Administration January 2, 2007

SD's Aguirre Estimates Private Legal Advice Costs at $1.6M

January 2, 2007 (PLANSPONSOR.com) - In the two years since Michael Aguirre took office as San Diego's attorney, he has racked up $1.6 million in private legal expenses stemming from battles over the city's beleaguered pension system.

Reported by

Adrien Martin

The spending on private legal services by the city adds to the legal and investigative costs related to San Diego’s retirement system problems and is split among four firms, according to the San Diego Union-Tribune.

Aguirre filed the report for the private adviser expenses after the Union-Tribune filed a California Public Records Act request.

The legal expenses for the city overall have built up to $6.4 million for independent attorneys advising council members and other city and pension officials entangled in investigations and lawsuits, and nearly $30 million for three separate private inquiries into what went wrong.

The initial expense records disclosed by Aguirre’s office did not include the money owed to outside attorneys handling the police union’s federal suit against the city and talks with federal regulators leading up to San Diego’s November SEC settlement, according to the Union-Tribune. But on Friday, Aguirre’s office said that the city authorized $1.7 million for the federal police case and calculated a $304,000 bill from the SEC attorney, John Hartigan.

That amount is expected to climb as other lawsuits play out, including one that accuses five pension officials of neglecting San Diego pensioners by approving a proposal to inflate their coffers (See Five Indicted in San Diego City Pension Case ).

Aguirre settled one suit in November for $4.5 million against Callan Associates, which advised the pension system, over allegations that the firm recommended the city hire money managers that had paid Callan (See Callan Settles $4.5M Suit over Pay to Play Conflict Charges ). However, two private attorneys working on the case will each be paid $750,000 from the settlement money.

At a recent news conference, Aguirre said that he planned to file at least four more lawsuits, according to the newspaper, including one that attempts to regain some of the money that taxpayers have paid in legal fees. Specifically, Aguirre said he wants to stanch payment to lawyers representing the officials before the Securities and Exchange Commission (SEC) by January 31, in exchange for representation of those individuals by the City Attorney’s Office.