Posted on 02/22/2005 9:19:21 PM PST by NormsRevenge
SAN DIEGO – San Diego City Attorney Michael Aguirre called Tuesday on Mayor Dick Murphy and members of the City Council to conditionally accept findings of his reports on the city's debt-ridden pension plan.
The request was the first of eight recommendations Aguirre described as "an integrated plan" and "the things we need to get us out" of current problems.
The second of two reports on the pension deficit – released by Aguirre on Feb. 9 – alleged "substantial evidence" that Murphy and the council committed civil violations of federal securities laws.
Murphy has denied the allegations in the report, saying Aguirre was "acting in a serious conflict of interest" and "greatly damaging the city he supposedly represents."
At an evening news conference at City Hall, Murphy said he and the council would "absolutely not" accept Aguirre's conclusions.
"His reports are not true, they're defamatory," Murphy said.
Murphy had previously denied the allegations in the report.
"I think the findings (in the report) are irrefutable," Aguirre said Tuesday, adding that no one who reacted to the 117-page report pointed out factual errors.
"We're not asking (the mayor and council) to personally indicate whether they did anything wrong," Aguirre said.
But backing the report's findings would lead to recommendation number two, which is to authorize Aguirre to negotiate a compromise with the Securities and Exchange Commission, which is investigating claims made in city bond issues, he said.
The mayor planned an evening news conference to respond to Aguirre's recommendations.
SEC investigators are studying whether federal securities laws were violated by the city not fully disclosing to investors the scope of the $1.3 billion deficit in the retirement system.
Aguirre said he has spoken with SEC investigators and developed a good relationship with them. He would not release details of those talks.
A settlement with the SEC would allow the city to re-enter financial markets and put legal questions regarding bond sales behind it, Aguirre said.
The city has not issued a public bond in the last 17 months. Standard & Poor's suspended San Diego's bond rating last September.
Aguirre's other recommendations are for the mayor and council to:
Authorize the city attorney to take all legal steps to rescind what he called unlawful pension benefits;
Authorize the city attorney to take the steps necessary to place the city's retirement system in receivership. Aguirre said he would act on this recommendation on his own, but wanted the support of the mayor and council;
Adopt a resolution calling on the pension board to waive attorney-client privileges and closed session confidentiality privileges;
Adopt a resolution to have the pension board comply with an order reinstating the city attorney as its legal counsel. The board was allowed to hire its own lawyer in 1997, but that authorization was revoked in December. Aguirre said the board has refused to comply;
Allow the city attorney to draft an ordinance to create a committee to audit the City Council "to avoid a recurrence of the underlying financial problems" with the city; and
Have the city attorney create an ordinance to form a pension regulatory commission and establish pension regulatory reforms.
The mayor and members of the council have spent too much time "protecting themselves" and not enough time solving the pension crisis, Aguirre charged.
"This is a solvable problem," Aguirre said. "The only missing piece is leadership from the mayor and city council. They have to step up to the plate."
Murphy, however, said the city had already developed a "clear" plan to deal with the pension crisis with the city attorney's participation.
Under the plan, San Diego already had a lawyer representing the city before the SEC – someone who was a former attorney with the agency, Murphy said. Other Aguirre ideas would tie up the city in court with lawsuits, the mayor said.
"Mr. Aguirre's continued grandstanding is obstructing, not helping, to solve the city's financial situation," Murphy said.
Murphy sounds like a disgusting person.
The best way for the city to get out of this is to reneg on the plan to provide pensions for government workers. This is done all the time in the private sector. Why should those parasites get special treatment? Why should their pensions be paid by taxpayers who have no pensions?
Apparently once the pensions get in, they can't be changed for existing workers, without breach of contract. They I guess are written that way to tie the hands of the voters for ever more. It is disgusing. It is done because it is off the books, and it is a nice way for local hacks to feather their nests. Defined benefit pensions are evil in the public sector. Period.
The public employee unions would like to have you believe that, but that isn't the way "vesting" works. The pension formula can't be changed for service already covered (i.e., that benefit is legally "earned"), but it can be changed for future service (i.e., those benefits have not been earned so the employee has no "vested" right to them).
Regrettably, the politicians themselves (left and right) are under a powerful disincentive to set this matter straight since they enjoy retirement benefits that are tantamount to outright thievery....
Murphy is not a bad guy. He is just someone who should have never been Mayor. He wants everyone to like him. Very dangerous in politics.
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