."
  I have no idea whether Vu is a good man or a bad man," Popkin said, "but I am stunned that the board presented no evidence of an investigation of the situation [in Ohio]."
  If two of the top people in a corporation are convicted of felonies involving the corporation, before you hire the CEO, you would expect people to explain to you either how this happened on his watch or whether he was part of it," Popkin said. "
  These days, voting is a very touchy subject because of Florida, really, and the idea that you would work in a less-than-transparent manner, it's just hard to understand."
  Shortly after Vu's hiring, Michael Workman, spokesperson for the county, released a statement to the media, saying, "There is no evidence whatsoever from Ohio or anywhere else to suggest Michael Vu has acted in anything other than an honorable and professional fashion." In the one-paragraph statement, Workman referenced media reports that said Vu's two deputies were offered plea deals in exchange for providing evidence that Vu was involved; neither could offer any information.
  When CityBeat tried to contact Ekard to find out how deeply the hiring committee looked into problems with elections in Cuyahoga County, a reporter was directed back to Workman, who said in an e-mail that Ekard's statement at the May 22 meeting would be the final word on the matter: "
 I understand there are those of you who disagree with my hires," Ekard said. "
  I have heard you. I have listened to you. I disagree with you, and that's it."
  Workman said that the majority of San Diego County voters have no problems with the election system here."A handful of very vocal activists are raising the same issues over and over," he said. "
  We care about running successful elections in 2008, not the perception of a handful of outspoken critics." Plus, Workman added, no one with any experience running elections is free from activists' criticism these days.Barbara Cummings, who attended the board meeting last week, said the 2006 election of Debra Bowen as California secretary of state is proof of voters' dissatisfaction with how elections are run. Bowen's currently conducting a full review of the state's electronic-voting machines to make sure they're secure and reliable prior to the February 2008 presidential primary. Some registrars are afraid that she could decertify the machines entirely.
  Of Vu and Seiler's hiring, Cummings said," It would be difficult to select two more controversial figures."
  Kim Alexander, who heads the California Voter Foundation, a nonpartisan organization that follows electronic-voting issues, said that although Seiler is controversial, "she's also one of the most experienced people in California when it comes to election administration."
  Prior to working for Diebold, Seiler was chief of elections under former Secretary of State March Fong Eu. When Eu left office, Seiler went to work for Sequoia Systems before being hired by Diebold as head of West Coast sales. In 2004, Solano County hired Seiler as its elections manager, second in command under the registrar. Like San Diego County, in 2003, Seiler sold Diebold machines to Solano County that had yet to be federally tested or state certified.
 Other counties purchased their electronic-voting machines from other vendors, like Sequoia Systems, which haven't been without problems, either, though Diebold's name is perhaps the most recognized.Secretary of State Shelley ultimately banned the Diebold machines prior to the November 2004 presidential election but not before San Diego County used them in the March 2004 primary. In that election, poll workers at some locations had trouble with the device that activates the cards voters must insert into e-voting machines to call up a ballot. This glitch resulted in just over one-third of polling places opening late."
  You cannot discount the impact of Diebold in all of this," Alexander said. "San Diego selected a vendor that has a troubling history and that has bolstered the critics' concerns and their fears."

New registrar of voters already coming under fire
Ties to vote-machine makers questioned

By Craig Gustafson, Union tribune STAFF WRITER, May 12, 2007
  A former sales representative for Diebold Election Systems – maker of San Diego County's electronic voting machines – has been hired to run elections countywide.
  Deborah Seiler, 57, who is assistant registrar of voters in Solano County, will take over as San Diego County's registrar starting June 4. She will make $150,000 annually.
  Walt Ekard, the county's chief administrative officer, said Seiler's experience will be invaluable as the registrar's office prepares for perhaps its busiest year ever in 2008.
  But Paul Lehto, co-founder of Psephos, a nonprofit group that focuses on election integrity, questioned the hiring of Seiler based on her work with Diebold and Sequoia Pacific Systems, which also makes voting machines.
  “Seiler is known as one of the best PR people or apologists for secret vote-counting that exists in the nation, and she's coming to San Diego County,” Lehto said.
  Seiler's hiring is the second in as many months to raise concern among voting-rights activists who believe electronic voting machines threaten the integrity of the election process.
  Last month, the county hired Michael Vu as assistant registrar of voters.Vu had recently resigned as executive director of elections for Ohio's Cuyahoga County, which includes Cleveland, after a tumultuous, 31⁄2-year tenure that included a disastrous May 2006 primary in which the county began using new electronic voting machines.
  Media reports said many poll workers failed to show up or were ill-prepared to deal with the machines. They also lost dozens of memory cards containing vote counts.Seiler has nearly 30 years of elections experience. She worked for Diebold from 1999 to 2004.
  “I would just hope and trust that people would look at the full extent of my background in elections. . . . I have a good, broad understanding of various voting systems and some of the strengths and weakness of all of those systems,” Seiler said.Seiler also served as a commissioner for the state Fair Political Practices Commission and held various posts in the California Secretary of State's Office.Seiler replaces Mikel Haas, who county officials promoted to deputy chief administrative officer of the Community Services Group in March. He will be Seiler's direct supervisor.

The big news this month is San Diego's hiring of Micheal Vu as the Assistant SD-ROV. Vu is the former Elections Director for Cuyahoga County, Ohio--a county frought with election woes under Vu's leadership.
Also of note:
* Secretary of State Debra Bowen responds to Bruce Sims' complaint against the San Diego ROV
* Attorneys Paul Lehto and Ken Simpkins form a new election integrity group, Psephos

Voting Integrity News The View on Vu On February 6, 2007, Michael Vu resigned his post as Elections Director of Cuyahoga Co., Ohio, amidst a cloud of scandal resulting from a mishandled primary election and more than $12 million in budgetary overruns.
  Two BOE workers have been given 18-month prison sentences for felony convictions stemming from what a government prosecutor called the "rigging" of an officially mandated recount for the 2004 presidential election.
  And now Vu has turned up as the Assistant Registrar of Voters for San Diego. Secure Accurate Elections has devoted an entire page to this hiring debacle on their website, entitled "The View on Vu" , click here for more information, links, and activism. Or cut and paste the following URL into your browser: http://www.secureelections.org/vu.htm Sec'y of State responds to Bruce Sims' complaint against SD-ROV Bruce Sims filed a complaint against the SD-ROV's office in early March of this year. The complaint focuses on the lack of proper logic and accuracy testing, the failure to follow NASED procedures, and breeching the security of the GEMS system, among other serious allegations. A few days ago, Bruce was copied on a letter that Debra Bowen, Secretary of State, sent to Mischelle Townsend (Interim Registrar of Voters for San Diego.) In the letter, Bowen states that the "allegations..are quite serious," then outlines several of the allegations leveled against the SD-ROV and asks Townsend to "provide any information...related to the...allegations." Bowen strongly requests that Townsend respond by May 15. Download a PDF copy of Bowen's letter here , or copy and paste this URL into your browser: http://www.secureelections.org/response.pdf Bruce says he's satisfied with the Secretary of State's actions so far. In a follow-up note to Ms. Bowen, Bruce states that with Vu in the Assistant ROV's position, he's even more concerned about the issues raised in his complaint. Further, he urges Bowen "... to provide clarification regarding why a response from Mischelle Townsend for ‘item 1’ of my complaint was not made...it would seem logical that failure to follow the addendum for ‘ALL voting systems,etc.’ would invalidate the California certification." SAE will keep its readership posted of new information as it develops.
 New voting integrity group, Psephos According to the website for Psephos, created by attorneys Paul Lehto and Ken Simpkins, the group "advocates a return to transparent, secure, verifiable elections where paper ballots are counted by the people." From a recent press release: "Psephos founders include highly acclaimed elections attorney Paul Lehto and Ken Simpkins, a familiar face to those of us following related developments in San Diego. Together, Lehto and Simpkins will champion a range of educational, policy development and litigation efforts related to the procedural integrity of elections, constitutional law and the law & values of democracy. As a nonpartisan organization, Psephos does not support political parties but defends the rights and infrastructures of democracy that make political parties possible. Please join us in this important work to make the infrastructure of democracy strong." Psephos website: http://www.psephos-us.org 
Secure-Accurate-Elections

Judge unseals contested Sunroad warrant
 By ELIZABETH MALLOY, San Diego Daily Transcript, March 29, 2007
A judge agreed Thursday morning to unseal a warrant to search a local developer‚s office after the San Diego Police Department refused to sign it.
 The warrant, issued by the city attorney‚s office, is linked to an investigation of Sunroad Enterprises. City Attorney Michael Aguirre claims the company has been illegally attempting to construct an office building near Montgomery Field that is too high, violating Federal Aviation Authority standards.

 The city attorney‚s office argued against unsealing the warrant, but ultimately Judge George W. Woody Clark agreed with attorneys for Sunroad, company President Tom Story and Copley News, the company that owns The San Diego Union-Tribune. Those attorneys argued it was in the public interest to unseal the warrant.
 After the warrant was unsealed, Aguirre told reporters that he is investigating alleged illegal lobbying by Story. A former chief of staff for Mayor Dick Murphy, Story went to work for Sunroad in November of 2005, several months after leaving City Hall, according to Aguirre. Municipal lobbying laws prevent any government official from lobbying for a year after leaving his or her job with the government.
 Aguirre said he has e-mails, memos and interviews that prove Story lobbied the Department of Development Services (DDS), of which he was once in charge, to get permits approved for the Sunrise office building.
The warrant is scheduled to be released at some point Thursday afternoon. Aguirre said it implicates several members of the DDS. In court Thursday morning, Assistant City Attorney Christopher Morris argued that the warrant should remain sealed in part to protect those employees‚ identities. When meeting with reporters, Aguirre specifically mentioned DDS Director Marcela Escobar Eck, Assistant Director Kelly Broughton and staff member John Cruz as having been lobbied by Story.
 In court, Sunroad‚s attorney Michael Attanasio, of the firm Cooley Godward Kronish, LLP, said that Sunroad found about the warrant when a reporter called the office asking for comment. Aguirre alleged that someone from the Police Department alerted the press about the warrant, after deciding not to serve it, in order to indirectly warn Sunroad.
Police Chief William Lansdowne is out of town until next week, according to an employee in the police department‚s media relations office, and the department had no comment until he returns.
The Daily Transcript will continue to follow this story as it progresses.

A very ineresting, enlightening conversation on  KOGO this date between Hedgecock and Sanders.
  Roger questioned Sanders about the warrant issue between the City Attorney and the Chief of Police.
  If you recall, Lansdowne refused to execute a Search Warrant for the purpose of searching records of Sunroad Construction. 

  Sunroad, in constructing a building at Montgomery Airfield are alleged by Aguirreto have violated San Diego building code and FAA instructions byconstructing such building two stories higher than permitted.
  Aguirre presented the Warrant to Lansdowne for service.  Lansdowne refused to serve the warrant stating that there was no probable cause to do so. Sanders, as you know, a prior Police Chief, agreed with Lansdowne's decision to not serve Sunroad. This, now a moot point because Sunroad voluntarily presented Aguirre with the documents Aguirre wanted.
  The point is, however, that Sanders should brush up on requirements of the law, as should Lansdowne (if he did indeed make the negative decision on his own).
  The Warrant in question was legally signed by a Superior Court Judge who did not question the probable cause required by the fourth amendment to the Constitution of the United States of America. By placing his signature on the Warrant he was also DIRECTING that the document be SERVED BY A LAW ENFORCEMENT OFFICER.,
  It is apparent that by refusing to serve a legitimate Warrant, Lansdowne refused and questioned the directions of a Superior Court Judge and deliberately disobeyed the instructions of the San Diego City Attorney. 
 I find it strange that Sanders always speaks for the Police Department.Where is Lansdowne?  He is the Chief of Police, not Sanders and even though Lansdowne serves at the will of the Mayor, the Mayor seems no to trust Lansdowne to speak for himself and his department.
  The statement supra reinforces the information that City employees are not permitted to discuss City matters without Sanders' permission.  —Peter DiRenza, MS, MA

Young's Fine Affords Glimpse Into Campaign Dollars
By EVAN McLAUGHLIN, Voice Staff Writer, March 15, 2007
 Drive north through the cluttered heart of Mission Valley's shopping malls, condos and big-box retailers and discover an expansive 224-acre quarry where Vulcan Materials Co. mines sand and gravel. There, Sudberry Properties wants to develop the rock mines into Quarry Falls, a 3,000-home neighborhood equipped with parklands, offices and shops.
 Ethics EnforcementThe Issue: City Councilman Tony Young was fined $10,000 last week for failing to timely pay "win bonuses" promised to two campaign staffers after the 2005 election and for raising money for more than a year after the election.
  What it Means: The election law Young broke was created to draw a line between donations used to elect a candidate and those that are used to curry favor with a sitting official.
The Bigger Picture:
The Ethics Commission's ruling insinuates that post-deadline donors could be seen as having gained an advantage because they helped a politician out of a bind.
 To lay the foundations at Quarry Falls, the developer will need more than just the concrete that is mined in places like Mission Valley. It must also win the City Council's approval to rezone the area for residential use before minivans can replace the dump trucks that currently flow in an out of the area.
  To do so, Sudberry has taken a traditional route for navigating policy at City Hall: Hiring a cache of lobbyists to advocate to city officials on behalf the project, and writing the occasional check to an elected official's campaign.But when the Ethics Commission slapped City Councilman Tony Young with a $10,000 fine last week, the panel decided the campaign checks Sudberry and scores of other political donors penned for Young broke city election laws that forbade fundraising beyond 90 days after an election. The purpose of the law: to ensure that campaign contributions are more about aiding a candidacy and less about currying favor from an elected official.
  Young solicited and accepted contributions for up to 18 months after his January 2005 election to rid himself of an expensive bind.Young's fine came as a result of his inability to pay $30,000 in "win bonuses" owed to two former campaign staffers within 90 days of that election. With the bulk of that tab remaining when the April 4, 2005 deadline arrived, Young continued to raise $47,635 up through June 2006. At some point, the commission believes, the money that flowed into Young's coffers after the election couldn't have helped him reach voters who filed into neighborhood polling places several months earlier. Full Story

Exploring the Liberty Station deal, the city and the developer
Letter to Editor Union-Tribune, Regarding “Watchdog report/Who profits from Liberty Station” (A1, March 3-4):
  Kudos to Brooke Williams, Agustin Armendariz and Maureen Magee for their excellent reporting on the Liberty Station story.
  Liberty Station is just another story of corporate leaders violating the public's trust in their efforts to “get to the grave in style.”
 The conduct of the McMillin Cos. is both shocking and sickening. Based upon what I read, I hope that prosecutors, at all levels of government, initiate grand jury investigations of the developer and public officials involved in this exploitation of “free” federal property.

  To quote singer/songwriter Don Henley: “A man with a briefcase can steal millions more than any man with a gun.
—ROBERT ZITSMAN, San Diego

WATCHDOG REPORT
WHO PROFITS FROM LIBERTY STATION
Boom for McMillin, bust for city

By Brooke Williams, Agustin Armendariz & Maureen Magee
Union-Tribune STAFF WRITERS, March 3, 2007
Excerpt: Nearly seven years ago, San Diego turned over 235 acres in Point Loma to The Corky McMillin Cos. in exchange for a split of profits and the commitment to transform an old Navy boot camp into a new community.
  Homes, shops, schools, a 46-acre park and the start of an arts district have sprouted at the former Naval Training Center, but the city doesn't expect to see a dime from a 50-50 split the late Corky McMillin promised.
Excerpt: “The contract did not protect the city's interests,” Aguirre said earlier this week. “McMillin got all the profits, we got the liability.”
Excerpt:
Corky McMillin had gained clout with council members from working on public projects in their districts. His company's executives together were among the top contributors to mayoral and City Council campaigns in the previous seven years. Five months earlier the council had declared a “McMillin Companies Day.” As the vote neared, then-Mayor Susan Golding grilled executives of both companies on their ability to influence Congress to change federal law that could kill the project. The cash-strapped city needed one last push in Washington to make sure it wouldn't have to pay the Navy for the land.
  One of the city's lobbyists in Washington, D.C., former Rep. Bill Lowery of San Diego, already was fighting to get a provision in a spending bill that would allow local governments to get surplus military land for free if it was used to create new jobs and fill the economic gap caused by a base closure.
Excerpt: I have made a career out of being very well-connected with the local representatives in Washington, D.C.,” he told council members. “It's going to be relatively simple to get that through the process.”
McMillin didn't mention that his company's vice president of acquisitions was James Hunter, whose brother, local Rep. Duncan Hunter, had co-authored a letter to council members several weeks earlier, urging them to keep McMillin Cos. in the running for the NTC project. Hunter and two other congressmen sent the letter on the same day the city was poised to begin exclusive negotiations with Lennar. Duncan Hunter, who was chairman of the military procurement subcommittee, helped to draft the bill that carried the no-cost provision for military land. The legislation was controversial because the Defense Department stood to make billions of dollars selling surplus land. It opened a window of time during which San Diego and 20 other municipalities got land for free from the Navy.
Rep. Brian Bilbray, then representing South County and also a co-author of the letter, sent his district director, Greg Stein, to the City Council meeting that day to support McMillin Cos. and to thank council members for giving “due consideration to the local developer.”
Excerpt: Former Rep. Randy “Duke” Cunningham was also a co-author of the letter.

  Hunter could not return calls seeking an explanation because he was busy campaigning for the presidency, his spokesman said.
  As the council prepared to vote, the mayor and council members' questions turned from influence to money: Would taxpayers be on the hook for the project? And would the city share in any of the profits?
  Only McMillin would commit to not using tax dollars and to a formula for splitting the profits down the middle. Lennar's Santos told the council Lennar was willing to share profits with the city but couldn't say how much.The council, which has turned over completely since then, voted 7-2 to go with McMillin Cos.
Excerpt: “The whole profit thing, that really wasn't the focus or the point,” said Marcela Escobar-Eck, director of the Development Services Department. “It was to redevelop it from a closed base to a vibrant center, and that's what it has become.”
 FULL ARTICLE

More on NTC: http://www.ntcsd.org

So, James and Duncan Hunter crafted the NTC deal. Duncan is now working on the Navy Broadway Complex giveaway. Below article is a profile on the many other questionable legal activities of Duncan Hunter. How far is he going to be allowed to go?
— Watchdog
TOP 10 Reasons to Go Dunkin' with Duncan 

WORLD EXCLUSIVE, Nov 1 2006--Venice FL., by Daniel Hopsicker
Excerpts: Not since Richard Nixon has a man matched the zeitgeist of the times as perfectly as does Republican Rep. Duncan Hunter, who just announced a run for the White House in 2008.
  The knee-jerk ‘pooh-pooh birds’ in the ‘negative nabob crowd’ are missing some good reasons--and some good laughs as well--for paying close attention to this Republican Representative from a suburb of San Diego.
  Actually, they may be missing ten good reasons...No kidding... He could teach us all... a lot.Top 10 Reasons To Go Dunkin’ with Duncan: ...
7. Can Teach Us “Chutzpah for Gentiles
  ”He’s currently under investigation by the FBI for helping loot the U.S. Treasury of as much as $190 million for Defense contracts the Pentagon never asked for, and didn’t want.The money went to ADCS instead of projects for the Army's UH-60 Black Hawk helicopter, Air Force bases, and a parts center in Oklahoma, according to the report by the Pentagon inspector general, prompted by a request from a Defense official.So, what’s he do? Announce that he's... resigning?
No way, Jose... he’s running for President!..
6. Helped San Diego become Corruption Capital of America... from Scratch!
  Anyone can excel at semi-organized crime in a place like Brooklyn or Detroit. But San Diego has long been known as “Iowa with a beach.”
  To go from there to its current lofty status as a place with Congressman on the take from Defense Contractors on the loose in a bankrupt city that can’t seem to elect a Mayor that can remain un-indicted...
 A billion dollar pension shortfall...Rogue contractors like Titan Corp bribing everything that moves
... no wonder it's a place where Bobby Inman’s SAIC can feel right at home!Sure he had help… but Duncan was there!

5. Could help laid-off American workers retrain for white collar crime.

  Unless you count the hookers in Brent Wilke’s hospitality suite, Duncan Hunter’s coziest relationship has long been with his biggest campaign contributor, defense contractor Titan Corp., which issued a press release in 2004 announcing they were purchasing a half-billion dollars worth of a product that didn't exist from a company about to go bankrupt, whose excited investors were soon left holding the bag.
 
That's genius!
  “SkyWay Communications Holdings Corp Announces New Business Strategy as the Result of Agreement with Major US Defense Contractor,” read the press release headline.
  "We are excited about the possibilities Sky Way Aircraft System technology offers," said Titan's David Stinson.”But here's the beauty part...Before signing on with Titan the excited Mr. Stinson was the executive vice president of Intergraph in Annapolis Maryland, which had an Original Equipment Manufacturer (OEM) deal with Brent Wilke’s ADCS Inc. that first opened the money spigot now being investigated by the FBI.
  Why this is important is our no. 4 reason we like Duncan...
4. Can help ordinary Americans get shot at big bucks in drug trafficking.Titan officials have never explained why a billion dollar defense contractor with sensitive government defense and intelligence contracts loaned its name and prestige to a soon-to-be-bankrupt firm whose owners were at that moment stripping it of everything not nailed down, and painting DC9’s to impersonate U.S. Homeland Security planes.
  Skyway Aircraft, the shadowy St. Petersburg FL company whose investors Titan Corporation helped defraud with a press release announcing the purchase of as much as a half billion dollars worth of the company’s non-existent product…just before it went under… also owned a DC9 dubbed "Cocaine One" which was busted in Mexico in April of this year with 5.5 tons of cocaine onboard!
Criminal diversification!
Duncan knows how its done.

3.Can’t Say "You Don’t Know Jack"...And Dana!

  A Lear jet used by Cunningham and DeLay was paid for using money "passed through" to San Diego "businessman" Wilkes. DeLay flew from Dulles Airport in Washington D.C., to John Wayne Airport in Orange County, for example, to appear at a campaign dinner for Rep. Dana Rohrabacher, R-Huntington Beach.
Dana Rohrabacher gave a sterling personal recommendation, to Adam Kidan, the "dunsky (John Gotti's phrase) about to be indicted for paying for the brutal murder of Sun Cruz Casino Line owner Gus Boulis... with a check.
  Rohrabacher was there when the cult first began to do business as The Enterprise, in Angola, for example, with Jack Abramoff... and Oliver North.
  And Duncan's on a first name basis with them all!

2. Won’t Rest on His LaurelsThe allegations of corporate lawlessness being leveled against Titan Corp. are unprecedented for a mid-sized defense contractor, on a scale not seen since the Lockheed bribery scandals of the 1970’s.
 Now Titan Corp has been purchased by even-larger Defense firm L3 Corporation, a leading provider of Intelligence, Surveillance and Reconnaissance systems to the Department of Defense, Department of Homeland Security, selected U.S. Government intelligence agencies and aerospace prime contractors.
  With Duncan Hunter leading the way… there’s room for growth!
  And the Number One Reason to Go Dunkin with Duncan...
1. "Knows How to Play the Game."In a deal with Brent Wilke’s ADCS Inc. currently being “investigated” (until the heat dies down) by the FBI, Duncan taught a naive contractor how to inflate the price of software that cost $6000 per copy and charge the Pentagon more than five times more than the vendor was asking!
 The deal Hunter brokered resulted--not just in massive mark-ups--but massive mark-ups on a product the Pentagon never even wanted or asked for!“
˜  John Karpovich, who helped run the document conversion program at the Defense Department before his retirement, said Wilkes infuriated Pentagon staff by claiming that the document conversion money belonged to him,” reported the Washington Post."Brent came in and said, 'That's our money,"
' Karpovich recalled. "He said, 'The congressmen put the money in there for us."
  'Karpovich told us he’d watched the deal being put together by Bent Wilkes, House Armed Services Chairman Duncan Hunter, and the just-deposed No. 3 man at the CIA, Dusty Foggo.
  “Brent called me said he heard the product was great, and asked me to meet him in Washington. He had a suite at the Watergate. We met there and went to dinner with Dusty Foggo. He seemed like a sharp guy, at least he knew the inside of the government pretty well. We went to dinner with Dusty, and he and Brent talked about old times.”
  Karpovich was castigated by Duncan Hunter, he told us, for trying to sell the software to the Pentagon too cheaply.
  “In the meeting Duncan Hunter pointed to me and said to Wilkes, "Your boy doesn’t know how to play the game,'" said Karpovich.“They took a $6000 product, gave it another name, and sold it to the defense department for $32000 a pop.”
"Later on we began to get calls from military bases around the country," said Karpovich.“They were saying, hey, we just got this expensive software. What are we supposed to do with it?”
What a resourceful guy like Duncan would say: “Use it to armor your humvees!”.. Full Article: http://www.madcowprod.com/11012006.htm

GOING TO BABYLON BY CADILLAC
Was San Diego US Attorney fired for knowing too much?
WORLD EXCLUSIVE, March 8 2007, by Daniel Hopsicker        
  The Randy Cunningham "Hookergate" Scandal is not the first prostitution scandal involving close relatives of indicted defense contractor Brent Wilkes, The MadCowMorningNews has learned. Brent Wilkes brother, Gregory Wilkes, managed the finances of The Wilkes Foundation, which was suspended by the State of California after failing to file financial statements for three years in a row.
 (NOTE: The Wilkes Foundation link above, to the Wayback machine archived page on Gregory Wilkes, was removed less than 24 hours after this story was published. If only they worked this fast taking care of soldiers with traumatic brain injuries. DH)
  When Greg Wilkes wasn't busy failing to file required documents with the state on his brother's charitable foundation, he was the Controller for an unfortunate "Bush Pioneer" named R.D. Hubbard, busted flying almost a dozen hookers by private jet in June of 2001 to a casino he owned to service men government documents have only identified as “48 wealthy guests.”
Full Article: http://www.madcowprod.com/03082007.html

Legal Bills Total $2.3M
<http://www.voiceofsandiego.org/articles/2007/03/08/this_just_in/788legalbills.txt> Members of the City Council have billed the city more than $2.3 million since 2005 for their legal representation through the course of federal investigations and pension litigation, according to city records.
Here's how it breaks down:
Councilman Jim Madaffer: $461,746.15 (through January)
Councilwoman Toni Atkins: $555,769.31 (through December)
Councilman Brian Maienschein: $475,094 (through December)
Former Mayor Dick Murphy: $395,376.73
(through August, plus $5,324.26 for blacking out the bills)
Councilman Scott Peters: $397,368.28
(through August, plus $3,899.37 for blacking out the bills)
Former Councilman Ralph Inzunza: $10,649.92
Former Councilman Michael Zucchet: $6,650

 The release of bills for Peters for September through January has been delayed. Councilwoman Donna Frye -- the remaining council member who sat on the council in 2002 and 2003, when the actions under investigation took place -- has paid for her own legal representation.
 The Department of Justice's investigation into City Hall culminated with the indictment of five pension officials in early 2006.
 According to previously released invoices, attorneys for the council members have made a number of presentations to the Securities and Exchange Commission. The SEC has settled with the city of San Diego, but has said that investigations into individuals continue.
Click here for the latest story on the details found in the bills: <http://www.voiceofsandiego.org/articles/2007/03/07/government/789bills022407.txt>  —ANDREW DONOHUE <mailto:andrew.donohue@voiceofsandiego.org>

White-Collar is In
  District Attorney Bonnie Dumanis is scheduled tomorrow to announce the creation of a Public Integrity Unit "aimed at reducing political corruption in San Diego County.
  "The announcement comes a day after the FBI set up an anti-corruption hotline (877-NO BRIBE).
  All these efforts come after a prolific couple of years of corruption-related prosecution in the county, an effort led by Carol Lam, who was forced out earlier this month.
-- ANDREW DONOHUE, February 28 -- 5:20 pm

Time to Cut the Economic Development Corp.
Jan. 24, 2007,voiceofsandiego.org
 Ask the San Diego Regional Economic Development Corp.'s what its best recent accomplishment was and its representatives will tell you about the campaign they ran to attract the headquarters of the agency created by California's $3 billion stem cell initiative.
  They'll describe with any number of superlatives how wonderful of an operation it was and how it was an example of the "power of collaboration" among San Diego's wealthiest citizens and corporations.
  It would seem to have been a great success.
  Unfortunately, however, it wasn't.The committee that made the decision on where to site the headquarters for the potentially powerful institution chose the Bay Area."It was unsuccessful, but many people thought of it as a win," CEO Julie Meier Wright told us.
  Ironically, in their own operations, businesspeople rarely see such results as "wins."
  The Economic Development Corp., or EDC, received just more than $1 million last year from the city of San Diego. While gripes about the taxpayer funding of the agency -- and the bloated salary of its CEO -- have come up in the past, the city's troubling financial position and the lack of valuable production from EDC makes this the time for real change.
  The effort to attract new jobs and enterprises to the region may indeed be worthy of an investment from taxpayers, but only if it is administered in the most efficient way possible.
  It is not clear that this is the case now. Not only is the city facing a financial crisis, but EDC has not had much success -- nor placed much emphasis on -- luring new businesses to San Diego.
  At the same time, the city is paying other employees to itself lure businesses to the city. The mayor's Business Expansion, Attraction and Retention team was created, it seems, to fill the void EDC left when it decided long ago that it would focus on influencing local policy debates instead of bringing new jobs to the region.
  Businesses can and should influence local government decisions. But they don't need more than $1 million in taxpayer funds every year to help with their efforts.Finally, when the San Diego Regional Chamber of Commerce hired its new CEO just a few weeks ago, it sent a number of different signals that it was going to be engaging in the kinds of efforts that has defined the work of EDC for the past several years.
  Chamber CEO Ruben Barrales told us something important recently: "In a place like California or San Diego specifically you need to have constant attention on growing the economy and attracting businesses."
  The chamber's board members described Barrales' mandate to "create jobs" locally and lobby Sacramento and Washington D.C. -- the two efforts that are supposed to be at the core of EDC's mission.
  In short, the private sector prides itself on its ability to recognize economies of scale and enforce efficiency on operations. Yet the city, the chamber and EDC's efforts are clearly overlapping. The chamber and EDC, for example, both have set up task forces to look into issues regarding the Chargers' search for a new stadium. It's certainly not a coincidence that neither has produced anything.
  This overlap would not be worrisome if EDC had strong list of accomplishments to which it could point.
  Unfortunately, EDC's list is aging and many of the achievements it highlights are questionable.EDC claims it was instrumental in protecting local military bases from the federal government's base closure process.  That is, it says, its most important accomplishment in the last several years. Many people in the city, even EDC's harshest critics, do give the agency credit for the effort. But the bulk of those activities took place in 2004. And they were undermined when EDC, after begging the military to recognize the value of Marine Corps Air Station Miramar, bizarrely and meekly endorsed a plan to try to force the Marines to dramatically alter their activities at the base to make room for a commercial airport.
  The last supposedly successful project to which EDC representatives point as evidence of the organization's continuing benefit to the region is an ad campaign launched last year dubbed "San Diego Works." Designed to combat the negative headlines that the city's financial crisis had provoked around the nation, the EDC campaign took cheery slogans to the country's largest newspapers and magazines along with pictures of happy business people. Though nothing, in effect, had changed about the city's financial condition -- in fact, the mayor says he sees things are worse now -- the agency saw spin and damage control as its job.The list of accomplishments for an agency like EDC should be more simple and obvious.
  But it's not.The mayor and City Council should move to eliminate the $1 million EDC receives each year.
  There have been murmurings of such an effort in the past, when the salary of EDC's Meier Wright became the subject of local news reports.
  Many bemoaned the spike in her compensation package that had earned her more than $515,000 in 2001 -- an exorbitant amount, critics thought, for an official of an organization that received so many tax dollars.
 Since then, the taxpayer contribution to the agency has been cut and EDC has tried to demonstrate that her salary no longer comes from public funds.
  Like the agency's public relations initiatives, that argument is not very substantive. An agency's board makes salary determinations based on its entire budget. It's hard to imagine that without the city's investment, the board would still decide to pay its executive so high a proportion of its budget. Meier Wright recently refused to disclose her compensation, saying it is no longer public information and nowhere near the previously reported levels. But a quick search of the latest available public records show that she earned nearly than $455,000 in salary and retirement contributions in the 2005 fiscal year. If this were a private organization funded with private contributions, this information would not be a subject of public concern. But if an organization needs substantial public dollars to continue its work, as EDC argues it does, it must also face the scrutiny that all city departments are under right now.
 
The mayor has been investigating all city departments to ensure that there is no overlap in responsibilities and that the job can't be done more efficiently. EDC's positioning and list of accomplishments over the last two years wouldn't look very good under such scrutiny.
  The city will need to solve an $87 million budget deficit this year. As the City Council and mayor search for savings, they'll find an easy target for cuts in EDC.With the mayor investing other city funds in the effort to attract businesses to San Diego, it seems time to remove the generous public subsidy and let the market shape EDC as it may. Cutting it off from public funds would force local businesses to decide whether they want to keep paying hefty dues into both EDC and the chamber, whose efforts overlap, or produce a more efficient way to not only advocate for the interests of businesses locally but attract new ones to town as well.
  The chamber should consider re-branding itself into a new broad-based advocacy group that had the economic development of the region as one of its missions.
  But only after cutting the taxpayer contributions, and provoking a near-total reorganization of the business community's efforts, should the city consider reinvesting in them. Right now it is putting scarce taxpayer dollars into EDC for economic development and getting little more in return than another lobbyist at its door.

SEC: San Diego Committed Fraud
Voiceofsandiego,
ANDREW DONOHUE, Nov. 14, 2006
  The Securities and Exchange Commission today sanctioned the city of San Diego on securities fraud violations for failing in 2002 and 2003 to disclose important information to investors regarding its looming pension and retiree health care obligations.
 I n a settlement, reached by City Attorney Mike Aguirre and approved by the City Council, the city agreed to cease and desist its past practices and be monitored by an outside consultant for three years "to foster compliance with its disclosure obligations under federal securities laws," according to an SEC statement.

 The announcement draws to a close one facet of the SEC's two-and-a-half year investigation into the veracity of City Hall's financial reporting. However, in its statement, the SEC indicated that its investigation into San Diego's municipal meltdown is continuing.
 "The Commission's investigation is ongoing as to individuals and other entities that may have violated the federal securities laws," the statement reads.
 The order issued by the SEC found that the city failed to disclose that its pension deficit was projected to increase dramatically to $2 billion by 2009 and that its retiree health care liability was projected at $1.1 million. The SEC found that the city also failed to disclose that it had been intentionally underfunding its pension system "so that it could increase pension benefits but defer the costs" and that it "would face severe difficulty funding its future ... obligations unless new revenues were obtained, pension and health care benefits were reduced, or city services were cut."
 The order found the city, through its officials, committed securities fraud by knowingly or recklessly allowing the release of materially misleading information.
 City officials have scheduled a press conference this morning to address the settlement. 
"San Diego's misconduct jeopardized the interests of its citizens, its current and future retirees, and those who placed their trust in the City's bonds as an investment," said Randall R. Less, the SEC's regional director.
Read the SEC order here <http://www.voiceofsandiego.org/pdf/SECsandiego.pdf> . Check back soon for an expanded version of this story & continual updates.

Mayor sells La Jolla land at a discount, court papers show;
neighbors call it backroom dealing

by Eric Wolff, CITYBEAT, Nov. 2, 2006
Excerpt: High-level staff in the office of San Diego Mayor Jerry Sanders influenced the discounted sale of city land in La Jolla to a Jewish student organization, according to documents filed in court last week.
  The filings accuse Jim Waring, Sanders’ deputy chief operating officer for land use, of compelling an appraiser to reduce the price of the property by more than $400,000 at the behest of the mayor himself. The deal raises questions about whether the mayor violated city policies governing discounted land sales.
  UCSD Hillel, the student group, wants to build a community center on a three-quarter-acre parcel of land at the corner of La Jolla Scenic Drive and La Jolla Village Drive. Negotiations for the property have dragged on for years, starting back in 2000. In early appraisal, an appraiser set the value of the land at $1.1 million, but then reduced it to compensate for work Hillel would have to do, such as moving sewer lines and building sidewalks. The sale price then became $780,000.
Full Article:
http://www.sdcitybeat.com/article.php?id=4980

2006 VOTE
After $50,000 donation, waterfront deal advanced
Sanders, developer say no favors traded

By Matthew T. Hall, , Union-Tribune, October 28, 2006
 Anxious from the start about resistance from organized labor, business backers have pumped nearly $1 million into Mayor Jerry Sanders' ballot measure campaign to let private contractors compete for everyday city work.  
  The largest donation so far is from developer Doug Manchester, whose $50,000 to a local political action committee this month was redirected as part of a $70,000 check to the Yes on Propositions B and C campaign.The developer made the donation a week before Sanders' staff removed a big hurdle for Manchester's controversial Navy waterfront deal.

  Yesterday, Sanders and Manchester both said there was “absolutely not” any favor trading going on between them, and they bristled at questions about the appearance of it.
  Civic activist Norma Damashek said it “sure looks like” a quid pro quo although she doesn't know for sure.
  The Proposition C critic's chief concern is outsiders landing city contracts after giving money to political campaigns.“If something looks bad, if something has all the characteristics of quid pro quo, then it's something the mayor should be avoiding,” said Damashek, vice president of public policy for the local League of Women Voters.
  Sanders has coated a pair of San Diego ballot measures in his political capital and calls them crucial. Proposition B would require voter approval for certain future pension benefit increases for the next 15 years.
  Proposition C would allow city civil service jobs to be outsourced to private contractors.
  On Oct. 13, Manchester Resorts gave $50,000 to a fundraising committee of the Lincoln Club of San Diego County, a Republican business organization that has long been active in politics. It was Manchester's second large contribution to the committee this year, after a $10,000 donation a month earlier, and it was the largest contribution to the club in 2006 by far.
  Then on Oct. 17, the Lincoln Club contributed $70,000 to Sanders' campaign for Propositions B and C.
  Two days later, one of Sanders' development services directors issued a report that concluded that no further environmental review was needed before Manchester's Navy Broadway Complex deal could proceed.
 Critics have said that the existing studies, dating to 1990, are out of date and that more review should be done. Manchester's redevelopment deal with the Navy seemed in jeopardy until it got recent boosts from the city and its redevelopment arm, the Centre City Development Corp., which allowed a lease to be executed between the developer and the government.In dismissing the issue yesterday, Sanders distanced himself from the contribution. The mayor acknowledged he is the public face of the campaign in mail and TV commercials. But he said he has zero control over the campaign, which is run by Tom Shepard, who managed Sanders' mayoral campaign last year.
  Sanders and Manchester also brushed off questions about appearances.“I don't think anyone can draw an inference on that,” Sanders said. “He gave the money to the Lincoln Club. It is what it is.”Manchester said he gave the money to a third party on an understanding that it “would contribute heavily to this proposal” while knowing that “they were free to make the decision.”
  “I certainly did not have any discussions whatsoever about any support on the Navy project in lieu of the contribution,” Manchester said.University of San Diego School of Law ethics expert Robert Fellmeth, an advocate for public financing of political campaigns, said there would be nothing subtle about any quid pro quo here because the timing of the transfers can be tracked so easily.
  “The best argument they have that they're telling the truth is that if we wanted to do it deceitfully we'd arrange this thing and have the money change hands after the election,” he said.Manchester supported businessman Steve Francis in last year's mayoral election. Now, Francis and Sanders are allies in the mayor's push to pass Propositions B and C.
  Francis is one of the effort's most active contributors.
  He has donated nearly $64,000, most of it this month for radio advertising. Francis and another businessman, Carl DeMaio, pushed hard to get the outsourcing measure on the ballot, threatening a signature drive to go around Sanders until the mayor took up the cause on his own earlier this year.DeMaio, president of The Performance Institute, a business that advocates government efficiency, established a campaign committee that has contributed nearly $22,000 to Sanders' effort, mostly for mail.
  The largest donors are political action committees. The San Diego Lodging Industry PAC gave nearly $50,000; the Builders, Associates, Contractors PAC, $45,000; and the San Diego Restaurant and Beverage PAC, $35,000.While the pro side's contributions and campaign costs will surpass $1 million any day now, opponents are waiting until the campaign's final days to show their hand financially. Records show they have amassed about $100,000.
  Led mainly by local union leaders, opponents are ramping up a fundraising drive of their own to defeat Proposition C, even as they concede that a challenge to Proposition B would likely fail.Opponents' largest contributions to date are $44,000 from the American Federation of State, County and Municipal Employees Union; $30,000 from the San Diego-Imperial Counties Labor Council's fundraising committee; and $5,000 from the city firefighters union. An effort is under way to raise hundreds of thousands of dollars from one or more labor groups outside San Diego to fund a competing TV campaign.
  Sanders has packaged the propositions together and is telling voters they will allow him to “reform City Hall.” The local police and firefighter unions have led a late charge against Proposition C, in recent weeks, challenging it on the grounds that the measure doesn't exempt sworn public safety personnel.
  As the opposition grew emboldened by what they saw as a vulnerability, Sanders sought to reassure voters that those jobs were safe. He has gone as far as proposing a related ballot measure for June 2008 – the city's next general election – to specifically exempt those positions from Proposition C.

An outrageous denial of the public's rights.
by Pat Flannery, 10/22/06
 This letter was sent out to all members of the CPC (Community Planners Committee) i.e. all the 40 odd CPG Chairs - (Community Planning Groups), canceling the regularly scheduled monthly meeting on Tuesday October 24, 2006.
  The writer, Betsy McCullough, Deputy Planning Director, says: "After consulting with the CPC Chair, therefore, we are canceling the October meeting". She can't do that.

  Not according to the CPC ByLaws:"ARTICLE VII MEETINGS
Section 1 Regular monthly meetings, except in August and December, shall be held at a location within the City of San Diego. CPC shall establish a regular monthly meeting date. A majority of the representatives or alternates present at a CPC meeting may vote to cancel the following month’s meeting."

The Only Thing Strong About Sanders is the SMELL!
Sanders Hands Over the PRIME City Real Estate Assets
Dept. to the brokerage firm of Grubb & Ellis... Who were fined for Ethics Violations!
Now lets get this right… Grubb & Ellis in charge of the Cities Real Estate Holdings and is designing the plans for how the cities development oversight, permiting and redevelopment agencies should be run?
 At the same time Sanders is going to appoint a new group of Housing/Building Interests to re-do the housing element plan?
Gee, do you think Sanders and our City are owned by the Building Industry?

Breaking Stories: Jerry's Brokers
By Matt Potter, Reader City Lights, Sept. 14, 2006
  San Diego mayor Jerry Sanders has finally picked a long-awaited high-dollar consultant to help him restructure the city's Real Estate Assets Department. And the winner is: the brokerage firm of Grubb & Ellis.
  That's according to the City's Jim Anthony, who says he expects G&E to dig right into the trouble-filled department and come up with a report by sometime around Thanksgiving. According to city documents, the so-called Real Estate Service Provider will "provide the review and analysis required to recommend improvements to the Real Estate Asset Department's organizational structure, management practices, business processes, and operations.
  The RESP shall provide recommendations to maintain or improve upon the transparency, professionalism and sound business practices of READ while enabling the achievement of fiscal and community policy goals." Whatever. Taxpayers will fork over $250,000 to the company.
  Losing applicants for the job, says Anthony, were Chicago-based Equis, CB Richard Ellis, and Gensler. Insiders say the contract is only the first step toward outsourcing most or all municipal real estate management to local real estate dealers, many of whom contributed heavily to the mayor's campaign kitty.-
The "Union-Tribune" gives Sanders cover by ignoring Grubb & Ellis the cities Real Estate Assets Mega-Conflict deal by focusing on other violations!
Mayor's backers are fined, Ethics panel finds no evidence that Sanders knew of activity
By Craig Gustafson, Union-Tribune STAFF WRITER, Sept.19, 2006
  San Diego's Ethics Commission levied $25,000 in fines yesterday, including the largest penalty in its history, against supporters of Jerry Sanders' bid for mayor last year.
  The city commission found two businesses laundered money to contribute to his campaign, and a Republican fundraiser illegally distributed a mailer on Sanders' behalf to about 39,000 residents.
  The commission found no evidence that Sanders or his campaign knew about the illegal activity.Combined, the fines represent the single-largest enforcement action the commission has taken and monetarily equals nearly one-fourth of the total penalties issued in the agency's five-year history.
  Those fined yesterday: Scott Hart, treasurer of Continuing the Republican Revolution, who was fined $17,000 for collecting money from some of Sanders' key supporters so his group could send a slate mailer to residents just four days before the July 26 special mayoral election. He accepted 12 contributions ranging from $1,000 to $5,000.Under state law, slate mailers are required to show support or opposition for at least four ballot measures or candidates. Hart's mailer supported three, with Sanders prominently featured on 75 percent of the brochure.
  Since it wasn't legally a slate mailer, he could only accept $300 from each company or individual under city law.Santa Ana-based Sukut Construction, which has an office in Oceanside, and its division president, Mike Zanaboni, were fined a total of $5,000 for reimbursing three employees for contributing $900 to Sanders' campaign.Grubb & Ellis/BRE Commercial, a San Diego brokerage firm, and its chief executive, John Frager, were fined a total of $3,000 for the company's reimbursement of $900 that Frager and his wife gave to Sanders' campaign.
  Stacey Fulhorst, executive director of the Ethics Commission, said the fine against Zanaboni's company was higher because he actively persuaded employees to donate.
  The commission made its decision in closed session about 5 p.m. yesterday.
  Frager, who called himself a political neophyte, said he didn't know he was doing anything wrong and quickly moved to correct his mistake once notified. Zanaboni could not be reached for comment.

 Hart's $17,000 fine surpasses the previous high for the commission, which levied a $15,000 fine against county Supervisor Ron Roberts last year for misidentifying the occupations of contributors in his 2004 mayoral bid.Fulhorst said Hart's violation was particularly egregious because his company works heavily on slate mailers.
  “It's not as though a grass-roots group of people got together and maybe didn't understand what they were doing,” she said.Hart, who lives in Orange County, also wasn't as cooperative as the two companies, which quickly acknowledged the wrongdoing. The Ethics Commission had to file a subpoena against Hart to obtain documents.
  Hart said he believed the commission fined him over a “very technical” issue, but he acknowledged he made a business decision to pay the fine and move on.
  Hart's biggest contributor was OliverMcMillan, a San Diego-based developer. Five divisions of the company and an executive, Morgan Dene Oliver, contributed $6,000 of the $18,000 Hart raised.At least one of the companies fined has a strong connection with the city.
  Sukut Construction, a pre-qualified contractor for the city, does landfill work for San Diego, according to the company's Web site.Sanders' spokesman, Fred Sainz, said, “It's the mayor's belief that the Ethics Committee exists to do its job, and he entrusts that they charged individuals who broke the law with the appropriate charges.”
When the Community Planners Committee voted 22-4 to oppose the housing element draft (plans that were heavilyinfluenced by the Chamber of Commerce and the Building Industry Association) Sanders then used the old pack the hoc committee method to push through insider's agendas.

Enough! Where and when does it end?
  Have we no elected officials with morals? How could the Alpine residence of Duncan Hunter have been so huge, along with guest house, pool and tennis court, and been taxed as though it was a small house? How could the county assess it as 2,946 square feet with no amenities, without a correction by the congressman? How could his insurance company know from day one, and correctly charge for a 6,200-square-foot home plus amenities, without the congressman challenging that it was only 2,946 square feet, since he had “accepted” the county number as correct?
  How could a very large bank sell a foreclosed property for the exact price that it paid for it, knowing that shareholders expect the bank to profit from all of its transactions? How can we keep accepting the rancid personal actions of public officials who should be expected to set examples of propriety? It is no wonder that so many people now believe that honesty has become a lost trait in many of the people elected to represent us.
DAVID L. BROWN, Escondido, Letter Union-Tribune Editor 10/10/06

Madaffer Overbudget
  City Councilman Jim Madaffer's office has overspent its budget by $176,000 this fiscal year, creating a 21-percent deficit in its $850,000 budget, according to city documents.
  The city of San Diego today released its year-end adjustments for fiscal year 2006, which ends June 30, and Madaffer's extra spending is among the unforeseen expenses to be covered an additional $27.5 million in revenues that came in above schedule.
  Madaffer spokeswoman Leslie Webb said she believed the deficit to be only $30,000. She said she didn't know the source of the deficit. Attempts to reach Madaffer and his chief of staff Thursday evening were unsuccessful.
  Two City Hall sources confirmed the $176,000 deficit.
  Each council office was allotted $850,000 for the fiscal year. A report released by city staff today detailing year-end budget adjustments recommends that $30,000 in increased revenues go toward the deficit. It also recommends $120,000 be taken from the District 7 infrastructure fund and $26,000 be taken from the district's "PC Replacement Fund." Madaffer represents District 7.
  As the City Council debated another in a long line of tight budgets this year, Madaffer often lamented the lack of funds to hire or retain police officers and complained about the mayor's new $1.4 million Office of Integrity and Ethics.
  The councilman, a Republican, has also run into personal financial problems while at City Hall, including having his water cut off three times for failing to pay his bills.
ANDREW DONOHUE
, Voice of San Diego, 6/8/06

Shame on Police Chief
PETER DiRENZA, SAN DIEGO, March 30, 2006
Is Chief of Police William Lansdowne losing his marbles? Is he not aware that his department is liable to cost the city, (taxpayers) possibly millions of dollars in lawsuits if Mr. Sandy Summers decides to sue?

 For those of you who are not aware of who Sandy is, take the time to visit the City Council chambers on a Tuesday and remain for "public comments." Sandy is an outspoken critic of the council and individual members of the council. During his discourse, he sometimes uses certain descriptive pronouns to identify certain council members; however, I have never heard him use foul language or physically threaten anyone.
 Sandy is also vying for Donna Frye's seat in the June election. On Tuesday, March 21, prior to Sandy making his allotted three minute presentation, a smiling Chief Lansdowne approached Sandy and said a few words while shaking his hand. Now, Lansdowne was aware of certain actions which were to follow, so it is opined that Lansdowne was tipping his officers off as to which person was Sandy Summers. Sort of like Judas, when he kissed Jesus to identify him to Pilates' "police." As Sandy egressed the chambers, he was arrested by two police officers, and a police department psychiatrist, who handcuffed him and took him involuntarily to Paradise Valley Hospital.
 Summers alleged that he was then drugged, ordered to sign a number of documents, and was retained for a number of days, allegedly for treatment and evaluation. Police officers involved supposedly arrested Sandy because they observed him in the chambers acting strangely?  Huh?
 Where the hell are we living? This is not Russia, Iraq, North Korea or China. This is the United States of America. We have a constitution that protects us from this type of fascism. Our police personnel are to "protect and serve" not to act as "SS" Troopers working in conjunction with Dr. Mengles.
 I suggest that the State Attorney General's office become involved with this case.

The FBI is Watching
Voice of San Diego, Wednesday, Jan. 4, 2006 -- 6:06 p.m.
  The local branch of the FBI is currently investigating 10 cases of alleged real estate fraud in San Diego.
  Real estate fraud has been named by the FBI as one of the most serious financial crimes facing citizens of the United States. FBI Assistant Director Bill Swecker said he considers Southern California and San Diego to be particularly susceptible to real estate fraud because of the region's high home prices and booming real estate market.
  An FBI spokeswoman said the number of investigations is high considering the relative stability of San Diego's real estate market recently. Volitile markets are said to foster increased real estate fraud.
  The spokeswoman said investigators in the bureau expect to see an increase in criminal activity as the market starts to sink, as many analysts have predicted. — Will Carless

Free the Auditor!
By MEL SHAPIRO, Voice of San Diego, Feb. 7, 2006
 A Jan. 1 report by City Auditor John Torell says "the concept of checks and balances and the controls inherent therein, are diminished at least perceptively, and often in reality, when the auditor is hired by and reports to the chief operating officer of the organization. This will happen with the advent of the strong mayor form of government."
 Isurfed the Web to find how other cities appoint their auditor.
 Oakland, Berkeley, Alameda County, Long Beach and Los Angeles elect theirs, Palo Alto, San Jose and Stockton auditors are appointed by city council. Outside of California, the Seattle, Honolulu and Phoenix auditors are chosen by city council. The only California city I found where the mayor hired the auditor was San Francisco -- where the auditor is hired for a 10-year term.
 The San Diego charter change is unique and lends itself to mischief. The mayor is empowered to fire the auditor without citing any cause and the proviso that the council can rehire him is far fetched since no auditor would want to work with a mayor who fired him, nor would a city council open the door to confrontation between these two officials.
 On Jan. 23, Chief Operating Officer Ronne Froman told the city council that Mayor Sanders doesn't want any changes in his powers over the auditor. At the same meeting Council President Scott Peters called a proposal to give the auditor more independence "rash." Torell's response was predictability timid, saying he could "live within the environment we have here."
 Is the auditor in a position to refuse requests from the mayor or Froman to tone down a report that criticizes top management? Hardly, knowing that he can be fired immediately.
 The mayor's unlimited power to fire the city auditor gives him the power to disgrace the auditor and permanently ruin his career. Coercion and intimidation by the mayor has already begun.
 Assistant Auditor Larry Tomanek was scheduled to testify at the Rules Committee in favor of amending the charter to take away the mayor's absolute power over the auditor. But at the last minute, Tomanek was a "no show."
 Councilman Jim Madaffer said his absence 'speaks volumes."
 Nevertheless, only Councilwoman Donna Frye voted in favor of having a ballot measure that would amend the charter. Of course, the mayor and council know that the city's previous financial statements were falsified and are being investigated by the FBI and the Securities and Exchange Commission.
 You would think that they would want a truly independent auditor so that this practice would not repeat itself. You would be wrong.
 Shapiro, a longtime City Hall watchdog, has won two Brown Act cases against the city of San Diego and Centre City Development Corp., which found certain closed sessions illegal.

Moonlighting
San Diego Reader, April 7, 2005, Breaking Stories
According to a recently filed financial-disclosure report for 2004,
the wife of indicted San Diego city councilman Michael Zucchet has been working for the Gemini Group, the political-consulting firm that has close ties to recently departed mayoral chief of staff John Kern. Teresa Zucchet reportedly earned between $10,000 and $100,000 at Gemini, run by Kern's longtime friend and professional associate Jennifer Tierney. The company has handled the campaigns of Mayor Dick Murphy and D.A. Bonnie Dumanis, both allied with Kern. Teresa Zucchet also reportedly earned between $10,000 and $100,000 as a counselor for the Poway Unified School District and as an adjunct instructor at the University of San Diego.

Ethical Conflicts Loom for CCDC
By Don Bauder, San Diego Reader, December 15, 2005
Centre City Development Corporation's board members -- all connected with the real estate industry in their professional lives -- are constantly running into potential conflicts of interest. But there is a broader issue: this developer-friendly board has not shown itself capable of grappling with the question of whether the corporation itself has outlived its usefulness, if it ever had any.
  Most San Diegans think the nonprofit Centre City Development Corporation (CCDC), formed by ex-mayor Pete Wilson in 1975, is the city's redevelopment agency. Not so. The city council has that task. CCDC supposedly has an advisory role. It says its job is to "staff and implement downtown redevelopment" and be a "catalyst for public-private partnerships.
  "The term "public-private partnership" is merely a euphemism for corporate welfare -- the steering of taxpayer funds to the pockets of developers and their cronies. But with the city broke, is it sound policy to subsidize luxury condos and the developers who build them?
  Late last month, CCDC director Gina Champion-Cain resigned because of a so-called "potential" conflict: she sells residential real estate downtown. On Friday, chairman Hal Sadler resigned. In July, activist Mel Shapiro had filed a complaint with the Ethics Commission, noting that Sadler's architectural firm, Tucker Sadler, had a feasibility contract for a pedestrian bridge over Harbor Drive, and he had voted on matters regarding it. Sadler has already been fined $6000 by the commission for voting in 2003 and 2004 on issues regarding the proposed downtown library. CCDC is committed to pouring $80 million into the library.
  Robert Ito and Reese Jarrett resigned in 2003 because they voted to give land to the Housing Commission. Both were with firms that did business with that commission, as Shapiro pointed out at the time.
  Shapiro notes that other board members, such as real estate financier Jennifer LeSar and banker Robert McNeely, occasionally disqualify themselves from certain votes. But city attorney Mike Aguirre says, "Disqualification is not enough if you're regularly handling business that is before CCDC. You should be resigning from the board."CCDC attorney Helen Holmes Peak says that's true in many cases, but directors also abstain from votes to "avoid an appearance of impropriety."CCDC's board "is basically made up of people of special interests," says Aguirre. And those special interests trample project-area committees, comprising elected citizens from the community who are supposed to join in planning efforts.Indeed, Shapiro believes CCDC "was set up to take away the power of project-area committees." Reason? "Redevelopment is a subsidy for the developers." For example, the ballpark is a redevelopment project that is a classic case of redistributing funds from poor and moderate-income folks to the rich and super-rich.
  The mentality is woven into the city's fabric, says Shapiro. Prior to Friday's resignation, the last three major pieces the Union-Tribune did about CCDC's involvement in the proposed downtown library did not mention Sadler and his obvious conflicts. "They have been covering up for Sadler," says Shapiro.The city doesn't need CCDC, he avers. The board should be abolished, and staff members who have some value should work directly for the city bureaucracy. The power of project-area committees should be restored. "I would rather see a citizens' group make these decisions than seven rich people appointed by the city council.
  "Former councilmember Bruce Henderson takes it a step further: why have government-subsidized redevelopment at all? "The time for government priming the development pump downtown is long past," says Henderson, noting that the concept is based on the untruth that downtown is blighted. "Years ago the whole downtown was declared blighted," he says. "So when they brag how wonderful downtown is, it's a bit of a hypocrisy, because at the same time they claim it is blighted." (Peak says that areas in which there has already been redevelopment would no longer be considered blighted. But she concedes that most of downtown is classified as blighted.)
  Remy Bermúdez worked for CCDC for six years and for its cousin, Southeastern Economic Development Corporation, for two. Bermúdez, a council candidate from the Eighth District in the last election, agrees that monies now going to CCDC and Southeastern "should be administered internally through the City."Citing her own Sherman Heights, she says that citizens refuse to be designated a redevelopment area for fear that homes will be seized through eminent domain. Redevelopment bureaucrats then neglect to provide the area other services. She would like to see "commercial corridors for redevelopment -- leave residential areas out of it. Give our businesses a chance to get grants and loans like they give to major developers.
  "So-called gentrification harms those with low and moderate incomes. As luxury condos shot up like mushrooms in the ballpark district, gentrification started moving east. Property values soared in those low-income areas. So did rents. Condo conversions exacerbated the problem. Some people sold their homes to real estate sharks, then realized that they could not buy another home with the proceeds. "Property taxes also went up," Bermúdez says.
  The ballpark district was "earmarked for low- and moderate-income housing," she says. CCDC "let it deteriorate, and lo and behold here comes a ballpark. So there is a ballpark but not low- and moderate-income housing. We're still waiting to reap the benefits of that ballpark. Do they want working people? No."She thinks the CCDC staff is capable of taking an enlightened approach, "but the board may not be capable of accepting such recommendations because they may not be lucrative.
  "Councilmember Donna Frye would like to see CCDC begin paying back the $100 million it owes the city and direct more funds to "affordable housing in the downtown area for very low income people and for seniors.
  "Like Henderson, she notes that more than half of the tax money collected in redevelopment districts goes back into redevelopment, and other political jurisdictions such as the county and state are shorted. This leads to economic distortions. She, too, is upset at the abuse of blight designations. For example, the county, worried that it will be shortchanged in tax revenue, is suing the city over its attempt to name Grantville a redevelopment area.Nationwide, redevelopment reform is in the air. In June, the U.S. Supreme Court upheld the seizure of homes in New London, Connecticut, for a development that would theoretically generate more tax revenue. The decision set off a firestorm. At least 35 states have moved to restrict eminent domain seizures. Says Frye, "In the ballpark district, people had moved in and invested their life savings in the community, then were told to move out. I'm also concerned about the cost of providing police and fire services to these redevelopment areas," which are billowing and gobbling up funds that should be going to essential services.
  Says Aguirre, "We're repeating mistakes of the past -- building more and more without providing infrastructure.
  We have to have significant improvement of the transportation system.
  "However, "there is not an interest in reform" on the CCDC board, says Frye.Some would even extend the CCDC approach. One idea for overhauling the city's Redevelopment Division, which handles projects in several neighborhoods, is to make it a nonprofit consultant like CCDC. "I am going to be asking a lot of questions," says Frye. "I am in no big hurry to set up a lot of agencies using CCDC as the model."

This Just In, Get the city's nitty-gritty as it breaks
E-mail: Mayor's Office Helped Pension PR Push
ANDREW DONOHUE, Voice of San Diego, Nov. 22, 2005
 Former Mayor Dick Murphy's office worked with a key pension official in 2003 to downplay early warnings that the pension system's finances were headed for a freefall, according to an internal e-mail obtained by the Voice of San Diego.
 In an e-mail to an official at the pension system's paid public relations firm, former pension board President Fred Pierce sent along the final copy of an opinion article that would later run as an ad in The San Diego Union-Tribune, a local newspaper.
 The ad, entitled "The Facts, Ma'am, Just the Facts," started off with the line "Chicken Little would be proud" and sought to dispel the "sensationalism, false accusations and basic inaccuracies regarding the San Diego City Employees' retirement system," according to a draft.
 In the body of the e-mail, Pierce wrote: "You will notice that the style has changed slightly and the article is shorter -- both inputs from David Hicks in the Mayor's office."
 Hicks was Murphy's deputy press secretary.
 The ad blamed the pension system's burgeoning financial problems on a drop in the stock market, something he said, in part, was caused by the "9/11 tragedy."
 Later studies debunked the theory that the city's pension problems were caused mostly by the stock market. Instead, studies showed that the pension deficit, then estimated at $720 million and now thought to be more than $1.37 billion, was caused by benefit increases and the city's intentional underfunding.
 A deal made in 2002 while Pierce oversaw the pension system and Murphy oversaw the city continued the city's practice of annually paying less into the pension system and granted city employees a series of pension benefit enhancements.

"Interim Report No. 2 Regarding Possible Abuse, Illegal Acts or Fraud by City of San Diego Officials"
Pension report by the San Diego City Attorney's Office:
http://genesis.sannet.gov/infospc/templates/attorney/index.jsp

A wave of scandals roils the city's leadership ranks.
By Jamie Renol, Newsweek, Aug. 1, 2005 issue
  San Diegans like to call their seaside paradise "America's Finest City." What else to name a place where city councilmen accept illegal campaign contributions on behalf of a strip-club owner looking to make the town safe for nude lap dancing? Last week a federal jury here convicted Acting Mayor Michael Zucchet and City Councilman Ralph Inzunza in a case that's come to be known as "Strippergate." The verdict came just days after Zucchet replaced Mayor Dick Murphy, who resigned July 15 amid controversy over the city's ailing pension fund. "Simply put, I am devastated," Zucchet said, adding that he would resign immediately because "the city of San Diego needs to get on with its business."
 These days, San Diego's business seems to be controversy˜from extortion to conspiracy to alleged war profiteering to exotic dancing. The city's municipal bonds have been downgraded to junk status because of the $1.7 billion pension shortfall, city services have been slashed, and there's even talk that San Diego might have to file for bankruptcy protection. The U.S. attorney and the Securities and Exchange Commission are looking into possible indictments related to the pension crisis, and the San Diego district attorney has filed criminal conflict-of-interest charges against six former pension-board members. Meantime, Rep. Randy (Duke) Cunningham, a member of the House Armed Services Committee, is under investigation by a federal grand jury for selling his house at an allegedly inflated price to a defense contractor˜whose share of government contracts has increased in recent years. Cunningham says he's cooperating fully with the grand-jury probe˜and won't run again.
 And then there's Cheetah's. That's the name of the strip club for which Inzunza, Zucchet and a now deceased city councilman, Charles Lewis, went to bat by trying to repeal the city's "no touch" ordinance between strippers and patrons, enacted in 2000. They failed. Cheetah's is owned by Michael Galardi, a Las Vegas strip-joint proprietor who hired a former Clark County, Nev., commissioner and cop named Lance Malone to ply the San Diego councilmen with some $34,000 in campaign contributions. Galardi pleaded guilty and became a witness for the prosecution, and Malone was convicted of conspiracy, extortion and 33 counts of wire fraud. The jury deliberated just 16 hours before convicting Zucchet and Inzunza, both 35. The two men are expected to request a retrial before their Nov. 9 sentencing. Zucchet's attorney, Jerry Coughlan, insists the contacts between the council members and Malone were strictly legit. "There isn't a single public official in the country that hasn't done the same thing," he said. That should come as good news to pole dancers everywhereSan Diego Daily Transcript

Ethics panel delays decision
San Diego Daily Transcript, June 10, 2005
 The city of San Diego Ethics Commission postponed its decision regarding the release of investigative records to other law enforcement agencies until its August meeting. The commission discussed the matter at its June gathering Thursday night but agreed more time was needed to review the issue.
  One of the concerns voiced by the commission was the effect such a release would have on the targets of its inquiries. "Respondents and witnesses might not readily cooperate with our administrative process if they believed that the information and documents they provided would be shared with another law enforcement agency and potentially used for criminal prosecution," executive director Stacey Fulhorst wrote in a June 9 memo to the commission. "People are not threatened by an Ethics Commission investigation," commission chair Dorothy Smith said at the meeting, adding that attitude would change if records were routinely turned over.
  The City Attorney's office and the Office of the Attorney General have requested the release of documents from the commission's investigation files. While the commission has the power to issue subpoenas and pursue hearings to get respondents to cooperate,
  Fulhorst said her staff can't afford to spend much time in court proceedings. "The commission employs one investigator, one attorney and one director, making it difficult," she said. "The prospect of releasing records would cause us to grind to a halt.

The Road to Riches Is Called K Street, Lobbying Firms Hire More, Pay More, Charge More to Influence Government
By Jeffrey H. BirnbaumWashington Post Staff Writer, June 22, 2005;
Excerpt: To the great growth industries of America such as health care and home building add one more: influence peddling.
 The number of registered lobbyists in Washington has more than doubled since 2000 to more than 34,750 while the amount that lobbyists charge their new clients has increased by as much as 100 percent. Only a few other businesses have enjoyed greater prosperity in an otherwise fitful economy. (for full artyicle click)
http://www.washingtonpost.com/wp-dyn/content/article/2005/06/21/AR2005062101632.html

Hit-Piece Cowards— Matt Potter in last week's "City Lights" (June 2, below) described the decision by the impotent ethics commission on the Donna Frye hit pieces delivered to voters the weekend before the mayoral election last year, and I thank him for bringing the issue to the public's attention. One piece had a picture of little boys crying and an unflattering photo of Ms. Frye while accusing her of voting against the 6-to-6 child-care program. Virtually all the money ($130,000) donated to pay for these pieces was raised in the week before the election, and the donors went to great lengths to remain anonymous. According to the ethics commission, who wrote the city's campaign-control ordinance, these mailings were not related to the mayoral election and were merely public-service pieces, so that the slimeballs who anted up the dough were not subject to the reporting requirements for last-minute campaign mailers. The cowards who hid behind the flawed law include the inestimable C. Terry Brown (fatcat owner of Altas Hotels), San Diego Realtors, and San Diego Builders. You might ask yourself when these groups have ever advocated for children before their hit piece. As a result of the decision by the Murphy-appointed ethics commission (entrance fee a $250 donation to Murphy), these groups can again engage in their sleazy campaign tactics in the upcoming mayoral primary with impunity. No one but lawyers could possibly conclude the hit pieces were not intended to influence the previous election by representing Ms. Frye as an uncaring Grinch. But then, lawyers run this town. —Ian Trowbridge, Mission Hills
Ian Trowbridge fired off a complaint to the city's ethics commission, charging that the mailing's sponsors broke city law when they failed to make a late contribution report disclosing who had paid for the mailer. But last week, commission executive director Stacey Fulhorst ruled otherwise. In a letter to Trowbridge, she wrote that the commission had decided that KEEP's mailings "did not expressly support or oppose the election or defeat of a City candidate," and thus city disclosure rules did not apply. (After the campaign was over, KEEP made its regular year-end filing under state law, revealing that $112,000 to pay for the mailings had come from Mission Valley hotel magnate Terry Brown, the building industry, and real estate brokers.) Fulhorst added that the commission would "recommend the addition of an 'election communications' provision that would regulate any advertisements that mention a City candidate within a certain time period before a City election." Of course, the new law isn't expected to be ready in time for this July's mayoral election.Cox was defendant in suit led by Aguirre

By Dean Calbreath, UNION-TRIBUNE, June 3, 2005
Rep. Christopher Cox, President Bush's choice to head the Securities and Exchange Commission, has firsthand experience with securities lawsuits, having been named a defendant in 1995 in an Orange County investment scam.
 
Although Cox was dropped from the case, he said the experience confirmed his belief in the need to severely limit shareholder lawsuits.
 But San Diego City Attorney Michael Aguirre – who filed the case against Cox when Aguirre was in private practice – said Cox's onetime role as an attorney for Orange County's First Pension Corp. raises questions about whether he's the right person to head the SEC.
"Three of Cox's clients went to prison regarding the matters he was advising them on," Aguirre said. "There are a lot of questions that need to be asked of Mr. Cox about his actions in the First Pension case. A careful examination of the record should be made."
  Officials in Cox's office were asked about the case but declined to comment.
 The First Pension case dates to the mid-1980s, when Cox was an attorney working in the Irvine office of the Latham & Watkins law firm. As part of his duties, he prepared legal papers and conducted other work for First Pension Corp. in Irvine.
  Apparently unbeknown to Cox, First Pension was running a large pyramid scheme, selling investments in fictitious properties and then using money from new investors to pay back old investors.
 When First Pension collapsed in 1994, its founder, William Cooper, was sentenced to 10 years in jail and ordered to repay investors $73 million. Two other First Pension executives, Valerie Jensen and Robert Lindley, also received prison terms.
  Aguirre filed a class-action lawsuit against First Pension, hoping to recoup money for 350 mostly elderly investors. Aguirre also sued First Pension's accounting firm, Coopers & Lybrand, and legal firm, Latham & Watkins, as well as Cox, for allegedly concealing information from investors.
  Cox has long maintained that his activities for First Pension were legal and that he was not aware of the company's fraud.
  "First Pension concealed the fraud," he said at the time, adding that the allegations that he was involved were "defamatory and false."
  After three years of litigation, Aguirre dropped Cox from the suit, although he says he used Cox's papers in his case against Latham & Watkins, which later settled out of court.
  The suit was filed just after Cox had authored the Private Securities Litigation Reform Act of 1995, which among other things limited the ability of shareholders to sue accountants and lawyers who unwittingly work for fraudulent schemes.
  "This type of case has everything to do with the need for my legislation," he said at the time.
  But Aguirre insisted there was nothing frivolous about the First Pension case.
  "This case resulted in a major finding of fraud by Coopers & Lybrand and a settlement by Cox's own law firm," he said. "If he thinks this is the type of case that shouldn't be brought to the courts, that means he doesn't want to see cases brought that actually have merit."

2 ex-Data Processing execs already charged
By Ronald W. Powell, Union Tribune, April 30, 2005
For the second time in a month San Diego City Attorney Michael Aguirre is butting heads with District Attorney Bonnie Dumanis.
 A day after Dumanis' office charged two former officials of a San Diego city agency with crimes, Aguirre said he will launch his own investigation into the agency's activities.
 Aguirre said yesterday that he wants his own staff to review the district attorney's probe into the dealings of former executives of the San Diego Data Processing Corp., a city-owned nonprofit computer and telecommunications agency.
 The District Attorney's Office Thursday charged Roger Talamantez, the agency's former president and chief executive officer, with three misdemeanors. The corporation's former vice president, Charles LaPack, was charged with one.
 Aguirre said he will send a written request Monday to Dumanis for materials her office gathered during a nearly 16-month investigation.
 "I've asked the head of our criminal division to take a look at the evidence and see if there are other violations in the case," Aguirre said.
 The inquiry sets up a possible showdown between two of the region's top law enforcement officials.
 Aguirre was angered by Dumanis early this month when she made an unscheduled appearance before the City Council and unveiled a plan to take over misdemeanor cases handled by Aguirre's office.
 Dumanis said it would save the city $2 million a year, but Aguirre called the proposal a "political assassination attempt."
 Aguirre said his planned review of the data corporation case is unrelated to the dust-up with Dumanis. He said he hopes she will cooperate with him.
 "I hope people don't think that is the reason," Aguirre said. "What's important is that we end the nonprosecution of corruption in San Diego."
 Dumanis, through her spokeswoman, said she would reserve comment until she receives Aguirre's written request.
'Serious violations'At a news conference yesterday, Dumanis said the investigation is over and her office thoroughly reviewed voluminous documents and other evidence, interviewed 20 people, and filed the appropriate charges, which she called "serious violations of the public trust."
 "Anyone who violates the law will be prosecuted," Dumanis said. "There was no felony culpability, so we looked to misdemeanors. No one will be let off the hook."
 San Diego Data Processing Corp. has 264 employees and a $60 million annual budget. It was created by the city in 1979 to provide computer and telecommunications services to 25 city departments.
 A city audit of the corporation in January 2004 revealed that Talamantez and other executives spent lavishly on meals, alcoholic beverages, holiday parties, executive retreats, dining club memberships and other activities unrelated to Data Processing's role with the city.
 Talamantez resigned from his $241,284-a-year job within a week of the audit's release. He left with $117,985 in severance pay.
Probe soughtSeveral City Council members still wondered whether the spending was illegal, and on Jan. 15, 2004, then-City Attorney Casey Gwinn asked the district attorney to investigate.
 After Talamantez's departure, the corporation's board of directors adopted stringent rules for meal expenditures and banned the purchase of alcohol and the payment of spousal travel at company expense.
 Dumanis' office charged Talamantez over his stock ownership in Viador Inc., a software company doing business with the corporation while he was chief executive.
 LaPack is accused of failing to report his ownership of Viador stock on his 2002 financial disclosure statement.
 Each charge carries a maximum sentence of six months in jail and/or a $10,000 fine. Their arraignment in San Diego Superior Court is scheduled for Friday. Neither is required to appear because the charges are misdemeanors
(Watchdog Coments)
 
After a 16 month investigation of the San Diego Data Processing Corp. (SDPC), the DA"s office uncovers three misdemeanors by Roger Talamantez, former president and CEO of SDPC and one misdemeanor by Charles LaPack, former vice president ,SDPC.
  The DA stated she filed "appropriate charges" against these two, for which she called "serious violations of the public trust" but stated" there was no felony culpability."
  Believe it or not, the DA did not charge these men for larceny but for "Conflicts of Interest and underreporting" stock holdings.
  These executives spent thousands of dollars of SDPC money as their own for booze, meals, trips, resorts, etc., which included family members. Yet the DA finds no felony culpability??  I believe the crime of larceny is a felony and that being an
accessory before or after the fact is a felony.
  The referenced article identifies the punishment for the cited "misdemeanors" as a maximum sentence of "six months in jail and or a $10,000. fine"(sic).  Actually, it is only a $1,000. fine.  
  So after living the good life on the high road, with money not their own, these folks are being given a "slap on the hand" by the DA.
  Does it never cease.  We need a new DA!
—Peter J. DiRenza, Anti-corruption in Govt

(Watchdog Coments) Dear Editor: I thank Nicole for his apparently insightful thoughts on District Attorney Bonnie Dumanis in his social column. But the the truth is she is violating her oath of office when she refuses to bring charges against the miscreants at the old San Diego Data Processing Corporation.
  She is covering up Council Member Madaffer's involvement in scams that cost the city hundreds of thousands of dollars. The data are there and it's time the DA acted as a prosecutor.
—Ian Trowbridg

Pricey conversations, Zucchet's lawyer is quick to bill
UNION-TRIBUNE EDITORIAL , March 12, 2005
  Taxpayers are shelling out enormous sums to outside lawyers to represent a raft of city officials – Mayor Dick Murphy, City Council members, City Manager Lamont Ewell and many others – in the federal probes of financial irregularities at City Hall. Yet there has been scant oversight of the bills being submitted by lawyers for taxpayer reimbursement.
 Consider, for example, defense attorney Jerry Coughlan's $562.50 bill for phone conversations he had with Union-Tribune editor Karin Winner and two others last July. Coughlan was calling about a planned editorial critical of his client, Councilman Michael Zucchet. At the time, Zucchet was attempting to rewrite a ballot measure in order to prohibit whistle-blower Diann Shipione from serving on the city's troubled retirement board.
 Zucchet is set to go on trial May 3 in U.S. District Court on multiple felony charges. The federal grand jury's indictment accuses Zucchet, along with Councilman Ralph Inzunza, of taking illegal payments from Las Vegas strip club operators in exchange for repealing San Diego's no-touch rule in adult establishments. Zucchet has pleaded not guilty to the charges. Coughlan represents Zucchet in this criminal case, at  Zucchet's expense. But Coughlan also represents Zucchet in civil proceedings related to the city's financial crisis, and this work is being done at taxpayer expense.
 Thus Coughlan submitted a hefty bill to taxpayers for his conversations with the Union-Tribune editor, even though the matter was not legal work at all, but rather pure public relations – a bid to shield Zucchet from more bad publicity. Coughlan asserts with a straight face that public relations is part of his lawyer's job, because it "could have legal consequences." Even more galling, then-City Attorney Casey paid the oversized bill, with no questions asked.
To his credit, new City Attorney Mike Aguirre demanded that Coughlan reimburse the taxpayers for the inappropriate bill. Coughlan has done so. An audit of the blizzard of bills being submitted by Coughlan and other private lawyers is clearly needed to ensure that taxpayers are not footing the bill for other public relations work on behalf of San Diego's politicians.

Nonprofit's lobbying efforts raise eyebrows of City Hall watchers
By KEVIN CHRISTENSEN, The Daily Transcript, March 18, 2005
A pending policy position on a controversial apartment complex and an executive-level e-mail has raised some ethical concerns about a local nonprofit organization's ability to weigh in on political matters.
 The San Diego Regional Economic Development Corp., or EDC, is a private nonprofit organization tasked with marketing the city as a business destination and championing business goals. The agency received $1.2 million from the city of San Diego in fiscal year 2004, and received about $1.2 million in fiscal year 2005.
Because the agency is partially taxpayer-subsidized, there are questions regarding the agency's lobbying power.
Julie Meier Wright, president and chief executive officer for the corporation, said the agency now receives two-thirds of its budget from private membership sources.
 The e-mail causing a stir in some City Hall circles is from an EDC vice president member to a local labor advocate, saying that supporting a project could lead to potential conflict and political pressure on other public policy issues.
 Councilwoman Donna Frye said it's these kinds of questions that will bring agencies, such as EDC, under increased scrutiny this year as the budget discussions become more intense.
Frye spoke of requiring the agency to undergo regular audits.
"It's good public policy to make sure that the money being provided to anyone -- that it's adequately audited," Frye said. "We have to make sure that it's being spent in the best interest of the taxpayers."
The e-mail, sent by EDC Vice President Erik Bruvold to Donald Cohen, executive director of local labor think tank the Center for Policy Initiatives, discussed supporting a new residential project in Sorrento Mesa.
 "We have been in such a good place recently with either being unified (pro marine terminal) or at least not going head to head," Bruvold wrote. "Would be a shame to go back into a bad place."
Bruvold said that Cohen's support for the project could bring intensified opposition to the living wage.
"CPI supporting this project could really irritate people who seem to have been nice and silent on the living wage debate," Bruvold wrote. "My board will formally either oppose, support, or stay out of the rezone on April 12 but I thought I would give you a heads up and a 'we should talk' prior to anything precipitous."
 Cohen, who did not distribute the e-mail, would not comment.
The housing project is a contentious issue at City Hall concerning whether to allow residential projects next to light industrial and manufacturing business centers.
In a recent interview, Bruvold said that the e-mail was to keep Cohen in the loop.
 "All I was trying to indicate is that people whose interest runs high have been disengaged and would be unhappy to see CPI get involved," Bruvold said. "It was not a threat."
 Others did not see it as a collegial heads up.
 "That was unprofessional and unethical," said Lisa Briggs, executive director of the San Diego County Taxpayers' Association.
Briggs pointed out that the mission statement of the development corporation is to lure businesses to San Diego.
"Where they get into trouble is when they lobby on situations in their own back yard," Briggs said. "And if they are lobbying, who is paying for it? They should not be lobbying city issues on the city's dime."
Briggs said the core issue is the appropriateness of EDC supporting a specific policy before the city, a certain project or perhaps seemingly trading policy stances with lobbyist that don't receive city funding.
Meier Wright said influencing public policy is central to the agency's core mission. On issues where there are private interests, the corporation is "scrupulous" about ensuring the use of its private membership monies, she said.
 "With our private sector funds, we have the flexibility to work on a range of public policy issues," Meier Wright said. "We are really scrupulous about those things. I understand why people would want to know that we are not using public funds to lobby."
Councilwoman Toni Atkins said there is no problem with the development corporation weighing in on an issue like industrial co-location.
 "I don't think it's inappropriate," Atkins said. "If there is an issue where they are lobbying against a city position, that would be problematic."
Regarding private lobbying issues, Atkins noted that it is imperative that the development corporation use funds generated from private members.
 "As long as they are using their money that they collect from the private funds, that doesn't seem inappropriate," Atkins said.

Mayor Murphy Will Resign
By NEIL MORGAN, Voice Senior Editor, Feb. 28, 2005
Mayor Murphy will resign, some City Hall insiders now predict. Mayor Murphy himself scoffs at the idea.
 Mayor Murphy does not appear to believe he has done anything wrong. He has had no knowledge of wrong; he has not seen the letters warning of wrong, nor been told of wrong nor the letters warning of wrong. He was at work that day, as he is every day, but he didn't see them.
Was the departed chief of staff, John Kern, clairvoyant enough to stop Murphy's mail? Or was Mayor Murphy escaping, as Mayor Maureen O'Connor used to do, for a movie matinee? Murphy remains immaculate, except in the sense that there seem only a few who still believe him. And Kern: He quit to go out there and raise money for Murphy's defense fund, right? I wonder what testimony Kern will spin about these years under a federal court subpoena.
 Mayor Murphy will be recalled, some big-time, angry groups say. But they won't go to the trouble and expense of gathering signatures if anything easier works. Such talk comes from the angry (most of them in behalf of the city's reputation and its economic future) and from the frightened (many of them nervous City Hall insiders who fear being drawn into federal investigations).
 At this moment there seem only two moving forces at work in this scandal.
 One, of course, is the diminutive but icy cool Carol Lam, the United States attorney, the one who planted the wiretaps inside City Hall for 22 months. (Is it an insight on City Hall that no one at City Hall suspected their phones were tapped during 22 months?). The other moving force is the voluble city attorney, Mike Aguirre, who won office by the thinnest of
margins. It is a memory that invites speculation on how differently this might be playing out if the new city attorney had been a former deputy from the office of the former city attorney, Casey Gwinn, whose reported counsel to City Hall looks worse every day. The specter of civil or criminal fraud charges now lies over some who were in the Gwinn office.
Nothing summons up Mayor Murphy's illusory view of his duties more charmingly than his repetitive complaints that City Attorney Mike Aguirre should not be criticizing actions that he took on advice of Gwinn, who has mercifully disappeared into his chosen field of family counseling. For a former judge like Murphy, this defense must seem thin ice indeed. If Gwinn advised Murphy that he was doing no wrong, that was then. We have a city attorney now who insists that following bad legal advice from a former city attorney is no excuse for breaking the law. In Murphy's years in court, I looked in sometimes as a reporter. I can hear him telling some poor blighter: Getting bad advice from your lawyer is no excuse for breaking the law.
 If Murphy weren't a judge, this whole sloppy scenario wouldn't seem so ripe for TV.
 Some good can come of this, I promise. It will take time, far more time than we should have to be involved in such intrigue. I still believe in the laws of our land, and so do you. For every ugly explosion like this in government -- or in anything else that I've experienced -- there comes a reactionary wave. We should give more attention to those we elect, and follow what they do. The local media absolutely must get up their courage to do what media are supposed to do: Be nosy; Be unafraid of established power; Anticipate trouble, and warn of it; Be prepared to accept criticism when media is right; Speak out; If warned not to challenge some existing administration or some advertiser, look for a better job.

Commissioner defies port policy, New member signs deal with Cuban firm
By Caitlin Rother, Union Tribune, February 26, 2005
 Commissioner Kourosh Hangafarin (from left) met with Alimport's Pedro Alvarez and American Trading Services' William Lane in Havana.
 The newest member of San Diego's Port Commission defied agency officials yesterday by representing the port on a personal business trip to Cuba and signing an import agreement on its behalf with a Cuban food company.
Kourosh Hangafarin, who was appointed to the commission less than a month ago by Mayor Dick Murphy despite opposition, signed a deal between the San Diego Unified Port District and Alimport, a Cuban food import agency, in Havana.
Although Hangafarin's agreement with Alimport is not binding without the commission's approval at a public meeting, port officials said, his actions have raised a host of questions at the federal and local levels, including whether Hangafarin could gain financially from the deal
.
 The news stunned Port Commission Chairman Bill Hall, who said he was upset when Hangafarin faxed over the memorandum of understanding between the Port District and Alimport, allowing more U.S. food to be shipped from San Diego to Cuba.
"I am concerned by it; I don't like it," Hall said last night. "Basically, he didn't act in accordance with policy, but he's new to the board, so I'm going to look at what the repercussions may be."
Hangafarin's move comes at a sensitive time in Cuba's trade relations with the United States, which have been tenuous since economic embargoes were imposed in the early 1960s. On Tuesday, the Treasury Department announced a new rule requiring that Cuba pay cash in advance of getting any U.S. shipments of food and medicine – a move that Alimport officials say will jeopardize trade between the two countries.
 Hall said he asked port staff members to talk with the federal departments of state and commerce about trade deals with Cuba, especially in light of the latest restrictions.
Asked whether Hangafarin might face disciplinary action, Hall said:  "That remains to be seen."
 After receiving the fax yesterday, Hall spoke to Hangafarin by phone.
"I said, 'You are not there on port business and you are not to sign anything on behalf of the port,' " Hall said. "He apologized and indicated he didn't understand the ramifications."
Hangafarin told Hall that he had gone ahead with the agreement because "he felt that this was a good opportunity to develop trade alternatives for the port of San Diego."
 "That is certainly one of our goals," Hall said, "but not this way."
In a statement last night, Murphy said: "Until we know more, we are referring all questions to the port. However, I would be surprised if Kourosh Hangafarin intentionally did anything wrong."
Hangafarin, who apparently was still in Cuba last night, did not respond to a page to his cell phone.
 The seven-member Port Commission regulates the San Diego Bay state tidelands and the Imperial Beach ocean front. Members are selected from the district's five member cities, San Diego, National City, Coronado, Chula Vista and Imperial Beach.
 Before leaving on a port-authorized trade mission to Australia this month, Hangafarin told port officials he intended to go to Cuba afterward for some personal business. He asked "whether it might be worthwhile to represent the port," Hall recalled, "and we basically said no."
 "Before we do something like that we want to look at the ramifications and talk to the right people from a policy standpoint before we go treading into those waters," he said.
 A Reuters photo yesterday featured Hangafarin at a news conference with Pedro Alvarez, the head of Alimport; and William Lane, chairman of American Trading Services, a San Diego-based company that imports and exports food and medicine.
 During the meeting at which Hangafarin signed the agreement with Alimport, Alvarez also signed a deal with American Trading Services to buy $30,000 in packaged drinks and bread products.
 Murphy nominated Hangafarin to replace businessman Peter Q. Davis on the Port Commission after Davis ran against him and lost in the mayoral primary last year. Murphy considered his friend's challenge a betrayal. He said he was nominating Hangafarin in part because Iranian-Americans are underrepresented on city boards and commissions.
 Hangafarin's appointment was opposed by those who objected to his behavior while on the county's Planning Commission. County staffers contended that he was verbally abusive to them and commission members said he was contentious at meetings.
 He also sent e-mails inviting county staff to Republican fund-raising events. The County Counsel's Office told him the invitations were inappropriate and should be discontinued.
 Councilwoman Donna Frye, who voted against the appointment along with Councilwoman Toni Atkins, said she was practically speechless at the news of Hangafarin's actions.
"What a bummer," she said. " . . . We never had this type of problem, or alleged problem, with Peter Q. Davis. And certainly I'll be interested to hear both sides of the story, but it seems that there may be a real problem."
 Hangafarin, 45, is managing director of The Corbis Group, an international consulting and marketing company. His bio says he has helped raise campaign funds for Republican candidates including George W. Bush, Darrel Issa, Pete Wilson, Bob Dole and Matt Fong. He also has said he contributed to Murphy's mayoral campaign.
At the news conference yesterday, Alvarez told reporters that the Treasury Department's rule announced Tuesday "ignores the will of the U.S. Congress," which authorized agricultural sales to Cuba in 2000.
"Goods earmarked to the Cuban people could apparently be liable to court-ordered seizures in the United States to satisfy legally groundless claims against Cuba," he said, adding that U.S. farmers, shipping companies and ports stood to lose Cuban business because of the decision.
 Trade with Cuba, while restricted, has increased in recent years.
Last year, the United States shipped $378 million worth of agricultural goods to Cuba – mostly rice, corn, chickens and wheat. Most of the goods were shipped through ports on the Gulf Coast. New Orleans handled $193 million worth of Cuba-bound exports; Houston and Mobile, Ala., $77 million each; and Tampa, Fla., $35 million.
By comparison, the port of Los Angeles – the only West Coast port to handle shipping to Cuba – shipped only $71,000 worth of cargo, according to the U.S.-Cuba Trade and Economic Council.
Gregory Estevane, a former business partner of an American Trading Services official, said there is plenty of room for California ports to become involved in trade to Cuba.
"We're already shipping goods through the Panama Canal to places like Jamaica and the Virgin Islands," he said. "It wouldn't be any harder to ship them through Cuba."
 A State Department spokesman was not available last night to speak about the matter.
In recent years, trade missions of businesspeople, members of Congress and other government officials have routinely gone to Cuba and struck trade deals for apples, raisins, grains and poultry – often meeting over a lengthy dinner with Cuban leader Fidel Castro.
Since 2000, Castro's government has gone from the 226th largest market for U.S. agriculture exports to 21st, with total purchases of $1 billion, the senators said.

Ask Merrill-Lynch
By Ron Carrico, San Diego Daily Transcript ,February 16, 2005
With the City Hall uproar about pension losses, officials are dancing around a major result of the pension deficit cover-up: the sale of city bonds to Merrill-Lynch that resulted in the Padres ballpark construction.
Taxpayers deserve to know what Merrill-Lynch knows about the negotiations, issuance and sale of the ballpark bonds.
Recall that Mayor Dick Murphy introduced the idea of a Blue Ribbon Commission to analyze the financial condition of the city in his State of the City speech in January 2001. The idea was that before the city could begin to achieve the 10 goals Murphy had set for his administration, he would have a Blue Ribbon Commission of financial experts perform an independent evaluation of city finances and make appropriate recommendations.
But the ballpark bonds were issued one year later -- prior to publication of the Blue Ribbon Committee's report. Looking at old newspaper articles from early 2002, it is clear that the ballpark bonds were issued on Feb. 15, 2001 while the Blue Ribbon Commission report was presented on Feb. 27, 2001, and not accepted by the City Council until March 2001.
Moreover, it appears city officials negotiated for the bonds in secret and kept that secrecy while the bond sale was in escrow, fearing a last-minute lawsuit would derail the funding. Does this mean city officials had no interest in the commission's evaluation of city finances and "appropriate recommendations"? Was the commission even involved in the bond sale process, or were city officials hurrying to issue the bonds prior to the Blue Ribbon report just in case the report was bad news?
The Blue Ribbon Commission stated that the city was actually in good financial condition and that the pension fund was 97 percent funded -- making the bond sale appear appropriate.
But the real story was that the pension fund was declining to the point where the city would have to put in tens of millions of dollars to bring the fund to acceptable levels.
Last week City Attorney Michael Aguirre released a report indicating that in late 2001 and early 2002, certain members of the committee and other city officials knew or should have known that the pension was underfunded by hundreds of millions of dollars. This was vital information that should have been considered in the bond sale and the Blue Ribbon Commission report, and is now the subject of SEC and FBI investigations.
Documents recently uncovered by the City Attorney's office divulged that on April 29, 2002, Blue Ribbon Committee members and Dennis Gibson, the mayor's senior policy adviser, received a faxed letter from Richard Vortmann, the panel member that was to investigate unfunded liabilities like the pension. The letter stated, among other things, "The committee's unstated concern over the ballpark financing and the negative impact to the city's credit rating in general are now behind us."
He went on to write: "I have a growing and daunting concern that we possibly did our City a disservice by not ringing a very loud bell that:
i) the City's fiscal health is not what it appears,
ii) there are serious problems,
iii) their solutions will be painful in terms of reduced services and/or increased taxes and fees, and
iv) a comprehensive multi-year strategic plan to deal with the situation must immediately be developed; difficult decisions must be made now."

These statements are interesting. First of all, because he refers to the "unstated concern over ballpark financing." But the committee never directly referred to the ballpark and certainly never made recommendations. Why the concern? External pressure? But Vortmann's straight-out admissions about a disservice to our city is surprising since he apparently never attempted to rectify the problems by ringing a very loud bell.
We will probably never get the full story about what was really going on with the Blue Ribbon Commission and its relationship to the ballpark bond issue. But we could learn a lot about the whole process if the City Attorney's Office asks Merrill-Lynch officials -- under penalty of perjury.
Particularly interesting: Although the total bond sale to Merrill-Lynch was $166 million, after deducting closing fees, insurance and other expenses the actual proceeds from the sale were only $130 million. And why in the world were these tax-free municipal bonds set at 7.66 percent? There are better credit card rates than that -- and without the $36 million closing costs. In fact, why not borrow from the local pension fund? Maybe city officials really knew the fund was deeply underfunded and had no extra cash to lend.
The next big question, which would reveal a lot about San Diego politics: Who got to buy these high-rate, tax-free bonds from Merrill-Lynch?
One newspaper reported that a spokesman for Merrill Lynch said sale of the bonds was restricted to sophisticated investors. So who was on the inside track? Any other payoffs to pals of the administration?
All those high-rate bonds and all that closing cost money, lots of room for -- shall I say the word -- corruption?

Aguirre may be trying to stay away from the ballpark issue, as it would deflect focus, but I hope that within a short period of time the City Attorney's office begins depositions of Merrill-Lynch and their officials. The results will be interesting
.

'IT'S A BOMBSHELL', Ignored memo warns of pension danger—and Mayor Murphy knew
by Daniel Strumpf, City Beat, 2/2/05
Just 14 days after Mayor Dick Murphy’s 2002 Blue Ribbon Committee on Finances presented its final report on the city’s fiscal health to the City Council, a fax machine in the mayor’s office spit out a memo expressing one committee member’s “growing and daunting concern that we possibly did our city a disservice by not ringing a very loud bell.”
The memo, written by shipbuilding executive Richard Vortmann, was itself a call, one that Murphy’s staff ignored.
More than two years later—with the city’s pension debt surpassing $3 billion and growing every day, threatening to force the city into bankruptcy, and city finances and officials under the scrutiny of federal investigators—the April 29, 2002 memo is getting a lot of attention. And this time around the alarm bells cannot be ignored.
The memo was unearthed as a result of a CityBeat investigation. City Attorney Mike Aguirre didn’t know the memo existed until CityBeat showed it to him this week.
“The Blue Ribbon Committee was set up to find all of the financial meteors headed toward the city, and the biggest financial meteor was this pension problem,” says Aguirre, who just two weeks ago announced that his investigation into city finances was probing a possible cover-up by the Blue Ribbon Committee, the mayor and other city officials. “It’s clear that they knew about it and didn’t disclose it with the kind of specificity that they should have as Mr. Vortmann now acknowledges in his letter. It’s a bombshell.”
Aguirre’s initial announcement focused on another Vortmann memo dated Feb. 18, 2002, which proved the committee failed to include newly available information about the city pension system under-funding in its 2002 report. Aguirre argues that if that information had been provided, the City Council may not have agreed to increase employee benefits, one of several agreements that resulted in the city’s current pension under-funding.
Circulated by CityBeat to various City Hall insiders, the newly uncovered Vortmann memo instantly added fuel to Aguirre’s claims, providing some with a motive for the alleged deception.
Vortmann sent the memo to then-city Auditor Ed Ryan, then-assistant Auditor Terri Webster, his eight fellow committee members and one of the mayor’s senior policy advisors. His warnings were ignored by the mayor’s office and all but one of the recipients—Blue Ribbon Committee vice chair April Boling—a fact that’s raising the ire of observers and piquing the interest of investigators.
To some, Vortmann’s memo provides evidence that the committee, comprising volunteer citizens and touted by the mayor from its inception as “independent,” was actually pressured to understate the severity of its findings.
“After much discussion of whether the ‘sky was really falling’ and did we really want to say all that, we, as a group, with my concurrence, evolved to the final version of our conclusion i.e. ‘the city is in good fiscal shape, but…’” wrote Vortmann.
“It appears to me that Vortmann and others on the committee, I don’t know who, they intentionally pulled their punches,” says Michael Conger, the attorney who successfully sued the city in 2003 for under-funding the pension system. “I don’t know how you could read this memo otherwise.”
Moreover, many believe Vortmann’s memo suggests a financial motive behind the alleged deception.
“The committee’s unstated concern over the ballpark financing and any impact to the city’s credit rating in general are now behind us,” wrote Vortmann. “However, certain recent developments since our report deliberation seems to accentuate the ‘buts’ we made in our report.”
“In other words,” says Carl DeMaio, president of the Performance Institute,
a government-finance think tank, and frequent critic of City Hall, “now that the financing has been done, now that we have duped our bond holders, now that we have been able to get a good credit rating on this latest bond, now let’s be honest.”
Was the Blue Ribbon Committee less concerned with vetting city finances than protecting the rating of nearly $170 million in bonds issued by the city to finance final construction of the beleaguered Petco Park?
Calling from the East Coast and a little hazy on the details of a memo he wrote more than two years ago, Vortmann told CityBeat he’s pretty sure his memo is being read out of context.
“That certainly is reading a hell of a lot into it,” he said. “First of all, our report had no involvement with any bond financing whatsoever. We were an independent volunteer group giving an opinion to the mayor on the fiscal condition of the city and, not to my knowledge, used as a reference for any bond financing and certainly had no authority to be such.”

Boling backed him up, saying she believes the statement was referring to an anticipated spike in the city’s debt level caused by the sale of the ballpark bonds.
But did the Blue Ribbon Committee alter its findings? No, said all five committee members who returned CityBeat’s calls. April Boling, April Riel, Victor Vilaplana and Vortmann all echoed Andrew Poat, who said committee members had different ways of interpreting the information provided by Ryan and Webster and other city staffers. Some, like Boling and Vortmann, reportedly saw impending doom while others simply saw room for improvement. They worked toward a consensus
as any committee would.
Similarly, none of the committee members CityBeat spoke to recalled anyone implying or pressuring them to temper their findings to facilitate the sale of ballpark bonds.
But Boling, who went on to chair the mayor’s Pension Reform Committee in 2003, says recent revelations have caused her to question whether the committee may have been manipulated in more subtle ways. Much of her concerns stem from the longer-than-anticipated time it took for the Blue Ribbon Committee to issue its report.
Interrupted by the events of 9/11, Boling says an initial two-month delay was understandable, but in retrospect it’s the fact that the Blue Ribbon Committee’s report was delayed another two months, until after the city issued the ballpark bonds in 2002, that’s troubling her now.
Boling said she was also troubled when she learned this week that Joe Craver, who chaired the Blue Ribbon Committee, also simultaneously chaired the Public Facility Finance Authority, the city agency charged with issuing bonds, including the ballpark bonds in 2001.
“I knew I didn’t have any agenda… and I don’t think Vortmann did” she said, “but if there was somebody else in that room that had a different objective, like Craver trying to get his bonds out the door, nobody ever said that.”
Craver
was out of town and didn’t return several messages left at his business, Galaxie Management Inc.
With Craver’s dual role revealed, the delays in drafting the report and other details have raised a lot of questions. For Boling and others, the fact that the ballpark offering was completed on the same day, Valentine’s Day of 2002, that the long-delayed Blue Ribbon Committee presented its report to Mayor Murphy behind closed doors suddenly seems like more than an eerie coincidence.
Moreover, the delays that occurred after the report was issued now seem troubling.
None of the members contacted could explain why, contrary to the original plan, the Blue Ribbon Committee was never reconvened a year after it issued its report
. Was their work simply forgotten, or had they already served both their intended and a possibly unstated purpose? How would a new look at worsening city finances have impacted the ballpark bonds now that they had been sold?
Tony Cherin, a finance professor at San Diego State University, said the concerns like those cited in Vortmann’s memo could have increased the already miserable yields on the bonds, and that’s not all.
The official disclosure of finances filed by the city on Feb. 14, 2002 claimed that the state Legislature requires the city to contribute funds to SDCERS at a rate approved by an actuary. The only problem was that while the statement was technically true, the city wasn’t doing it.
Moreover, if anyone found out the city lied in its disclosure documents, it could jeopardize the ballpark bonds and leave a partially constructed eyesore, and a huge political embarrassment, smack-dab in the center of East Village.
“If you knowingly and intentionally provide or withhold information about city finances, it’s securities fraud,”
says Cherin.
And Craver wasn’t the only person close to the Blue Ribbon Committee who also had ties to the ballpark. According to minutes of committee meetings obtained by CityBeat, Dennis Gibson, one of Murphy’s senior policy advisors and his liaison to the Blue Ribbon Committee, attended several committee meetings while simultaneously spearheading the mayor’s efforts to jumpstart ballpark development.
“In his role for the Mayor, one of Mr. Gibson’s primary policy responsibilities was to advise the Mayor and support all City and other agency efforts to complete the construction of Petco Park.”
That statement was issued last week in a city manager’s report announcing Gibson’s appointment as the city ballpark administrator for Petco Park.
Contacted at the mayor’s office Monday, Gibson promised to call back but never followed through. He didn’t respond to subsequent messages. Confronted with the memo, Murphy said, “Mr. Gibson received a copy of Mr. Vortmann’s letter to the Blue Ribbon Committee of April 29, 2002. Mr. Gibson took no action because the letter came two months after the Blue Ribbon Committee report was finalized.”
Gibson’s inaction is bringing additional heat to the Blue Ribbon Committee, the city’s ballpark bonds and the mayor’s office.
“This is the most damning memo I have seen to date in the entire city financial crisis in terms of intentional cover-up of the city’s financial problems,”
said DeMaio, “and it has the fingerprints right there of the mayor in terms of Dennis Gibson and his involvement….”
Aguirre, Councilmember Donna Frye and others are lining up to demand answers from Vortmann, who Aguirre says isn’t cooperating.

Breaking Stories, Reader, Feb.10, 2005, Excerpt: Hit the road, Jack Ex-San Diego city manager Jack McGrory has been sued for divorce by Cheryl, his wife of nearly 20 years. McGrory's controversial relationship with the Padres, for whom he went to work as a lobbyist and all-around Mr. Fix-It after helping the Chargers get their ticket guarantee, plays a role in the case. "Respondent is 54 years old and currently employed as an executive vice president with Price Entities/Price Legacies," Cheryl said in an August declaration. "Respondent has been so employed since 1997, except for a one-year hiatus when he worked for the San Diego Padres. Prior thereto, Respondent was the city manager for the City of San Diego. Respondent receives a monthly salary of $41,034.16. Also I believe he receives bonuses, options, and other valuable perquisites from his employment." The couple, who live in La Jolla and have three children (their daughter is a sophomore at USC), will be splitting their wheels, according to Cheryl: "I am the primary driver of the 2004 BMW 325. Respondent has been the primary driver of the 2004 Lexus." According to a statement filed by McGrory, he anticipates an eventual agreement "concerning the division of mutual property." So far, though, according to the filing, the case is still on, with the next hearing set for April.
R.I.P., not They say you can't take it with you, but try telling that to Helen Copley, who not only evidently took her cash with her to the grave but is giving it away from there. According to campaign-disclosure forms recently filed by the California Republican Party, "Helen Copley" of the Union-Tribune Publishing Company contributed $15,000 on September 22 of last year. That was almost a month after the 81-year-old publishing dowager's death on August 25.
The day before Copley made her contribution, son David, who now controls the newspaper chain, was listed as giving the same amount ... The campaign committee of late San Diego city councilman Charles Lewis, who died August 8 while under indictment in connection with the Cheetahs strip-club bribery scandal, turned over the bulk of its leftover cash, $6651, to San Diego State University's Campanile Foundation, whose chairman, local beer magnate Ron Fowler, was a big Lewis booster. (According to the county medical examiner, Lewis died of cirrhosis.) Among other charitable activities, Campanile boardmember Malin Burnham paid for the posh official residence of SDSU president Stephen Weber.

FINAL AUDIT REPORT, Dec. 28, 2004 (pg. 1), Save Mission Bay Save Our Parks (ID # 1242956)
F. Laurence Scott, Jr., Treasurer
Scott & Cronin LLP,
330 Encinitas Blvd., Suite 101, Encinitas, CA 92024
SAN DIEGO ETHICS COMMISSION AUDIT REPORT: Save Mission Bay Save Our Parks
I. Introduction
This Audit Report contains information pertaining to the audit of the committee, Save Mission Bay
Save Our Parks, Identification Number 1242956 (“the Committee”) for the period from July 1,2001, through November 25, 2002. The Committee was selected for audit by the Ethics
Commission at a random drawing conducted on October 9, 2003. The audit was conducted todetermine whether the Committee materially complied with the requirements and prohibitions imposed by the Political Reform Act (Government Code sections 81000 et seq.) and San Diego’s Election Campaign Control Ordinance (San Diego Municipal Code Chapter 2, Article 7, Division 29).

During the period covered by the audit, the Committee reported total contributions of $99,287.24 and total expenditures of $99,302.24 1. Both totals include $52,867.24 of unpaid bills converted to non-monetary contributions upon Committee termination. The audit revealed five material findings: (1) the Committee violated San Diego Municipal Code section 27.2903 by failing to disclose that it was candidate controlled; (2) the Committee violated San Diego Municipal Code section 27.2947 by making an organizational contribution to a candidate controlled committee when Committee funds were used to pay a debt for a candidate controlledcommittee; (3) the Committee violated San Diego Municipal Code section 27.2945 by failing to pay two vendors within ninety calendar days; (4) the Committee violated San Diego
The $15 difference between contributions and expenditures is a bank fee reported as an expenditure that wassubsequently reversed and reported as a miscellaneous increase to cash.
(see article below)

Audits find violations by two '02 campaigns, Reviews are first by ethics panel
By Matthew T. Hall, Union Tribune, Jan. 3, 2005
The San Diego Ethics Commission, which wants to increase the number of campaign finance audits it does in 2005, uncovered 11 violations by two local campaign committees in audits released last week.
The results are from the first audits the commission has done since being created in 2001 to enforce city campaign finance and ethics laws and to monitor for violations.
In 2003, the commission randomly chose four campaign committees from the 2002 city election for reviews of all documents maintained by a committee's treasurer, including checks, invoices, bank statements and deposit slips.
Committees for council members Donna Frye and Ralph Inzunza were selected, as were committees formed to retain the city's Mission Bay revenue for use in the area and to oppose a proposed Mission Beach alcohol ban.
The Ethics Commission is investigating violations that were uncovered in the Mission Bay and Mission Beach audits, with fines of up to $5,000 per violation possible.
The audit of the Mission Bay committee shows it violated the municipal code because it was controlled by then-Councilman Byron Wear and the relationship was not disclosed, and it made a contribution to a 2000 "Wear for Mayor" committee. Other violations include failing to pay two vendors within 90 days, disclose all costs and disclose all payments made by independent contractors.
The committee's treasurer, Larry Scott, has worked on local campaigns since 1988 and said the violations were unintentional oversights. He said he would be "irate" if he got hit by a big fine, as the commission has "changed the playing field."
"They're doing their first round of audits," Scott said. "They're going to pick up on things that have never been enforced before."
Wear said he wasn't aware an audit was being conducted or had been completed. He said he was raising money for the committee and denied being in control of it, adding that he relied on Scott to pay the bills.
Wear said he would cooperate with the Ethics Commission's investigation.
The audit of the committee formed to fight the alcohol ban shows it violated the municipal code by failing to maintain complete accounting records; disclose all contributions, costs and loans; report all costs by an agent; report all accrued expenses; pay vendor debt within 90 days; and report late contributions of $1,000 or more.
Bob Glaser, owner of The La Jolla Group consulting firm, took responsibility for maintaining the committee's records, which he said were three years old and scattered in supporters' garages and places of work.
Glaser acknowledged the violations amounted to "bad accounting" and said they are embarrassing, but added that the commission should take into account that the committee was small and made up of volunteers.
"I think that most committees with very small budgets are not going to have the same accuracy as those who have money to hire a (certified public accountant)," he said.
Audits for the two ballot measure committees were released Wednesday. Frye's audit was released in September, showing two technical violations that were never the subject of a formal investigation.
The audit found that Frye's 2002 re-election campaign improperly reported $2,100 from five contributions from joint checking accounts of husbands and wives by not having the husband and wife sign the check or an accompanying document saying the contributions should be split. An individual contributor can't give more than $250 per election.
The audit also found that Frye received five contributions totaling $800 drawn on business checking accounts of partnerships and corporations. Only individuals can contribute to a campaign. The campaign treasurer believed these businesses were sole proprietorships, which the City Clerk's Office said were allowed to contribute to campaigns at that time.
Inzunza's audit cannot be completed because his financial statements are the subject of a federal investigation and are inaccessible to the Ethics Commission's auditor.
Inzunza and Councilman Michael Zucchet await a May 3 trial on corruption charges. They are accused of improperly accepting money and favors in exchange for relaxing the city's no-touch rule in strip clubs. Both have pleaded not guilty and have said they accepted only legally reported campaign contributions.
With the first audits complete, the Ethics Commission and Executive Director Stacey Fulhorst want more auditing power.
They say it would offer the public more assurances that campaign finance forms are accurate and comply with state and local laws. They point to the San Francisco and Los Angeles ethics commissions, which conducted 25 and 28 audits, respectively, in the past two-year election cycle.
"One of the fundamental purposes of campaign finance regulation is disclosure of campaign activities to the public," Fulhorst said.
That makes random audits "absolutely imperative," she said.
"I intend to use that refrain about 50 times in the next three months," Fulhorst said.
Under its regulations, the commission randomly selects committees to be audited before April of every odd-numbered year. Before making its first selections in 2003, the commission indicated it would return to the City Council with a plan for how future committee audits would be chosen.
Commission Vice Chairwoman Dorothy Leonard said perhaps up to half of the committees formed during any given two-year period could be audited. Fulhorst said there could be mandatory audits for any committees that raise or spend more than a certain amount and a formula to determine which others would be audited.

San Diego committee looks into possible Brown Act violations
By KEVIN CHRISTENSEN, The Daily Transcript, January 31, 2005
A request from the City Council's new open government committee may result in the city filing a lawsuit against the San Diego City Employees Retirement System over a possible Brown Act violation.
Nearly three hours of Monday's committee meeting was spent discussing potential Brown Act violations by the San Diego City Employees Retirement System (SDCERS) in blocking Pension Trustee Diann Shipione from meetings and threatening citizen's arrest if she refused to leave.
Council members Donna Frye and Brian Maienschein agreed to have the city attorney's office look into possible remedies and methods for the city to pursue legal action against the pension board for violations of the Brown Act.
The council members also asked the city attorney to look at more expeditious ways for Shipione to attend closed session meetings.
Shipione, one of the primary whistleblowers in the city's pension fund crisis, was believed to have leaked privileged closed meeting information to an individual that had filed a lawsuit against the city.
The sole SDCERS member to attend the meeting, General Counsel Loraine Chapin, said there was no Brown Act violation.
Chapin, reading from a statement, said that on Nov. 19, the board had voted to bar Shipione from attending closed session meetings because of her alleged transgression.
Before the Nov. 19 meeting, Pension Trustee Charles Hogquist had attempted to arrange for police officers to attend the meeting in order to -- in the worst case -- arrest Shipione if she refused to leave.
An item to bar Shipione was not docketed because the board members just learned about Shipione's alleged illicit disclosure during the Nov. 19 meeting, Chapin said.

"It is important to distinguish between advance disclosures of an item to be discussed as required by the Brown Act versus advanced disclosure of the outcome of that discussion," Chapin said.
Chapin also said she couldn't answer any questions because City Attorney Michael Aguirre is investigating the department.
After reading the comment, Chapin abruptly left the room while Councilwoman Frye was asking a question.
Frye, also chair of the committee, said Chapin's departure illustrates the "arrogance" in which the retirement system board operates.
A presentation by Police Chief William Lansdowne showed inconsistencies in the Chapin's testimony, Frye said.

Lansdowne said calls requesting officers were received before the meeting.
Lansdowne said Hogquist, also a San Diego Police Department lieutenant, had a conversation with three representatives of the department about barring Shipione.
Because these conversations about the vote to bar Shipione occurred, it should have been on the docket, Frye said.
Vocal opposition
Shipione said one of the reasons she was barred from the board's closed session meetings was to allow the board to remove her vocal opposition to a settlement in a lawsuit against former attorney Robert Blum.
Blum, an attorney with the firm Hanson, Bridgett, Marcus, Vlahos & Rudy, was hired to advise the pension board on the City Manager's II agreement, which boosted benefits in turn for removing a pension funding safety net.
Blum changed his opinion about the plan, from giving 45 reasons to oppose the agreement that would approve an underfunding program in exchange for increased benefits in June 2002, to approving the plan in November 2002, Shipione said.
"It was always a mystery what happened between June and November with this man," Shipione said.
The SDCERS board approved the Manager's II plan in November 2002. It was later approved by the City Council.
The City Manager II agreement is said to be partly responsible for allowing the pension system to fall into the current $1.37 billion deficit.
The retirement system filed a lawsuit against Blum for malpractice.
Shipione said she had questions about the settlement of the Blum case with SDCERS because of information presented in the Vinson & Elkins report.

According to the report, Pension Trustee Cathy Lexin said the City Council had approved in closed session the benefit increase prior to the pension board's vote to underfund.
One of the key motivations for approving the lowering of the trigger was to receive the increased benefits, Shipione said.
Shipione said if the City Council had already approved the new benefits, then the attorney's opinion on the matter was not a determining factor, because the deal had already been done.
The fact is of crucial importance because a victorious suit against Blum alleging malpractice would likely lead to a settlement payment from Blum's insurance company.
If Blum's vote was moot in the approval of the agreement, the lawsuit alleging malpractice could be fraudulent, Shipione said.
"Now (SDCERS) was suing Bob Blum knowing that the whole thing was a set-up and we were going to his insurance company," Shipione said. "It would be potentially insurance fraud."
Shipione said she brought these questions up in the October 2004 meeting.
At the next meeting on Nov. 19, the SDCERS board voted to bar Shipione from future closed sessions.
Shipione was not present at the time of the vote.
Shipione said she was removed to allow a settlement with Blum, which would most likely include a gag order so that information about why he changed his opinion between June 2002 and November 2002 would not be disclosed.
This is consistent with SDCERS' typical action creating "lawsuit settlements to prevent 'discovery' of truth," Shipione said.

(Watchdog critique)
THE MAYOR’S BLUE RIBBON MESS, by Ron Carrico is a great article.
I to I brought this matter out a few months back.
I requested and received, from John Kern, a copy of the Blue Ribbon Committees' final report. The report stated explicitly that the Mayor was heading into stormy waters because of the pension underfunds and the deferments on projects and purchases.
I reminded the Mayor via E-M that he not only violated the City Charter but paid no heed to his own BRC.
I strongly suggested too that he get out of office or be recalled.There is no doubt there is plenty of evidence to recall him. He has no idea!
I really believe the mayor entertains a narcisism unparalled in neo political circles; along with Mike Neal, G. Mitrovitch, Mitch Miller, Burnham, Gwinn, Moores, et al. I am surprised they did not call themselves the "Untouchables."
Peter J. DiRenza, Foreman, S.D. Cty. Grand Jury-98-99, Anti-Corruption in Government

PLAIN SPEAKING, THE MAYOR’S BLUE RIBBON MESS
by Ron Carrico, December 30, 2004
Since there is sudden interest in San Diego city finances by the FBI, the SEC and our own City Attorney. Maybe now there will be answers to some questions that have bothered me for a couple of years now-and they have to do with Mayor Murphy’s Blue Ribbon Commission on City Finances.
At the beginning of his term in office, Mayor Dick Murphy set ten goals for the City in order for San Diego to be "a city worthy of our affection in the Year 2020."
Mayor Murphy recognized that these ten goals would require substantial financial resources. Therefore, he announced he would convene a
Blue Ribbon Committee on City Finances to make an independent evaluation of the City's fiscal health and make appropriate recommendations.
Mayor Murphy announced he felt this was necessary in view of the expensive future projects the city had in mind; specifically, the Padre Baseball park, the downtown library and new fire stations.
The result of the issued in early 2002 available on the mayor’s website
(http:\genesis.sannet.gov/infospc/templates/mayor/br022102finalfinaldraft.pdf) was that; "The city is basically fiscally sound. San Diego, as with any government entity, has fiscal demands which exceed current funding sources."
However the report stated, "The incumbent administration must publicly recognize issues and develop a plan to deal with them. First, they must recognize that there is deferred physical infrastructure maintenance issues that have suffered in favor of more visible needs...exceed $300 million. Second the city is partially deferring, until later years, the costs for pensions and retiree health costs. The committee is very concerned that the city is not paying our of it’s current year’s budget the full const being incurred...for pension...the city is not paying approximately $6-8 million a year for future pensions benefits." The report states they believed there was a shortfall of payments of at least $37 million from 1997 to 2001.
Because of some uncertainty the Blue Ribbon Commission report recommended that the city "obtain a current and comprehensive analysis...to determine the impact of future city finances." The committee wisely recognized "...the potential risk that policy makers grant benefit enhancements today to satisfy concerns, to negotiate trade offs with unions...."
Clearly, from these statements in their report, the Blue Ribbon Committee recognized there was pension underfunding and asked for a further m inquiry to determine the extent of the situation. What a lawyer would call "inquiry notice" had been served on the Mayor by his own Blue Ribbon
Committee.
Shortly after the report the mayor and a majority of the city council decided there was sufficient good news to issue bonds to build the downtown
Padre baseball park. And as we know nearly the bonds were issued- but at the incredibly high rate of 7.8%. This raises scenario raises at least three questions.
First, how could the Blue Ribbon Commission not realize that the pension shortfall was underfunded by hundreds of millions of dollars? Why were they so far off the mark?
Second, how could city officials go ahead with the ballpark bond issue knowing with the Commission’s statement that further inquiry was necessary for a comprehensive analysis?
Third what did the lender know that required the municipal bond rate to be the very high rate of 7.8%? Why couldn’t the city find a better rate when at the same time a homeowner could have gotten a 4% loan from a bank.
I am hopeful that the next few months of investigations by the FBI, the SEC and the City Attorney will reveal why Mayor Murphy’s Blue Ribbon idea has instead led the city to a financial, legal and political mess in San Diego.
Now,
less than two years after the commission’s report Mayor Murphy is barely holding on to his position as first class Blue Ribbon financial and political controversy grows by the day.
To say the least Mayor Murphy’s tenure as Mayor has been troubled and I am sure many problems are not his fault. However, the fact remains that under his watch the city has fallen in to political and financial disarray. In the corporate world or in sports when a franchise has failed this badly new leadership is called for.
Putting aside the vote counting challenges- it is clear from the outcome of the November 2 election that Donna Frye garnered more votes.
With all due respect to Mayor Murphy, whom I consider to be an honorable man, he is not indispensable. No one is. In fact I recall someone saying that graveyards are full of indispensable people. But the results of the past four years and the result of the mayoral election is that another person should be Mayor.
Therefore, I think the honorable thing for Mayor Murphy to respect the actual vote count, step aside, and ask the city council to determine that Donna Frye be sworn in as Mayor.

The Nov. 24 editorial "Voters want change,"
correctly noted that "the message from voters is plain: Sweeping change is required at City Hall."
The editorial went on to state that "Murphy must reach out to Frye and forge a partnership that can overcome the near-paralysis on such issues as the pension crisis and the city's collapsing financial standing. He might begin by appointing Frye to the ceremonial post of deputy mayor."
A review of Item S515 on the Dec. 7 council agenda seems to have made it clear that Murphy has no intention of reaching out to Councilmember Donna Frye – or to the many voters who supported her. He has actually reduced her presence on the standing council committees.
Being "boring" is not a character flaw (as Murphy was good-humoredly characterized by two council members at their inauguration Dec. 6). However, the inability or unwillingness to reach out to the leader of thousands of disenfranchised voters is a very serious character flaw – particularly for one who is in the key leadership position at the city. These actions come across as vindictive and petty. Not exactly the traits that we should be seeing in a mayor in these troubled times.
This does not bode well for the city as we move into the new year.
DAVE POTTER, San Diego
Union Tribune, Letters to the editor, Dec. 9, 2004
Where do I sign a petition to recall Mayor Dick Murphy?
A change from his running our city is overdue.
How many closed and secret meetings will there be now? We cannot let the city slip farther down in standings.
ALBERT MARCHMENT, San Diego
Union Tribune, Letters to the editor, Dec. 9, 2004

Dec. 9, 2004, Reader City Lights Breaking Stories
Out of court The campaign manager of county supervisor Ron Roberts's failed mayoral bid, Lisa Ross-Woolson, has cut a deal with the state's Fair Political Practices Commission to settle charges against her arising from 1997 city-council campaigns in San Marcos and Perris. Ross-Woolson "participated in a money-laundering scheme executed by her friend and employer, Colin Flaherty, by making five campaign contributions on behalf of Flaherty without disclosing to the recipients of the contributions that Flaherty was the true source of the contributions," according to the FPPC. She "then compounded her unlawful conduct by making statements to Commission investigators, denying that she had been reimbursed for her campaign contributions. Respondent had been engaged in a number of financial transactions with Flaherty during this time period. However, after re-examining the actual records regarding the reimbursements, Respondent recanted her prior statements, acknowledged that the reimbursements were for those campaign contributions, and cooperated in resolving this matter." According to the FPPC, Flaherty was laundering the money for Barratt American Homes. Under the settlement, set for approval at today's FPPC meeting in Sacramento, Ross-Woolson will pay a $7500 fine
.

Council Hit a Snag when Local Watchdogs Brought Out the Dirty Laundry on April Boling
Mr. Maienschein's Council recommendation on Tues. Dec 7, for April Boling's Day, was nixed when Council came back to resume the afternoon session.
It was not appropriate for the city to praise Ms. Boling after she has been f ined by the Ethics committee and appears she may be under further investigation.
Our City need not praise those that break laws and tarnish our City's reputation.
Now the ethics violations need to be addressed.April Boling:
1. April Boling paid $200 to settle two counts of ethics violations
Case No 2004-43 on Oct 14, 2004 involving the Police Officers Association.
2. April Boling paid a fine of $500 to settle two cases of ethics violations
Case No 2004-49 on November 18,2004 involving Friends of Dick Murphy.
3. April Boling has at least four other ethics complaints filed against her with respect to the two Donna Frye hit pieces by KEEP PAC
included in Case No 2004-59 filed on Nov 11,2004 and currently under investigation.
4. Ms. Boling is, therefore, not a paragon of ethical virtue so that it is outrageous for the proclamation to state she has a " commitment to the highest ethical standards"
5. Ms. Boling's admitted skills as a CPA have been used predominantly to hide campaign funds for conservative causes and then make them reappear when needed.
More recently she has helped the Mayor with damage control over the city pension fund and the city budget.Her services to the public are much more limited in scope.
You will also note the hyperboli in the Resolution:"April worked to save taxpayers millions of dollars"
"April's positive contributions to the overall fiscal health of the San Diego region have been immeasurable"
"...the vital services April Boling has provided the citizens of San Diego"
THIS RESOLUTION IS A SHAM DESIGNED TO CLEAN UP THE TARNISHED BOLING IMAGE IN THE PUBLIC MIND AND SHOULD BE EXPOSED AS SUCH

Tangled web, Ethics Commission investigation could expose who's behind anti-Frye mailers
by Daniel Strumpf, CityBeat, November 24, 2004
The little boy's expression says it all, and days before the Nov. 2 election his tear-stained mug landed in hundreds of San Diego mailboxes. He adorned a mailer accusing mayoral candidate Donna Frye of jeopardizing the city's "6 to 6" before- and after-school program. The mailer urged recipients to call Frye's office and "tell her she should support San Diego's children."
At the same time, another flyer hit mailboxes, accusing Frye of voting to boost her own pay while cutting funding for city police and of being "the only member of City Council who has no position on how to solve the pension crisis."
Funded by a local political action committee known as the Coalition to Keep San Diego working (KEEP PAC), the fliers-seen by many as political hit pieces-quickly became a source of controversy due to their last-minute timing and KEEP PAC's failure to file independent-expenditure reports with the city clerk's office-a move that has allowed the group to remain relatively anonymous.
While this pre-election hullabaloo was eclipsed by the post-election legal challenges to Frye's candidacy and battles over vote counting, it has not been forgotten. Not by Frye, and not by city watchdogs Mel Shapiro and Ian Trowbridge.
Earlier this month, Trowbridge filed a complaint with the city's Ethics Commission alleging that KEEP PAC's treasurer, April Boling, and Top of the Cove restaurateur Ron Zappardino (named by Boling when asked to identify the group's other officers) violated at least four campaign finance laws by failing to report an independent expenditure (an election-related communication to voters not coordinated with a particular candidate), exceeding the maximum $250 limit an individual is permitted to contribute to an independent expenditure, accepting contributions from sources other than individuals and failing to indicate on the mailers that they were not authorized by a candidate or committee.
Last Friday, the Ethics Commission announced that it had voted unanimously in closed session to authorize an investigation into complaint number 2004-59, which corresponds to the number issued to Trowbridge's grievance. The Ethics Commission will have to decide if the mailers were intended to influence the election-making them an independent expenditure-or if they were simply advocacy pieces about salient issues of the day.
"That's the legal question that this whole thing turns on," says Boling, who has some experience with the Ethics Commission. On Monday, the commission published an agreement under which Boling will be fined $500 in a separate matter. It was her second violation of election code this year.
The commission's ultimate decision could result in additional penalties and help clarify what exactly qualifies as an independent expenditure. The definition in question is found in the city's Election Campaign Control Ordinance, which describes an independent expenditure as "any expenditure made by any person in connection with a communication which taken as a whole and in context, unambiguously urges a particular result in a City election."
Trowbridge argues the mailers qualify.

"Taken 'as a whole and in context' the timing of this mailing two days before the election, its effort to portray mayoral candidate Donna Frye in a negative light both by its text and photos, and its attempt to conceal from the voters who had paid for the mailing would lead any reasonable individual to conclude the mailing was an effort to 'urge a particular result in a city election,'" he wrote in his complaint. "In addition, Keep PAC [sic] has no prior record of advocating for the 6-to-6 child-care program or any other related social issue."
Contacted by CityBeat, Zappardino referred all questions about KEEP PAC to James Sutton, the committee's San Francisco attorney. Dubbed the "dark prince of campaign finance" by the San Francisco Bay Guardian, Sutton is known as a heavy hitter in San Francisco politics with a history of attempting to help well-funded clients out of tough legal situations. He also has been the focus of numerous campaign-finance scandals and has the honor of receiving the largest ethics fine in San Francisco history-$240,000, according to the Bay Guardian.
Sutton isn't a new face in San Diego. In January, he testified before the Ethics Commission as a registered lobbyist for the Lincoln Club, a conservative political group, opposing a proposal to strengthen local campaign-finance law, and he represented Ron Roberts in a 2002 Ethics Commission investigation into unpaid campaign debts.
On Monday, Sutton said he was unaware of the Ethics Commission investigation but says Trowbridge's allegations are unfounded and the laws they are based on are unclear. He also says local law clashes with state law and may violate the First Amendment.
"First of all, the pieces don't talk about the election, [and] they don't talk about opponents in the race. They simply talk about a public policy issue and where a particular public official stands on that issue," he says. "If the law is not clear, you can't enforce it."
Sutton says KEEP PAC will file appropriate papers related to that advocacy after the December filing deadline.
While Zappardino's role with KEEP PAC remains unclear, he is the president of the California Restaurant Association (CRA) as well as a board member of the San Diego Restaurant Association and a member of the SDRA's governmental relations subcommittee, which controls the San Diego Restaurant and Beverage political action committee. All of these organizations are connected in a complex arrangement to fund KEEP PAC. Boling also serves as the treasurer for the SDRA and its PAC.
KEEP PAC's filings list its sole source of funding as the San Diego Restaurant and Beverage PAC, which donated $10,000 in March.
Restaurant and Beverage PAC campaign statements list that donation, as well as a $25,000 donation from the California Restaurant Association as the Restaurant and Beverage PAC's sole source of income.
But on Oct. 5, months after the June filing deadline, Boling amended the Restaurant and Beverage PAC filings to include $55,000 in contributions from approximately 100 local restaurants and businesses that were routed through the CRA before landing in the Restaurant and Beverage PAC's bank account after it donated to KEEP PAC.
Where did that chunk of change come from, and why the delay in reporting it?
Boling, who is also the treasurer for Mayor Dick Murphy's reelection campaign and for the Lincoln Club,
says the funds were generated by the CRA's Golden Medallion Awards Banquet and Auction in May. Murphy attended as an awards presenter. Boling says the delay was caused when the CRA changed accountants shortly after the banquet, and confusion and errors resulted.
While a lack of current documentation makes it impossible to determine exactly what happened-if any of those donations were funneled to KEEP PAC or used to fund the anti-Frye mailers-an Ethics Commission decision could force that information to surface early or delay the report until the January campaign-expenditure filing deadline. In the meantime, the list of contributors has raised some eyebrows, many belonging to the contributors themselves.
CityBeat spoke with some restaurant owners whose businesses were listed as donors, and most said they believed their donations were being used to oppose Prop. 72, the failed ballot initiative that would have required businesses with more than 50 employees to provide health insurance. None of those contacted said they were aware of the possibility that their money could have been used to influence the mayor's race or advocate for the "6 to 6" program.
Others weren't even aware that they had made a donation.
The San Diego State University Foundation launched an internal investigation after it learned that it had unknowingly contributed $120 to the Restaurant and Beverage PAC.
"The donation to the San Diego restaurant and Beverage Political Action Committee was not authorized by the San Diego State University Foundation or intended to be used in support or opposition of any candidate running for public office," says Theresa Nakata, director of community and public relations for the foundation. She added that San Diego State University staff attended the banquet and failed to check off a box on the registration that would allow them to opt out of donating to the political action committee.
"At the bottom, in probably less than 6-point font," Nakata says, "there is some copy that says if you don't want $60 of your $120 ticket to go to the political action committee, check this box."
A San Diego Convention and Visitors Bureau spokesman told a similar story about his organization's $600 donation. Both groups are nonprofits that receive public funding and say it's against their policies to make any types of political contributions
. They're subsequently asking for refunds.
Other notable banquet attendees who donated funds to the Restaurant and Beverage PAC via the CRA banquet include the San Diego Union-Tribune ($1,200), San Diego Gas and Electric ($600), San Diego Magazine ($600) and Jefferson Pilot Communications, owner of five local radio stations ($120).
Frye says she's not sure why local restaurateurs might align against her, but she says voters have a right to know who is behind KEEP PAC.
"Absolutely the public has a right to know who is sending these out and who is paying for them," she says. "Advocacy pieces are sent out as a way to get around election laws… to make it sound as if it is not an election piece."
She wants to know why she was singled out for cutting "6 to 6" funding when every other member of the City Council, including the mayor, voted the same way, and why those mailers were sent out just days before the election.

November 9, 2004, I filed a complaint against Murphy with the San Diego Ethics Commission for malfeasance in office.
  My complaint against him was that he knowingly and willingly violated the San Diego City Charter in that he was responsible for the continuation of the underfunding of the pension fund,  thereby creating a very tenuous financial situation for the citizens of this city. As the Chief Executive of this City he had the filduciary responsibility to oversee and protect the taxpayers' money.  He did not. He thereby also violated his oath of office.
 Murphy does not deserve to be Mayor of this City;  he is unqualified as a executive, manager or leader.  As a result  he depends on government outsiders such as George Mitrovitch, Malin Burnham, John Howard, Mike Neal, John Moores, Mitch Mitchell, April Boling, et al,  to run his office, but they do not accept blame for what has gone wrong.  In fact, none of them know the first thing about Political Science; but they all know the color green.
 Does anyone in this city really believe that an incompetent such as Murphy should be considered as and hold the title of "Strong Mayor"? 
 I am very anxious to see what kind of a response I receive from the Ethics  Commission. It will be interesting, to say the least.— Peter DiRenza

Redevelopment official fined over income, votes on library, Ethics board also penalizes carpenter
By Matthew T. Hall, Union Tribune, December 20, 2004
Architect Hal Sadler, chairman of the board for the Centre City Development Corp., has been fined $6,000 by the San Diego Ethics Commission.
Sadler, whose former architectural firm had a contract to work on the planned downtown library project, was fined for failing to disclose income he received from the firm in 2003 and for voting on three issues related to the library as a director of the city's downtown redevelopment agency in 2003 and in May.
The Ethics Commission announced the fine Thursday night along with a $900 fine against Gregory Diethrich, a member of the City Heights Project Area Committee, who submitted a late annual statement of economic interests.
Sadler voted for the Centre City Development Corp.'s last two budgets, which contained line items providing a combined $22.2 million for the library.
He also voted on a series of tax-allocation bonds in the amount of $147.7 million this year that listed the library as a potential recipient.
The redevelopment agency's board re-voted on the three items last month and passed them all, with Sadler abstaining.
Sadler said Friday that he had abstained from voting on those items at the committee level but inadvertently voted when the issues came before the full board during the past two years.
"I agreed to pay the money. It's my fault, and I had no choice," Sadler said.
He said he didn't include his consulting fee on his annual economic interest filing because the architectural firm is outside the downtown redevelopment district and he didn't think it was required.
Sadler retired from the architectural firm in 2002 and divested himself of any ownership, but receives an annual consulting fee, he said. He remains chairman of the board for Tucker, Sadler, Noble, Castro.
Diethrich, a member of the City Heights Project Area Committee and a carpenter, filed his 2003 statement of economic interests 145 days late. He had filed his 2002 report 56 days late. Neither statement reported any investments, real estate holdings, income, gifts or loans.
He said he will pay the fine, though he called it a financial hardship.
"It seems ridiculous to me that you can go through a red light and endanger the lives of people and not pay as much as you would for turning in a piece of paper late," Diethrich said. "It seems like they are picking on people who do volunteer work.

The political puppeteer (Note:: Jim Sutton w/ links to insiders is opposing Donna Frye) Campaign attorney Jim Sutton has used his connections, legal knowledge, and aggressive strategies to become the go-to guy in San Francisco politics.
By Savannah Blackwell, February 4, 2004
BY OFFERING ENVELOPE -pushing legal and political advice at key moments in the fall campaign, attorney Jim Sutton was perhaps the single most influential individual behind the victories of Mayor Gavin Newsom and District Attorney Kamala Harris.
In the process, Sutton solidified his reputation as the dark prince of San Francisco elections, a hired gun who helps downtown interests and well-funded campaigns continue to dominate the electoral field even after voters passed reforms that restricted campaign giving and spending and required more official disclosure.
"He knows more election law than anyone, and he knows it better than anyone else," local political consultant David Looman told the Bay Guardian. "He is the guy you call."
New era, new player
Sutton, 40, stepped on the political stage just as voters were going to the polls in the fall of 1997 to demand more transparency in campaigns, a reaction to the leadership of Mayor Willie Brown and the dealings of powerhouse consultants like Jack Davis and Robert Barnes. At the time Sutton worked for Nielsen, Merksamer, Parrinello, Mueller, and Naylor, a Mill Valley firm that specializes in election law.
Sutton took on mostly big-money campaigns backed by downtown interests – such as Brown's 1999 reelection and Pacific Gas and Electric Co.'s successful, multimillion-dollar bids to squelch the public power movement in 2001 and 2002. Highly versed in the minutia of campaign finance law, he became a major player in electoral politics in San Francisco – and across the state.
"He is one of a small handful of very influential political law attorneys who typically represent moneyed, influential candidates," California Common Cause executive director Jim Knox told us. "And he seems to be on something of a crusade right now."
A search of the San Francisco Ethics Commission's online database shows that over the past six years, Sutton has acted as treasurer or in another legal capacity for at least 20 campaigns and counts such heavily funded political action committees as the Golden Gate Restaurant Association, the Alice B. Toklas Lesbian Gay Bisexual Transgender Democratic Club, and the San Francisco Association of Realtors among his permanent clients. For that work, which doesn't include the fall election, he earned at least $750,000.
Many of the city's progressive activists and leaders see him as a dark agent – a tool only well-heeled interests can hire to navigate regulatory loopholes in order to spend as much as possible, even it means pushing the limits of the law, to sway voters.
"He's an opportunistic lawyer who works against populist issues," Sup. Tom Ammiano said.
Moreover, activists and state campaign finance experts say, he exerts an extraordinary level of influence over the city's campaign regulators, including the top staff at the Ethics Commission and the deputy city attorneys who work with that agency.
"He is a high-powered fixer who has relationships with people in power that let him deliver for his clients in a way that leaves the less-connected among us flabbergasted," said Marc Solomon, a Green Party member who worked on Sup. Matt Gonzalez's mayoral campaign.
For his part, Sutton says that's nonsense.
"There's absolutely no proof or evidence of that," Sutton told us. "I'm a professional, and I don't want special access. I don't need it, because I have a knowledge of the law."
Rising to the top
By the time Sutton left his old firm last May to create Sutton and Associates, he had sealed his reputation as a go-to guy and counted among his clients the man who would be mayor. Sutton was everywhere. Consider:
• Having lawyered Newsom through the embarrassing flap in early 2003 over the $1 million loan from mentor Gordon Getty that (whoops!) Newsom neglected to disclose on his economic interest statements, Sutton served as treasurer to the Marina District supervisor's mayoral campaign.
• When district attorney candidate Harris's consultants realized their client was facing disaster if they couldn't get her out of a legally binding pledge she signed in January 2003 to abide by the spending limits set in that race, they summoned Sutton, who got her out of the jam. The Ethics Commission's decision to lift the spending limit was one of the agency's most egregious acts in years and was truly an extraordinary event, activists say. It allowed Harris to spend hundreds of thousands of dollars to get past Bill Fazio in the runoff and eventually beat incumbent Terence Hallinan.
• Sutton handled the regulatory filing procedures for the California Urban Issues Project, a nonprofit lobbying outfit that churned out campaign mailers slamming Hallinan and mayoral contender Gonzalez for, among other charges, an unwillingness to crack down on the activities of homeless people. Though the group's status prevents it from taking positions on candidates, the mailers clearly favored one candidate over the other. However, since the pieces didn't actually include a "vote for candidate X" command, they fell within the bounds of the law as recently interpreted by the appellate courts, Sutton told us.
"What I do is say, 'I am the lawyer. It's my job to say this is what the law says. This is what it does or doesn't allow,' " Sutton said. "It's not about any kind of ideology on my part."
• Sutton also served as treasurer for the campaigns behind two successful measures funded by downtown interests: the clean-streets initiative (Proposition C) and the controversial anti-panhandling legislation sponsored by Newsom (Proposition M). Interestingly, Harris particularly benefited because of her support for Prop. M. San Francisco pollster David Binder told us in December that her position on Prop. M helped her win over much of Fazio's base and was key to her victory.
• Sutton's expertise helped Newsom and Harris raise money in larger chunks during the runoff than they might otherwise have done. That's because Sutton is keenly aware of a detail in the city's campaign finance law that says if a candidate carries "accrued expenses" from the general election to the runoff, that candidate can collect $500 (instead of $250) from contributors. He should be – the ruling came as a result of his suggestion to local regulators.
For practical purposes, it can become a matter of shuffling the books. Newsom and Harris had so much cash behind their candidacies that it's tough to believe they had any real debt. And in the case of at least Newsom, the amount of "debt" certainly seemed to be a moving target.
Shortly after the general election, Newsom campaign manger Eric Jaye told us he thought Newsom bore roughly $30,000 in accrued expenses. But when the campaign filed the paperwork, Newsom showed $225,322 in unpaid bills (see "Tainted Dough," 12/03/03).
Neither Hallinan's nor Gonzalez's campaign took advantage of this provision in the law, even though Gonzalez treasurer Randy Knox brought it to the candidate's attention. Gonzalez told us at the time that he didn't consider such a move ethical.
Learning the ropes
A self-described politics nerd who interned in his state assemblymember's office in high school, Sutton credits the rigors of the tight-knit environment of Pomona College – more than his three years at Stanford University Law School – with influencing the way he works today.
"I learned early I wasn't going to get away without doing my homework," he told us.
After clerking for former California Supreme Court Justice Edward Panelli from 1988 to 1989, he searched for a way to combine his legal degree with his keen interest in politics and government. In 1990 he found his way to Nielsen, Merksamer, though he lived, as he still does, in San Francisco.
Since he knew the city, he evolved into the firm's attorney who dealt with San Francisco matters, he told us, even though he's a member of the Republican Party – a rare bird here. In fact, he even served a stint as general counsel for the California Republican Party.
His first work in the city was on behalf of large institutions – the M.H. de Young Memorial Museum's early bond campaigns, for example. He also made a key alliance with consultant Barnes, who was on his way to building a hugely influential career here and becoming closely connected to former mayor Brown.
In spring 1998, Sutton acted as treasurer for Bay Beautiful, a PAC aimed at defeating Proposition K, which former state senator Quentin L. Kopp put on the ballot to restrict Brown's control of the development of Treasure Island. (Though the measure passed, the Brown-controlled Board of Supervisors failed to implement it.)
In November 1999, Sutton played a role in the orchestrated independent expenditure campaign on behalf of Brown's reelection efforts in his handling of the Willie Brown Leadership PAC. The PAC directed some $55,000 into Brown's bid for a second term (see "The Soft Money Shuffle," 2/16/00).
At the time, Sutton had gone public with his strong opposition to efforts to restrict spending in political campaigns, writing in the San Francisco Examiner, "Not only does a spending cap decrease the quantity and quality of the issues discussed in the campaigns, it also infringes on First Amendment rights."
One year after Brown's reelection, the Leadership PAC, together with the pro-downtown Committee on Jobs, pumped some $67,000 into an unsuccessful bid to defeat Proposition O, which reinstated limits on independent expenditures and provided public financing for campaigns. Sutton handled the legal work for No on O.
No surprise there, Sutton's critics say. Where money seeks to influence politics, that's where you'll find him. Sutton, though, says the list of campaigns he's served doesn't reflect his ideology as much as it does his skill set. He told us the best-funded campaigns "tend to have the more complicated legal questions, since they're going to do more stuff."
Money and politics
Advocates of campaign finance reform say Sutton has taken his opposition to campaign spending limits on the road, seeking to erode local ordinances that restrict spending.
"Sutton is active all over the state in his opposition to campaign finance reform," said Paul Ryan, political reform project director for the Los Angeles-based Center for Governmental Studies.
Most recently Sutton testified before the San Diego Ethics Commission at a Jan. 21 hearing on a proposal to strengthen local campaign finance law. Sutton argued the commission should repeal the local law and replace it with the state's version, which happens to be weaker.
"When we wrote the Political Reform Act of 1974, we put in there that local laws could be stronger than the state law," Center for Governmental Studies director Bob Stern said. "What we have now is about 100 cities and counties that have gone beyond the state law. What [Sutton] is doing is pushing local jurisdictions to follow the state law only. And that's unfortunate, because each local jurisdiction needs to deal with its own problems."
Sutton said he just wants a uniform standard, with the minimal local amendments.
"[Cities and counties] keep making more and more laws, which are making things more and more complicated and difficult for anyone who wants to run for election to figure out," Sutton said. "It has a dampening effect."
Ryan and others are concerned Sutton might succeed in discouraging officials in municipalities such as Los Angeles and San Francisco from sticking by their stronger local laws. Compounding their concerns is that Sutton appears to have a great deal of influence over regulatory officials – at least in San Francisco.
Charlie Marsteller, who formerly headed up a San Francisco chapter of California Common Cause, believes the Ethics Commission has for more than a year failed to act on a complaint he filed against Sutton in late 2002, because of Sutton's influence on the agency. (The complaint was over Sutton's failure to disclose some $800,000 in contributions from PG&E to a committee aimed at defeating Proposition D, another public power measure.)
"It seems to me they are waiting until after February, when a seat on the commission is up and they'll be able to replace [Bob Planthold] with a Sutton-friendly commissioner," Marsteller said. (Assessor-Recorder Mabel Teng is expected to name Planthold's replacement any day now.)
More recent examples activists point to include the Harris spending-cap matter and the latest: a charge made Jan. 16 by two Ethics Commission staffers that director Ginny Vida ordered the destruction of documents accidentally e-mailed to the agency by a secretary in Sutton's office. Those documents, which were first reported on in the San Francisco Sentinel, strongly suggest that funds raised by the San Francisco Swearing-In Committee (without contribution limits) for Newsom's inauguration were used to pay off a long list of consultants who worked on the campaign – a charge Sutton has vehemently denied.
On Jan. 28, Sutton filed paperwork for the committee reporting contributions but not expenditures. The total raised was $317,850 and included donations of $10,000 to $20,000 from such downtown players as Shorenstein Co., Gap founder Don Fisher, the San Francisco Association of Realtors, and Clear Channel.
Though Sutton insists he enjoys no undue influence on local regulators, even one of Harris's consultants told us Sutton was hired for just that reason. "Jim Sutton has a certain amount of influence with Ginny Vida. He doesn't think [spending limits] are constitutional," Looman said. "And I believe that worries her too."
Vida was on medical leave and couldn't reached for comment, but her deputy, Mabel Ng, said neither she nor Vida give Sutton special treatment.
"I don't think he has any more or any less influence than anyone else," Ng said.
Dealing with Ethics
Sutton's most impressive act in the Harris controversy was convincing Vida and Ng that Harris didn't know she was bound to the pledge she signed in January 2003 to stay under the spending cap. Had ethics officials concluded that Harris knew her pledge was binding when she blew the cap sometime in September, they could have disqualified her from the race, according to the terms of the city's campaign finance law.
Instead the Ethics Commission signed onto a settlement agreement stipulating that Harris's had been an innocent mistake – though there was plenty of evidence that her campaign officials fully knew the pledge was binding (see Campaign Watch, 9/17/03 and 10/08/03). But in buying into Sutton's version of events, the commission allowed Harris to continue spending money that helped her win the race.
"To facilitate the needs of Sutton's clients, [Ethics] staffers gave in to Sutton the way he wanted," Marsteller said. "The commissioners dropped the ball in that they needed to request an audit to check out the veracity of the statements being made by Harris.... They could hardly decide that the violations by the Harris committee were unintentional absent an audit. It's one of the greatest demonstrations of incompetence I've seen, and Sutton led them into it."
For his part, Sutton disagrees that Vida gave him an easy of time of it. "They fined [Harris] $34,000, and they made sure we printed flyers and ads telling the public of the mistake," Sutton said.
That's true. But Ryan and others view the matter as strong evidence of Sutton's influence.
"It appears as though many of the arguments he makes personally are then likewise made by Ginny Vida and Mabel Ng," Ryan said. "It appears as though Jim Sutton is influencing the public policy and San Francisco and the interpretation of the city's finance laws."

ETHICS COMPLAINT FILED AGAINST APRIL BOLING CPA (by Ian Trowbridge)
(7185 Navajo Road, Suite L San Diego, CA 92119, phone 619- 667-7650 ), TREASURER OF KEEP PAC ALSO KNOWN AS " COALITION TO KEEP SAN DIEGO WORKING" ( Entity I.D. 1264374), AND AGAINST RON ZAPPARDINO. ( Owner Top of the Cove la Jolla)
Background:
On Saturday October 30, 2004 a mass mailing (as defined by CA Gov. Code 82041.5) was received at numerous San Diego addresses throughout the city that according to SDMC 27.2903 meets the criterion of an independent expenditure as defined as follows:" taken as a whole and in context, unambiguously urges a particular result in a city election"
Taken "as a whole and in context" the timing of this mailing two days before the election, its effort portray mayoral candidate Donna Frye in a negative light both by its text and photos, and its attempt to conceal from the voters who had paid for the mailing would lead any reasonable individual to conclude the mailing was an effort to " urge a particular result in a city election".
As such this mailer qualifies as an independent expenditure.
Further evidence in support of this contention is the story that appeared on November 1,2004 in the Union-Tribune written by senior political reporter Phil LaVelle The reporter nor anyone else quoted in the article believed this mailer was an advocacy piece about the 6-to-6 child-care and not a false negative piece of campaign literature intended to influence the mayoral election.
The mailing likely exceeded $1,000 expenditure and 200 pieces of mail and was mailed within 16 days of the election.
Mr. Zappardino is named in this complaint because when I asked April Boling, Treasurer of Keep PAC during a phone conversation on November 1, 2004 who were the officers of Keep PAC she identified him as the person I should talk to. When I later the same day Mr. Zappardino did not deny involvement in the mailing and implied he was involved but was not willing to discuss his role (see below)
Negative political mailing hits Frye, Angry candidate challenges pamphlet as distorted
By Philip J. LaVelle, Union Tribune, November 1, 2004
By the look of the political pamphlet that landed in mailboxes Saturday, you'd think Donna Frye stole Christmas.
The mailer seeks to give the impression that the city of San Diego slashed its popular 6-to-6 child-care program – and that Frye, a council member running for mayor as a write-in candidate, led the charge.
Earlier this year, the city manager proposed charging parents fees for the program as one of many ways to close a budget gap. Frye said she was opposed to charging for the program.
The state later came through with funding help, and the council opted against the fees when it unanimously passed its annual budget in June.
About 25,000 children continue to participate for free.
"I think the thing that offends me the most is the fact that it's gutless and anonymous," Frye said yesterday of the late mailer, which was sent three days before the election.
The campaign piece has two photos of little boys on the cover, one staring sadly at the ground, the other bawling his eyes out.
Inside is a grainy picture of Frye in sunglasses.
The headlines in bold-faced type include: "A school program at risk."
"700 Children told '6-6' is CLOSED."
"Call Councilwoman Frye and tell her she should support San Diego's Children."
Her office telephone number is listed.
The mail piece was sent by the Coalition to Keep San Diego Working. No officers are listed.
"It distorts the record and hides who these people really are who are behind these political-action committees," Frye said.
"If someone wants to say something about me, have the courage and the courtesy to say who you are. Put your name on it. Don't hide behind some organization that can't be tracked – at least not easily," she said.
The group formed last year as a business consortium opposed to efforts to establish a "living wage" law in San Diego – which Frye supports – which would boost wages for city and contract workers.
Nonprofit organizations that provide 6-to-6 services also objected to boosting wages at a hearing last year, arguing it would cause severe hardship.
The coalition's mailing address is the same as the business address for April Boling, who serves as treasurer to several local political campaigns, including Friends of Mayor Dick Murphy and city attorney candidate Leslie Devaney. Boling could not be reached yesterday.
Campaigns for both Murphy and candidate Ron Roberts said yesterday they had no advance knowledge of the Frye mailer or of a pro-Roberts mailer sent by another group listing Boling's address.
It is unclear how many mailers were sent.
Like the Frye piece, the mailer touting Roberts, a member of the county Board of Supervisors, lists his office phone number, but with a different message:
"Call Supervisor Ron Roberts and tell him to keep up the good work!"
It was sent by the Builders, Associates, Contractors PAC, also called BAC PAC.
BAC PAC has reported late independent expenditures on behalf of San Diegans for Congestion Relief, Republican Assemblywoman Shirley Horton and Republican Assembly candidate Tricia Hunter, according to the California secretary of state's Web site.
The Coalition to Keep San Diego Working, also known as KEEP PAC, has filed no disclosure reports this election cycle, suggesting it is dormant, according to the secretary of state.
The Frye piece takes liberties with news reports.
In several places, it cites a May 16 article in The San Diego Union-Tribune as a source.
The news story reported on City Manager Lamont Ewell's proposals for $26.9 million in cuts, including to programs where kids spend lots of time – libraries, parks, recreation centers and the like.
The story did not mention Frye.
But the mailer, in red type, gave a different impression, saying: "Under the plan Councilwoman Frye and City Council supported, 700 children were told they weren't welcome in San Diego's model child care program."
It also includes a quote from Councilwoman Toni Atkins, who called the proposed fees "awful." Frye said yesterday that she worked with Atkins – who has endorsed her bid for mayor – to seek ways to avoid the fee hikes.

Recalling the record of former city manager, 5/27/03, Union Tribune, Letter to editor
Well, well, well. Look who's heading San Diego's citizen task force on affordable housing. None other than former San Diego City Manager Jack McGrory. Let's review a few of the wonderful cost-saving programs he brought to San Diego county taxpayers:
 The Charger ticket guarantee; giving the Spanoses an $11 million training facility; increasing sewer fees to pay for an unneeded secondary treatment facility, then instead of eliminating the additional fee, using it to disguise budget deficits by redistributing the funds for other city expenses; selling off city properties to make up budget shortfalls; mismanaging funds dedicated by the voters to street repairs and improvements by distibuting them elsewhere; hiding stadium construction defects from the public brought to his attention by an ethical contractor; selling naming rights to the stadium for a paltry $18 million.
 And, how can we not give credit to the big guy for undercontributing to the city employees' retirement fund, another ploy to lead the taxpayers astray?
 Of course, credit must be shared with others.
 I can't wait to see his next hoodwinking scheme come before the voters. Some say the past is indicative of the future. Hmmm, I wonder. D.T. RADMILOVICH
Slime Pays, By Don Bauder, Reader, May 29, 2003 http://www.sdreader.com
 'Anything Goes." Cole Porter wrote the music and lyrics. But it became San Diego's theme song. We don't yet know if any city councilmembers solicited bribes or improperly took money from strip-club operators wanting looser laws. But we do know that in recent years, San Diego's corporate/government power structure has been conducive to palm-greasing.
 Government at various levels has sent out the message that it was not going to peer under the table to see what was passing from the fat-fingered to the sticky-fingered.
 Pelf passer and pelf payee had few reasons to believe that they would be detected, and if detected, that they would be prosecuted. Apologists say the mentality grew out of the city's desire to be known as business-friendly. Others blame law-enforcement lethargy. But the wise describe it as a rancid environment bunch of employees of a favor-seeking company and its boss all giving the maximum amount to a political candidate. When the boss reimburses the employees, it becomes campaign money laundering.
 Last year, civic activist Mel Shapiro gave the commission information on employees of a trash-hauling company all giving the same amount to two city councilmembers on the same day. The commission nonetheless described his complaint as "an expression of opinion," not factual information. In replying to the commission, Shapiro cited one part of a long-running campaign money-laundering case that had already been ruled upon by the state Fair Political Practices Commission (FPPC).
 In this case, trash hauler James Mashburn and a company he co-owned, Refuse Services, in early 1999 agreed to pay the fourth-largest campaign-money-laundering fine in the commission's history, $249,500.
Mashburn admitted that he reimbursed employees who made political contributions in cash -- thus making discovery hard to trace. Through these maneuvers, he had given money to Mayor Susan Golding, five county supervisors, and politicians in North County such as Poway's Mickey Cafagna. The fair practices committee passed on the information to the district attorney's office, but then-DA Paul Pfingst decided not to prosecute.
 Then there is the case of Gatlin Development, a real estate firm. According to the FPPC, between 1992 and 1994, the company made 107 campaign contributions to members of and candidates for city council and the board of supervisors, along with other politicians. At the time, the contribution limit was $250. Most of the contributions from Gatlin employees and their spouses, along with members, relatives, and business associates of Gatlin's law firm, were for $250. When the word of the generosity got around, chief executive Frank Gatlin received calls from other politicians asking assistance in fund-raising, according to the fair practices commission.
 Frank Gatlin reimbursed his employees for the gifts. Since the practice persisted for a year and a half, the FPPC said it "indicates a pattern of laundering activity, rather than an isolated incident." Gatlin and the law firm were fined $420,000. The FPPC referred the matter to Pfingst, who kicked it to the city attorney's office. They wouldn't touch it.
Both cases "should have been prosecuted as criminal cases," says former DA Ed Miller. "A lot of prosecutors don't want to make waves with people who have a lot of clout." But making such cases criminal would be a "significant deterrent" to campaign money laundering, says Miller.
 And that's the point. For many years, there have been very few deterrents to such activities. Deputy District Attorney Rupert Linley remembers being told, when he was transferred out of the DA's environmental unit in 1997, "The DA's office wanted to be more business-friendly." That's one reason he opposed Pfingst's reelection bid. Linley says that Dumanis "wants strict enforcement."
 There are multiple examples of the symbiotic relationship of politicians and businesses wanting favors. In mid-2000, the locally based Corky McMillin Companies won the contract for development of the former Naval Training Center over a larger, much better-financed, out-of-town company that had been recommended by a special blue-ribbon selection committee. According to Save Our NTC Inc. McMillin got $1 billion of assets for a few dollars, as well as tax breaks and subsidies of more than $100 million. Records show that the McMillin firm donated heavily to local politicians.
In 1972, the city had voted a 30-foot height limit on coastal buildings. That cramped McMillin's style. So the city attorney's office came up with an -- er, uh -- novel interpretation: The limitation did not apply to NTC because the land was in federal hands when the citizenry voted in the limitation. Shockingly, both Superior Court and the Fourth Appellate District bought into this -- er, uh -- bizarre argument.
 The most infamous signal-sending case was the Stallings-Moores scandal. Padres majority owner John Moores showered gifts on former councilmember Valerie Stallings. He stood to gain a city-subsidized ballpark as well as one-tenth of downtown at lowball prices.
 He permitted her to get on the "friends and family" list of a hot stock Moores controlled, Neon Systems, as Matt Potter first revealed in the Reader. The initial reaction of City Attorney Casey Gwinn was that the gift was not a problem because Neon didn't do business with the city. "Instead of a watchdog or an attack dog, he was a lap dog," says attorney Michael Aguirre of Gwinn. Aguirre, an excellent attack dog, is running for the post.
Eventually, the Moores gifts were investigated by federal authorities. But Stallings got a wrist slap under state law, and Moores was not charged. Because the FBI did the investigation, the records were sealed. If it had been a state investigation, they could have been opened.
 The authorities never did state the value of many of the gifts bestowed on Stallings by Moores. Former councilmember Bruce Henderson asked Superior Court to make it a condition of probation that she disclose the value of those gifts. The court nixed the idea.
 In announcing the dubious deal, then U.S. Attorney Gregory Vega said that there was nothing wrong with giving money to a politician -- ignoring the big monetary gains Moores would make, partly through Stallings's votes. After he left office, Vega was named to the purported Ethics Commission.
 Shapiro won a lawsuit charging the city council with illegally holding 12 Padres-related closed sessions. After Shapiro also won at the appellate level, the city attorney's office decreed that it would from then on take notes at closed sessions, instead of the city clerk, who had done it for years.
 Viewing the foul-smelling activities through the years, Henderson sums it up: "Slime pays."
If U.S. Attorney Lam succeeds in the investigation of possible strip-club bribes -- as well as in her office's probe of Peregrine Systems -- the malefactors may find life, as Cole Porter intoned, "Too Darn Hot."

City's current crisis lacks intimacy of history
LOGAN JENKINS, Union Tribune, January 17, 2005
If there's a word for the tendency to inflate our calamities into the absolute worst of all time, I'd like to know it because I sure practice it enough.
It's a form of tribal egotism, I suppose, enabled by ignorance.
In a December column, I began with one of those portentous statements that sound like something hunchbacked Richard III would declare during the deep winter of his discontent:
"This could be the lowest point in San Diego's governmental history," I intoned, referring to the bungled mayoral election, the pension underfunding, the criminal probes and indictments. In short, the train wreck at City Hall.
In one swipe, I dismissed 150 years of fraud, corruption and strife as unworthy of fair comparison.
All I offered as a weak competitor was the J. David Dominelli scandal of the 1980s.
"But," I wrote, "that Ponzi scheme was a mild tropical storm in comparison with the sea of troubles flooding the city now."
An editor who grew up in Old Town wrote to gently remind that history is a very long spell.
He directed me to two 19th-century episodes that strike him as more momentous than our present-day imbroglio.
The first is encapsulated in a local history by Richard F. Pourade:
"The new city, which had been lavish in salaries for its officials, soon went bankrupt and issued scrip in an attempt to meet its current bills. The Legislature revoked the city charter, and in 1852 a Board of Trustees was organized to administer public affairs. Pueblo lots were ordered sold off to raise money. One of the lots contained a 'fine brick building' which was identified as the courthouse."
The second candidate for all-time nadir is a barn-burner, as chronicled by another local historian, William E. Smythe:
In 1870, Old Town was in a frenzy over the prospect of the county – as well as the city – seat getting moved to what was called "Horton's Addition," today's downtown.
After county supervisors ordered all official records sent to the "new" city, a judge loyal to Old Town ordered the sheriff to protect the files with force, if necessary. A posse was formed.
The San Diego Union, headquartered in Old Town, reported a de facto secession in the stirring purple prose characteristic of the times: "Lt. Gen. Bush, in command of the artillery, threw up earthworks in front of the jail and placed the field piece in position, . . . and now the immortal Bush, seated astride of the plaza cannon, his soul glowing with heroic emotion, exclaims: 'This rock shall fly from its firm base as soon as I.' "
The history lesson is clear: Until bankruptcy is declared and its charter revoked – or barricades are manned by rebel forces – San Diego must be somewhat modest about the current mess it is in.
"I think it probably would be good for some of the talk radio types and others who describe the city's current problems as unprecedentedly embarrassing, etc., to bone up on local history," the editor concluded.
Still, there's something quaint and other-worldly about the historic meltdowns the editor cited.
It's one thing for a sparsely populated frontier town on the Pacific Ocean to go broke or threaten secession, but it's quite another for a modern metropolis, which extends far into North County and South Bay, to stare at the black hole of insolvency and fraud.
In the pioneer era, government operated closer to the bone, it seems. Criminals were tried and hung in short order. Communications were slower, but decisions came faster.
Today, the snail's pace of criminal probes and hearings and appeals tends to narcotize the reading public. Citizens sense the city is in deep trouble, but it's like they're watching a bad collective dream that refuses to get on with it. By necessity, the prose to report these slo-mo events is often technical – beige, not purple.
Maybe this explains why a firebrand like Mike Aguirre was elected city attorney. Citizens yearn for dramatic resolution, if not right now at least soon. Aguirre promised to make waves and so far he's made good, creating a Banzai Pipeline at City Hall. Out of open strife may come clarity.
Today, I'll grant that the crisis in San Diego may not wind up being the worst thing that has ever happened in the city's governmental life.
Nevertheless, it is without a doubt the most complicated thing that has ever gone terribly wrong. The tentacles of this metastasizing scandal defy easy summary, no matter what color the prose.
Time was, we could just declare bankruptcy or threaten to fire some cannons, read about in the newspaper, and hurry on with history.
Would it were so simple today.

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