Paying City Officials’ Legal Fees Constitutes Double-Whammy against Taxpayers
Cost of Financial Mismanagement to Taxpayers Mounts

SAN DIEGO – Today the San Diego City Council will vote to authorize the use of $150,000 to pay legal bills to defend city officials in ongoing investigations being conducted by the Securities and Exchange Commission (SEC) and the U.S. Attorney into possible criminal wrongdoing in connection with city finances and pension fund deficit.

In response to this docket item, Performance Institute president and San Diego Citizens’ Budget Project director, Carl DeMaio, released the following statement:

“City officials—both elected and staff—have made numerous financial management mistakes that have cost taxpayers millions of dollars, created a $2.3 billion pension fund debt, opened a huge deficit in the city’s annual budget, and destroyed the city’s credit rating. Now, those same individuals who created this mess are asking taxpayers to foot the bill for defending those same mistakes. This adds insult to injury.

Today’s estimated cost for legal counsel is only the beginning. There is no doubt that the costs of providing legal defense counsel to these individuals will only skyrocket from here.

What’s more troubling is the fact that the City is offering to pay legal expenses of potential witnesses in a federal investigation thus raising concern that these individuals might be beholden to validating the city’s version of events in this sordid mess.

The only good news is these expenses will now be in the plane view of the public.”

In recent months taxpayers have seen the City of San Diego go from bad to worse as news of gross mismanagement continually emerges. The consequences of this can be seen in the City’s inability to produce a financial statement for 2003, credit rating downgrades, and now news that the SEC is escalating its activities in its ongoing securities-fraud investigation of City finances and the troubled pension system.
Based here in San Diego, the Institute is a national government reform think tank that promotes the principles of performance, transparency, competition and accountability in government. Additional information on the San Diego citizens’ Budget Project can be found at www.sandiegobudget.org.

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