editorial
The Kroll report: You do the math
Published Thursday, 17-Aug-2006 in issue 973
Journalists aren’t known for being good at math. Why do you think most of us gravitated toward the humanities and languages? We may not excel at advanced linear equations, but that doesn’t mean we can’t recognize when things don’t add up.
Take the $20.3 million report released last week by Kroll Inc., the New York-based risk-management firm hired by the City Council to investigate allegations of wrongdoing at City Hall. The report details how city officials, including past and present council members, knowingly broke the law, scammed homeowners into paying more than their fair share in sewage treatment costs in favor of big business, and debilitated the pension system through years of “reckless” and “wrongful mismanagement.”
Here’s where one-plus-one doesn’t equal two: Despite these findings, Kroll concludes that Councilmembers Toni Atkins, Donna Frye, Jim Madaffer, Brian Maienschein and Scott Peters were only acting negligently, and no elected official committed any intentional wrongdoing.
OK, maybe instead of a mathematician we need the help of an attorney.
Enter City Attorney Mike Aguirre.
Calling the Kroll report essentially a $20 million political payoff, Aguirre raked Kroll representatives over the coals during last Tuesday’s City Council meeting, faulting the report for clearing council members of violating federal securities laws and recommending payment of the illegal pension benefits.
Aguirre raises an important question: How did the investigation’s estimated cost of $800,000 balloon into an astonishing $20.3 million? That would be like Atkins, or any of the other council members, expecting to pay $800 for her own personal taxes but instead being charged a whopping $20,000. Think she’d have a problem with that? Yeah, and so do we.
Given Kroll was hired by the same body it was investigating – namely, the city – much is left to the imagination. And considering the council’s well-documented capacity for corruption, Aguirre’s charges must be countered with explanations. Or is it up to us to do the math?
The Securities and Exchange Commission will ultimately decide if the acts of these elected city officials were committed with willful intent. Which leads us to the question: What does the Kroll report mean for our elected officials and, more specifically, our community’s own Councilmember Toni Atkins?
Atkins, Frye, Madaffer, Maienschein and Peters were all found culpable for misleading investors and approving the pension scheme. Frye did, however, cast the one dissenting vote to increase retirement benefits in November 2002.
“In 1996 and again in 2002, the City Council voted to approve pension funding arrangements that violated the California Constitution, the City Charter, and the Municipal Code,” the report states. “Despite the plain language of the controlling statutes, and their obligations as elected officials to uphold the laws of the City and State, there is no evidence the Council members ever bothered to inquire whether these agreements were permissible under California law.”
How would you like to have that said about your performance on your next work evaluation?
Atkins, Madaffer, Maienschein and Peters are deeply implicated in the sewer scandal.
“When our most highly celebrated community representative has been found to have violated a string of laws, and has been accused by the city attorney of attempting to conceal these mistakes from the public, of course we’re going to have questions.”
According to the report: “…the evidence demonstrates that city officials deliberately failed to obey legal requirements as to the allocation of costs with regard to the city’s sewage treatment with the effect that San Diego homeowners were improperly overcharged on their monthly sewage bills with the excess being unlawfully used to subsidize the sewage costs of large industrial users.
“The evidence demonstrates not mere negligence,” the report continues, “but deliberate disregard for the law, disregard for fiduciary responsibility, and disrespect for the financial welfare of the City’s residents over an extended period of time.”
Another astonishing testimony to have in your permanent employee file.
On Jan. 29, 2002, Murphy and Councilmembers George Stevens, Byron Wear, Madaffer, Maienschein, Atkins and Frye were told they were in violation of the Clean Water Act and, as a result, the city had violated its covenants in connection with hundreds of millions of dollars in grants and loans. Nonetheless, the Kroll report states then-Mayor Murphy and the City Council made the decision to stay in violation and force San Diego residents to continue subsidizing the rates of its businesses. Madaffer is quoted in the report as commenting, “Let ’em sue us.” Only Frye and Stevens objected.
Hard to believe, huh?
To this, the report concludes: “The Mayor and City Council deliberately concealed from its citizens both the City’s knowing violation of law and just as troubling, the fact that the violation resulted in San Diego’s residents largely footing the sewage bill for the industrial class. … These facts demonstrate that Mayor Murphy and Council members, Atkins, Maienschein, Madaffer, [Ralph] Inzunza, and Peters knowingly and improperly caused the City to violate federal and state law, and the conditions of its grants and loans.”
Say it isn’t so, Toni!
That brings us back to Kroll’s $20 million conclusion: negligence, not willful intent.
Atkins is quoted in a recent San Diego Union-Tribune article as accepting full responsibility for not applying due diligence in her decisions.
“It was never my intention not to act in the best interests of the city,” she said.
So is this a case of simple negligence?
We’ve always regarded Atkins as one of the most honest and trustworthy local elected officials in office. When our most highly celebrated community representative has been found to have violated a string of laws, and has been accused by the city attorney of attempting to conceal these mistakes from the public, of course we’re going to have questions.
Perhaps Atkins’ own attorneys, to whom she has paid a half million dollars of tax payers’ money, would advise against such a suggestion, but we urge Atkins to hold a question-and-answer session to provide the community an opportunity to ask it’s questions and get honest, unscripted answers. The Gay & Lesbian Times will be seated in the front row, waiting to ask our own questions.
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