Taxpayers To Pay Legal Bills For Subpoenaed City Employees

Council Approves Plan To Release Information For Ongoing Investigations

The San Diego City Council approved Tuesday plans to release more information to federal agencies in ongoing criminal and civil investigations.It also voted to have taxpayers pay the legal bills of employees recently subpoenaed in one of those investigations.

The public got a rare look at how the council deals with touchy legal and financial matters. Until recently, this type of meeting would have been held behind closed doors. The open doors gave the public a closer look at the mounting tensions between council members and the new city attorney, Mike Aguirre.

The meeting went as expected at first. Council members unanimously passed a resolution to release interviews conducted by the law firm of Vinson & Elkins to its auditor KPMG, as long as they pertain to bond disclosures.

Critics said the council didn't go far enough.

Carl Demaio, the president of the Performance Institute, said, "If you don't waive your attorney-client privilege for KPMG, then we don't really have open government and today's vote should be seen as such."

KPMG said it needs the records to finish its audit of the city -- a severely past-due audit that suspended the city's ability to sell public bonds to pay for things like sewer and water upgrades.

The council also passed Tuesday a measure to pay up to $150,000 in legal bills for seven current and one former employee who were subpoenaed by the Securities and Exchange Commission.

But not before a heated debate between Aguirre and Michael Zucchet, San Diego's deputy mayor.

"What former and current city officials are you referring to that the city has been paying for their lawyers in respect to a criminal investigation?" Zucchet asked.

"I will remind you, Mr. Zucchet, that you are very closely associated with an individual who may very well be the subject of the criminal investigation," Aguirre answered.

Zucchet is a former lobbyist for the San Diego City Firefighter's Union and worked with current union President Ron Saatoff, who is a San Diego City Employees Retirement System board member at the center of two federal investigations.

"I think Mr. Zucchet was using his position as a City Council person to pursue an agenda with people who are caught up in this investigation," Aguirre said.

The decisions by the retirement board to support ongoing under-funding of the pension fund and increasing retiree benefits has been blamed for the city's $2 billion deficit. To date, the city has paid close to $3 million in legal fees in the criminal and civil investigations.

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