SD City Attorney Accuses Officials of Pension Wrongdoing

February 10, 2005 ( - In another revelation in the San Diego Pension fiasco, City Attorney Michael Aguirre has released a report accusing the mayor and city council of violating federal securities laws by hiding city finance information.

In a 91-page report, Aguirre accused Mayor Dick Murphy and City Council of engaging in wrongful conduct by failing to ensure the bond documents reported the deteriorating state of the city’s pension plan, the Associated Press reported.   He also accused them of giving special deals to union presidents in exchange for being allowed to continue underfunding the plan.

The report seemed to anger Murphy. “Mr. Aguirre’s allegations are untrue, irresponsible and defamatory,” Murphy told the AP. “Mr. Aguirre is not the SEC. This is only Mr. Aguirre’s opinion.”

Murphy was referring to the Securities and Exchange Commissions ongoing investigation into the city’s finances, and, more specifically, into whether the city hid information about its pension plan when it sold over $1 billion in bonds to investors (See SEC Demands San Diego Pension Testimony, Documents ).

Aguirre, who ran as an outsider, was elected to his office on November 2 and immediately launched an investigation into the city’s pension fund, which is running a $1.4 billion deficit. The city’s retirement board recently sued Aguirre to keep him from controlling the pension’s legal affairs and to make him give back certain key documents in relation to his investigation (See San Diego Pension Mess Boils Over – Again ).