A Goliath among corrupt cities

A small group of developers and attorneys with City Hall connections glommed on to a program for poor neighborhoods and used it to build luxury hotels and fancy shopping centers in the richest parts of town, draining $90 million per year from the city's budget and racking up $5 billion in debt. Cash poor, the city's bridges, sidewalks and sewers were literally crumbling...

Did you think the above paragraph was talking about our San Diego Development Corporations?

No, it's about Kansas City. Here's more:


The oddest couple in politics
My brief, unhappy career working for the mayor of Kansas City and his eccentric wife -- the unofficial co-mayor
By Joe Miller

Kansas City is a Goliath among corrupt cities. From its earliest days as a muddy sin stop on the banks of the Missouri River, through the years when "Boss Tom" Pendergast ran the town with a greedy fist, to the 1990s when a near quorum of its City Council was indicted on criminal charges, K.C. has been at the forefront of graft.

For the last decade, the city has been caught up in a pork fest -- all of it perfectly legal -- the likes of which are unequaled in any American city...

Lifeguards leave MEA for Teamsters

Lifeguards Vote to Leave MEA
Voice of San Diego

The city of San Diego lifeguards voted today to leave the Municipal Employees Association and join The International Brotherhood of Teamsters.

The vote completes a more than five-month long push to remove the lone public safety agency from the mostly white-collar MEA.

Lifeguards wanted more say in their affairs, said Ed Harris, a lifeguard sergeant who pushed for the change.

"We want to sit down at the table," Harris said. "Under the Teamsters model, they don't go to the city without the lifeguards being there."

Harris is also a plaintiff in a lawsuit against former MEA head Judie Italiano, who the MEA refered for investigation to the district attorney for personal use of union credit cards. In his suit, Harris contends Italiano misused union funds.

"Both the lawsuit and the move to leave MEA were for a desire to get better representation," Harris said.

The vote splits lifeguards into separate supervisor and rank-and-file bargaining units.

Scott Chadwick, the city's labor relations manager, acknowledged today's results and said he planned to brief Mayor Jerry Sanders within the next couple days.

The contract MEA negotiated on behalf of the lifeguards could continue for up to two years, Chadwick said, but the city now is obliged to negotiate with lifeguards again. Chadwick said it was "too early to tell" if there would be changes.

"We look forward to working with the Teamsters and representatives of the lifeguards," Chadwick said.

The lifeguards' supervisory unit voted 14-5 in favor of joining the Teamsters, and the rank and file voted 37-28.

-- LIAM DILLON

Thursday, August 20, 2009

San Diego Ethics Commission will hold hearing on CCDC's Nancy Graham

No wonder Mayor Jerry Sanders refuses to reappoint Gil Cabrera to the Ethics Commission. Cabrera is actually investigating!


Case of CCDC's Graham set for ethics hearing
Commission also fines lobbyists
By Craig Gustafson
Union-Tribune Staff Writer
August 13, 2009

Nancy Graham:
Position: Former CCDC president
Tenure: Hired at CCDC in December 2005, resigned in July 2008
Salary: Was paid $248,000
Background: Lawyer; former partner in N-K Ventures LLC, which was involved in the development of urban in-fill projects; former mayor of West Palm Beach, Fla. Faced conflict-of-interest charges due to her development ties.

The San Diego Ethics Commission on Thursday called for a special hearing against former Centre City Development Corp. president Nancy Graham over conflict-of-interest issues.

The commission generally reaches settlements with its investigation targets before reaching the hearing stage that Graham's case has now reached.

The investigation began a year ago, shortly after Graham resigned from the nonprofit city agency amid criticism over undisclosed business ties to developers Related Cos. and Lennar Corp. Both had business before the agency.

The probe focuses on her relationship with Lennar, which was one of several developers trying to build a 1,929-room Marriott hotel at Ballpark Village, just east of Petco Park. Lennar eventually pulled out of the project, but not before Graham became involved.

At issue is the Florida development business Graham owned with her former husband. Their company partnered with Related and Lennar on a Florida condo project, which netted the couple's company more than $7 million before expenses and taxes. Graham never reported income from the venture on her San Diego economic-interest forms.

Graham's lawyer, former District Attorney Paul Pfingst, said the dispute with the Ethics Commission is whether Graham should have participated in decisions about the hotel project when Lennar was still involved in it.

“We believe her connection to Lennar is very, very tenuous,” he said. “No one has ever claimed that Nancy Graham has profited in any way from the actions that she took.”

The commission does not discuss or release details of its investigations until they are completed.

A probable-cause hearing – which has only occurred twice in the panel's eight-year history – has been set Nov. 6 to examine the evidence in Graham's case. It is closed to the public unless Graham asks for it to be opened. After reviewing the evidence, the commission would decide whether to dismiss the case or move forward with a second hearing, after which a fine could be levied.

Graham pleaded no contest earlier this year to a separate misdemeanor charge of failing to disclose financial interests on a form that city officials fill out annually. That had to do with her connection to the Florida arm of Related, which won a $409 million urban-renewal project from CCDC in 2007.

In other action, the commission levied $5,200 in fines against 19 registered lobbyists who failed to disclose their activities in a timely fashion. New lobbying laws went into effect Jan. 1, 2008, and the fines show that some are struggling to adjust to broad disclosures of their activities and fundraising.

Among those fined were Ace Parking and Gerding Edlen, the Portland, Ore.-based firm heading up the proposal for a new City Hall complex. They received fines of $700 and $400, respectively.

Commissioner Gil Cabrera said those fined represent a fraction of the city's more than 500 registered lobbyists.

“Overall, though, I think that we should be happy with the number of disclosures that are coming out,” Cabrera said.

The panel also cited the International Association of Firefighters for failing to timely report $25,000 in radio advertising it paid for on behalf of Jan Goldsmith in his successful bid to unseat City Attorney Michael Aguirre. The group was required to report the expense within 24 hours because it was so close to the Nov. 4 election, but didn't disclose it until a week later. The fine was $1,500.

The scapegoats for the San Diego pension fraud are still being prosecuted

UPDATE: All defendants except Ron Saathoff dismissed in January 2010 by California Supreme Court.



ORIGINAL POST:

These people are not angels, but they most certainly did not act alone in the billion dollar San Diego pension scheme.

So why are they alone in being prosecuted?

Because Bonnie Dumanis, our District Attorney, doesn't like to pick on the truly powerful.

Defendants:
Cathy Lexin, Ronald Lee Saathoff, John Anthony Torres, Mary Elizabeth Vattimo, Teresa Aja Webster, Sharon Kay Wilkinson

Charge: Conflict Of Interest - Specified Officials
Court No.: CD190930
Prosecutor: Stephen Robinson

Synopsis: Six former and current members of the San Diego City Employee Retirement System Board of Trustees are charged with felony conflict of interst following an 11-month investigation. The defendants are Ronald L. Saathoff, John A. Torres, Sharon K. Wilkinson, Cathy Lexin, Mary Vattimo and Terri A. Webster. Each has been charged with felony counts of Government Code 1090. On July 11, 2002 The SDCERS Board of Trustees voted to approve and accept an amended version of a City of San Diego proposal which deferred a percentage of City of San Diego employer contributions and avoided the City's obligation to make a balloon payment to SDCERS as negotiated under the terms of a prior City agreement. The amended proposal included a negotiated enhanced retirement benefits agreement between the City of San Diego and three of the City of San Diego Employee bargaining unions. These unions included the San Diego Fire Fighter's Local 145; Municipal Employees Association; and American Federation of State, County and Municipal Employees Local 127. Each of the trustees named in this criminal action voted in favor of this proposal and personally benefited as a result of their involvement with the amended proposal.
Custody Status: Warrant issued

Next Court Date: Further Proceedings, Oct 23 2009 9:00AM, Department 26, San Diego Superior Court, Central Division, County Courthouse

New Jersey:

Mayors, rabbis arrested in NJ corruption probe
Jul 23, 2009
Reuters
By Edith Honan

NEWARK (Reuters) - Dozens of New Jersey politicians, officials and prominent rabbis were arrested on Thursday in a sweeping federal probe that uncovered political corruption, human organ sales and money laundering from New York to Israel, officials said.

The 10-year investigation, dubbed "Operation Bid Rig," exposed influence-peddling and bribe-taking among a network of public officials and a separate multimillion dollar money-laundering ring that funneled funds through charities operated by local rabbis, said the U.S. Attorney's office in Newark, New Jersey.

The cast of the 44 arrested featured Hoboken, New Jersey, Mayor Peter Cammarano, who took office three weeks ago in the industrial city visible across the Hudson River from New York.

Others accused were mayors of nearby Secaucus and Ridgefield, state Assemblymen, a deputy mayor, city council members, housing, planning and zoning officials, building inspectors and political candidates.

"New Jersey's corruption problem is one of the worst, if not the worst, in the nation," said Ed Kahrer, assistant special agent in charge of the FBI's white collar crime and public corruption program in New Jersey, who has worked on the investigation since it began in July 1999.

"It has become ingrained in New Jersey's political culture," he said, calling corruption "a cancer."

Central to the investigation was an informant who was charged with bank fraud in 2006 and posed undercover as a real estate developer and owner of a tile business who paid off officials to win project approval and public contracts in northern New Jersey, according to documents in the case.

The public officials stand accused of taking bribes for pledging their help getting permits and projects prioritized and approved or steering contracts to the witness...

"The politicians willingly put themselves up for sale," said Acting U.S. Attorney Ralph Marra. "The victims are the average citizens and the honest business people in this state. They don't have a chance in this culture of corruption."

The public corruption uncovered by the informant led him to the separate money-laundering network by rabbis who operated between Brooklyn, Deal, New Jersey, and Israel, authorities said. They laundered some $3 million for the undercover witness between June 2007 and July 2009, authorities said.

"These complaints paint a disgraceful picture of religious leaders heading money laundering crews acting as crime bosses," Marra said. "They used purported charities, entities supposed set up to do good works as vehicles for laundering millions of dollars in illicit funds."

HUMAN KIDNEY SALES

Rabbis accused of money-laundering were Saul Kassin, chief rabbi of a large Syrian Jewish synagogue in Brooklyn; Eliahu Ben Haim, principal rabbi of a synagogue in Deal; Edmund Nahum, principal rabbi of another synagogue in Deal; and Mordchai Fish, a rabbi at a synagogue in Brooklyn.

The probe also uncovered Levy Izhak Rosenbaum of Brooklyn, who is accused of conspiring to broker the sale of a human kidney for a transplant. According to the complaint, Rosenbaum said he had been brokering sale of kidneys for 10 years.

"His business was to entice vulnerable people to give up a kidney for $10,000 which he would turn around and sell for $160,000," said Marra.

Several of the public officials were accused of taking bribes of just $10,000, authorities said. Cammarano, at 31 the youngest ever mayor of Hoboken, was charged with taking $25,000 in bribes, including $10,000 last Thursday...

Taxpayers pay to break-up Democratic fundraiser; compare to Cheryl Cox fundraiser

Some people just can't stand for anyone to disagree with them. A neighbor was apparently enraged by a Democratic fundraiser in Cardiff, and the Sheriff's department was ready and willing to add dogs and a helicopter to the effort to shut down the party. I suspect the complainer didn't mind the noise of the helicopter since the complaint was not motivated by noise, but rather by politics. It seems the angry neighbor was making plenty of noise himself before the police came, shouting obscenities to party-goers.

Compare this story to the story of a fundraiser for Republican Chula Vista Mayor Cheryl Cox, in which a visitor was arrested, not the hosts. Clearly, fundraisers go differently in San Diego county depending on whether or not you're a Republican like District Attorney Bonnie Dumanis and Sheriffs Bill Kolender/Bill Gore.

--- BEGIN POLICE REPORT ---

On 6/27/09, at about 2112 hours, Deputy ***** and *****, Clinician ***** responded to 1366 Rubenstein Avenue, Cardiff, Calif, regarding a Loud Democratic Rally with Loud Speakers.

The reporting party's residence is located on Summit Avenue just west of 1366 Rubenstein Avenue. The reporting party told dispatchers he was willing to sign and wanted deputy contact. It was later learned that the rally was a fundraiser for Francine Busby who is running for Congress.

Upon arriving at 1366 Rubenstein Avenue, Deputy ***** and Clinician ***** walked down a long driveway and found an open front door. They noticed that some type of rally or party was taking place. Deputy ***** asked someone outside where the homeowner could be found. The person told Deputy ***** they were somewhere inside the house.

Deputy ***** and Clinician ***** walked inside and asked another person where the homeowner was. That person pointed at a female later identified as Shari Lynn Barman. Deputy ***** approached Barman and attempted to inform her that the rally was causing a disturbance for one of her neighbors. Deputy ***** noticed Barman wearing a name tag with the first name of Shari written on it. Deputy ***** asked Shari what her last name and date of birth was, so he could document the contact with her and complete his first responder notification.

She refused to tell Deputy ***** her last name or D.O.B. and walked away from him several times. Deputy ***** followed her and continued to ask for her last name and D.O.B. and she refused his request. As Barman walked away from Deputy ***** again he grabbed her wrist to prevent her from walking away. She resisted and tried to break free of his grasp. Deputy ***** attempted to handcuff Barman as she screamed to the crowd of about 25-40 people. The crowd surrounded Deputy ***** and began pulling Barman away from him.

The crowd was successful in taking Barman away from Deputy ***** and they continued surrounding him. Clinician ***** was pushed out of the way by the crowd and kicked on the back of her leg by an unknown suspect. Deputy ***** took out his pepper spray and used it on the crowd which effectively stopped them from advancing on him. Additionally, it gave him an opportunity to go into the crowd and take Barman back into custody. He attempted to handcuff Barman as she struck him several times on his arms and upper torso with her hands.

Another female later identified as Pamela Ann Morgan began pulling at Deputy *****'s arms trying to prevent him from arresting Barman. Deputy ***** arrived and took Morgan into custody which allowed Deputy ***** time to handcuff and secure Barman. Barman was arrested for 243 (b) P.C.-Battery on a Police Officer and 148 (a) P.C.-Obstructing a Police Officer and was later booked into the Vista Jail. Morgan was arrested for 148 (a) P.C., issued a citation and released from the Encinitas Station. Deputy ***** sustained several scratches and minor swelling on both of his arms.

Source of information: Sgt. Jack Reynolds, Encinitas Patrol Station

--- END POLICE REPORT ---




Here's another story about San Diego County Sheriff's department:

Sheriff's Deputy Hired Despite Failed Psych Evals
By KELLY THORNTON
July 10, 2009

Lowell Bruce, a deputy sheriff who fatally shot his wife in their Alpine home in 2006, twice failed the county's psychological evaluations and was rejected for employment by eight other law enforcement agencies, but was ultimately hired by the San Diego County Sheriff's Department anyway.

According to 1993 employment applications, rejection letters from the county of San Diego and other documents contained in a 2007 wrongful death lawsuit filed by his wife's parents, Bruce was told his history of violence was the reason he failed the exams and would not be hired.

Nonetheless, in 1998, five years after failing the evaluations, Bruce became a deputy assigned to the Las Colinas Women's Detention Facility in Santee.

"The county clearly understood and appreciated that he was unfit for duty and prone to violence, but hired him anyway," the 2007 lawsuit said. "Not only did the county recklessly hire Bruce, but thereafter provided him with a Glock handgun, and allowed him to take it home with him ... Bruce was permitted to take that weapon home, and as a result, at least six lives were forever altered."

Those lives included Bruce and his wife, Kristin Marie Maxwell-Bruce, 38, their two young boys, and her parents, Jim and Kay Maxwell.

However, during pretrial motions in June 2008, U.S. District Judge John Houston dismissed the plaintiffs' claim that the county was negligent in hiring Bruce as a deputy. Houston agreed with the county that Bruce "already had psychological issues before the county hired him and that he would have had the same issues whether or not the county hired him."

The psychological evaluations showed a history of physical violence and that Bruce "would tend to resort to violence as a way of resolving interpersonal differences with others," the lawsuit said.

On the second evaluation, which Bruce instigated as part of an appeal, the private psychologist who contracted with the county to perform the evaluation informed him in a rejection letter: "My recommendation, in part, was made due to your history of physical altercations with others and test results which suggest that you lack more creative ways of resolving differences with others. In a corrections setting this behavior and the lack of other means to resolve interpersonal problems, would not be successful."

He was then rejected by the San Diego Police Department, the San Diego Harbor Police, Chula Vista Police Department, the California Highway Patrol, the Los Angeles Police Department and three public safety agencies in Washington State, according to the county application.

The documents were found by friends of the Maxwells who assisted them in sifting through Bruce's belongings in the weeks after the shooting.

Despite having the knowledge that Bruce failed the psychological test twice, and being rejected by at least eight other law enforcement agencies, he was still ultimately hired by the Sheriff's Department, and went on to fatally shoot his wife, the plaintiff's complaint said.

The lawsuit alleges the Sheriff's Department's of "careless and reckless hiring policies or practices led to the issuing of a gun to Bruce, which then led to the death of Kristin."...




Kristin Maxwell's Lonely Death
Voice of San Diego
By KELLY THORNTON
July 10, 2009

After San Diego County sheriff's Deputy Lowell "Sam" Bruce shot his wife in the face in front of their 4-year-old son, Kristin Marie Maxwell-Bruce was able to walk to the kitchen phone and dial 911.

As she waited for medical help on that December evening in 2006, Kristin was alert and talking -- but it was with some difficulty because the bullet had destroyed half her tongue and the left side of her jaw.

She told her mother she was worried about her teeth; her mother assured her they could be fixed. Upon arrival at the Alpine home, medics found that Kristin's vital signs -- pulse, body temperature, blood pressure and respiratory rate -- were within normal range.

But Kristin's family claims a shocking series of blunders and delays by Sheriff's investigators and medics resulted in a lonely and unnecessary death an hour later for the 38-year-old mother of two.

The evening was capped by a violent encounter between deputies and Kristin's distraught father -- a sequestered witness who was pepper-sprayed, clubbed and handcuffed when he tried to leave sheriff's custody to tell his wife that their only child was dead, according to the wrongful-death lawsuit filed in December 2007 by Kristin's parents, Jim and Kay Maxwell.

"During the last hour of Kristin's life, defendants refused to let her parents see her, refused to let them speak to her or comfort her, and refused to let Jim and Kay Maxwell see, speak to or comfort each other," the lawsuit said. The sheriff's officials "prevented Kristin from receiving proper medical treatment, falsely imprisoned Kristin and the Maxwells, and prevented the Maxwells from association with their daughter in the last hour of her life."

Meanwhile, the shooter, Lowell Bruce, a corrections deputy at Las Colinas Women's Detention Facility in Santee, was never handcuffed, and was permitted to make a phone call on another deputy's cell phone, the lawsuit contends.

Adding to the family's outrage were two discoveries soon after the shooting: Friends sifting through Lowell Bruce's belongings discovered documents indicating the deputy had twice failed psychological examinations when applying to work for the Sheriff's Department in 1993. But despite that initial rejection by the department, and at least eight other agencies, five years later the Sheriff's Department did ultimately hire and arm a man they'd deemed too violent for the job.

Also, at a debriefing about the incident attended by Sheriff's officials, one of the deputies got into a heated exchange with a sergeant, telling the sergeant he "fucked the crime scene up" because he "didn't want to let the ambulance leave."...

San Diego sheriff's department raids Francine Busby fundraiser

Okay, Bonnie Dumanis, this is getting to be a bit one-sided. You prosecuted a young man for trying to take a picture at Republican Cheryl Cox's fundraiser. Let's see how you handle a case of far greater abuse at a Democratic fundraiser. The very least that should be done is to make the caller (who was not a neighbor) pay for the cost of the helicopter and charge him with making a false police report.

Why were a canine unit and helicopter deemed necessary for this action? What on earth did the caller say, if anything, to make the sheriff's department pull out all the stops? Or was it the sheriff's department that overreacted?

Who Was Busby's Party Pooper?
Voice of San Diego
By WILL CARLESS
July 2, 2009

On June 26, at 9 p.m. someone called the San Diego Sheriff's Department and made what the department has described as a "noise complaint." The call resulted in several deputies, a K-9 unit and a helicopter being deployed to a private residence where a political fundraiser was being held for congressional candidate Francine Busby.

The evening ended in chaos, with the host of the fundraiser in jail accused of obstructing a peace officer and battery on a peace officer and several middle-aged guests alleging excessive force by a deputy who they claim shot pepper spray indiscriminately at a crowd of guests.

Of all the questions to surface since that evening, the identity of the mystery caller to the Sheriff's Department, and the nature of his or her complaint remain perhaps the most perplexing. Because the department won’t reveal any information about the caller and won't release any documents or recordings of the incident, the public has no way of knowing if the caller was a disgruntled neighbor, upset about noise from the party, or a political saboteur, intent on disrupting Busby's fundraiser.

For her part, Busby wants to know if the caller was the same person who hid in some bushes on a plot adjacent to the home where the fundraiser was held and heckled her while she made a speech to supporters. She has asked the Sheriff's Department to clear the air by releasing a recording of the phone complaint.

The Sheriff's Department issued a statement saying that it received a noise complaint from an individual regarding the fundraising event. But the department has refused to elaborate on the incident because it is currently under internal investigation.

Sanford Toyen, a Sheriff's Department legal advisor, said the records are exempt from disclosure under the California Public Records Act because they are records of a law enforcement investigation.

But public records law expert Terry Francke disagreed. Francke said while the department may keep the identity of the complainer secret, it is required to make public the basic facts of the complaint under the CPRA.

"Merely using a label like 'noise complaint' is insufficient," Francke said.

Kevin Keenan, executive director of the American Civil Liberties Union of San Diego and Imperial Counties, said the Sheriff's Department has to play a delicate balancing act between releasing information about what could be a malicious complaint and protecting the privacy of the individual who made the call.

But Keenan said the department could release certain information about the incident -- for example, whether the complaint was made by a neighbor or someone who did not live near the party and could not legitimately make the claim that they were disturbed by it.

"When there's a vacuum of information and a lot of legitimate concerns, it's usually the best policy to get the information out there," Keenan said.

According to the Sheriff's Department, a deputy based in Encinitas was called to the residence on Rubenstein Avenue in Cardiff after the department received the noise complaint at about 9 p.m. on July 26.

About an hour before the deputy showed up, Busby had made a brief speech on the back patio of the large house where the fundraiser was being held.

That speech prompted the mystery heckler to launch his reported tirade.

As Busby spoke to the crowd through a public address system, a man hidden behind trees and bushes on a neighboring lot started to shout obscenities and insults about her policies, said four people who attended the party. The profanity-laced invective went on for several minutes before one of Busby's supporters decided to shout back, Busby said.

"Somebody yelled back at him. Whoever he was, he was hidden in the bushes, we couldn't see him," Busby said.

There are three homes whose gardens back onto the yard where the fundraiser was being held. In interviews, the residents of all three of those homes said they had no idea who might have shouted at the group gathered for the fundraiser. All of the residents said they were Democrats and said they had not heard any noise from the party until the Sheriff's Department helicopter showed up...

Rick Wurts and Marco Gonzalez have memory problems; why did the city help Surf Diva and damage Menehune Surf School

A Battle Over Surf Camps at La Jolla Shores
By ADRIAN FLORIDO
June 22, 2009

The waves at La Jolla Shores are a beginning surfer's dream. They break far from shore, and the beach's gradual slope means that when they do, new surfers have plenty of time to ride the gentle shallow whitewater all the way to shore.

La Jolla Shores is a surf instructor's dream, too. The scenic strip of San Diego's coast and its oceanfront hotels and boutique shops draw tourists year-round, providing a renewing pool of potential clients.

Those factors make the four surf instruction permits that the city's Real Estate Assets Department issues there the most lucrative of the 13 citywide. Since 2005, when the city first required permits for commercial surf instruction on San Diego's beaches, two companies have shared the sands at La Jolla Shores.

But how the city has distributed those permits in the last four years is threatening to put one of those companies, Menehune Surf, out of business, said Darren Fulhorst, the company's owner. When his competitor, Surf Diva, was granted only two of the three permits it bid on in 2005, the city circumvented the formal bidding process to create a fifth permit at La Jolla Shores, which it granted to Surf Diva, and in the years since has been unwilling to account for how or why it did so.

That decision, Fulhorst said, set the precedent for the city's move to revoke one of his two permits and grant it to Surf Diva when the fifth permit was eliminated during the 2008 bidding process. Last year, Fulhorst's company was awarded only one permit to operate on La Jolla Shores, cutting his operating capacity by half. Surf Diva was awarded the other three.

Gary Jones, the real estate department's asset manager, the city's decision was based on scores given to each of the companies' proposals...

But Fulhorst said the decision to grant one of his permits to his competitor was spurred more by the department's need to formally grant Surf Diva the third site it had created to accommodate the company's demands outside of the formal bidding process in 2005.

In the fall of 2004, the city, in an attempt to regulate the commercial surf instruction operations on the city's beaches and generate additional revenue, asked existing surf camp owners to submit proposals for the limited permits.

Fulhorst applied for two of the four La Jolla Shores permits to accommodate the Menehune Surf Camp and the Ocean Girl surf school, which he had recently created. Surf Diva, which had recently acquired two smaller surf schools operating on La Jolla Shores, applied for three of the four site permits.

In May of 2005, each company was granted two three-year permits. The decision meant that Surf Diva's Australian Surf Academy, which would have been granted the third permit the company's owners requested, would be unable to operate at La Jolla Shores.

That should have been the end of it.

But then a new permit popped up. In a July 11 letter to Surf Diva owner Isabelle Tihanyi, READ property agent Diane Bartko noted that the city had created an additional site, which it called 1A, for the company.

Why that fifth site was created is what Fulhorst has been trying to find out for more than a year, since the end of the 2008 renewal process when he lost his permit. Since then, his operating capacity has been reduced by half, and the investments he has made, like his partnership with a local boutique, and a mortgage on his house, threatened, he said.

Representatives from the Real Estate Assets Department could not account for the decision to accommodate a fifth site permit outside of the formal bidding process in 2005, saying only that it was within the department's authority to do so.

In deciding how many permits to grant at each beach, Bartko said the department only formalizes the recommendations made by the city's lifeguard services and parks departments, which evaluate the beaches and determine how many commercial operations each can safely accommodate.

In both 2005 and 2008, that number for La Jolla Shores was four, and four permits were made available during each bidding cycle. The creation of site 1A in 2005 following the conclusion of the bidding process appears to have been made to accommodate the Surf Diva's third company, although neither city nor Surf Diva representatives would speak about who had requested it.

Marine Safety Captain Rick Wurts, who made that recommendation in both 2005 and 2008, and who would have advised READ on any additional sites, said he could not remember how or why site 1A was created, saying only that the determination of a beach's commercial capacity changes day to day and over time...

Wurts, who in 2005 was also on the READ committee that decided which companies would be issued permits, recused himself in 2008, "in order to ensure that there was an absolutely objective evaluation," adding that "he didn't have a conflict of interest with anything. I could have been a perfectly objective part of the evaluation process."

Marco Gonzalez, an environmental lawyer who represented Surf Diva during the bidding process in both 2005 and 2008, was also unable to recall how he secured the fifth site for his clients in 2005.

"That was a long time ago. I don't remember," he said...

Dean Calbreath hopes Arnold Schwarzeneggar will stop tax breaks

Tax changes may be key to plugging budget hole
Dean Calbreath
San Diego Union-Tribune
June 21, 2009

With California on the brink of insolvency, Sen. Dianne Feinstein recently recalled the days when, as mayor of San Francisco, she would venture out into the neighborhoods and ask people what kind of services they wanted.

“Do you want more police?” Feinstein would ask.

The answer would come back, loudly, “Yes.”

“Do you want more firefighters?”

The answer would come back, loudly, “Yes.”

“Do you want to pay for them?”

“And instantly,” Feinstein said, “there would be a booming 'No.' ”

Speaking to a crowd of mostly government workers at Lawrence Livermore National Laboratory late last month, Feinstein said “that's part of the dilemma of (the California budget crisis). And the hard part of it is where the cuts have to come from.”

Feinstein's comments get to the heart of the problem facing Sacramento now. How many schools, libraries, parks and other public services is California willing to do without as we try to close our budget deficit, currently pegged at $24.3 billion?

Gov. Arnold Schwarzenegger's proposal before the Legislature is to rely on cuts alone to fix the budget: $5.5 billion from health and human services, $5.1 billion from education and $1.3 billion from the court and prison systems. The rest of the money would come from one-time sales of state assets; borrowing from cities and counties (an idea that infuriates local officials); furloughs, pay cuts and layoffs of state employees; fee increases and cuts in other services.

Schwarzenegger pledged last week to veto any budget that includes new taxes beyond what he has already proposed, which largely consist of increases to the state sales and income taxes.

“To do another tax increase is irresponsible,” Schwarzenegger said.

But if Schwarzenegger really wants to be responsible about putting out a budget, he should re-examine some of the tax breaks that were inserted into the budget last year to gain the votes needed for a two-thirds passage in the Legislature. And he should reconsider some of the taxes that were abandoned during the budget negotiations.

A conference committee of the Legislature last week proposed doing just that: clipping out the tax breaks and adding back the taxes. Despite Schwarzenegger's veto pledge, he should give the panel's recommendations some consideration:

Oil companies. California is the fourth-largest oil-producing state in the country behind Louisiana, Texas and Alaska. But despite our reputation as a high-tax area, California has never imposed severance taxes for pulling gas or oil out of the ground.

That's a stark contrast to the other oil-and gas-producing states, most of which have double-digit severance taxes. The taxes in conservative, Republican-dominated Alaska are at 25 percent, generating so much money that the state is able to pay residents $2,000 per year as a benefit, besides building a war chest for when oil will no longer be available.

The conference committee proposed putting a 9.9 percent severance tax on oil – a proposal that Schwarzenegger supported last year – which would generate an estimated $830 million in revenue.

Joseph Sparano, who represents oil interests as head of the Western States Petroleum Association in Sacramento, argues against the severance, noting that in California, as opposed to some (but not all) oil-producing states, oil companies pay property taxes for the land where they are drilling.

“If you add the severance tax, oil producers would be paying higher taxes than anywhere else in the country,” he said.

Sparano may have a point. But perhaps we could at least lift severance taxes to the point where we'd be on a par with, say, Texas, Louisiana, New Mexico and Wyoming, which now collect far more on their oil and gas than we do, even after taking property taxes into account.

Corporate tax breaks. During the budget negotiations in February, the Legislature inserted three corporate tax breaks that resulted in a total gap of $2 billion to $2.5 billion

Data from the state Franchise Tax Board show that one of the proposals – to allow companies to choose between two ways of being taxed in the state – would largely benefit the 0.1 percent of companies in California that make more than $1 billion per year. Much of the benefit would go to just nine companies, saving them an average of $33 million a year.

“These massive, permanent tax cuts will exacerbate California's persistent budget troubles, requiring deeper cuts in public services or potentially larger tax revenues from California's families,” said a report of the California Budget Project, a liberal think tank in Sacramento.

Another proposal, which would allow corporations to transfer taxes among related companies, would benefit just 0.03 percent of corporations, with the top six companies saving an average of $23.5 million a year.

Auto license fee. Schwarzenegger's first action as governor was to roll back California's fee on automobile licenses, which put a $4 billion hole in the budget. As the budget problems mounted last year, Schwarzenegger was forced to increase the license fee. And now the Legislature is proposing to raise it an additional $15.

The standard argument against raising taxes is that it would discourage people from buying automobiles. But will an additional $15 fee on an auto license really stop Californians from buying a new car? That's doubtful – but it could generate millions of dollars for the health care, education and other services being cut.

Cigarette taxes. The committee is proposing to increase excise taxes on cigarettes and other tobacco products by $1.50 per pack, nearly tripling the tax on a pack of cigarettes from 87 cents to $2.37. This proposal would increase revenue by an estimated $1 billion next year.

Esmael Adibi, economist at Chapman University in Orange, who happens to be a smoker, complained that such a tax would be “Draconian” and would fall most heavily on the poor.

But if you weigh the value of helping people quit smoking versus laying off teachers and suspending health care for poor children, it would be hard to call it an altogether bad idea. Even if that proposal were chopped down by 90 percent, to 15 cents per pack instead of $1.50, it would still generate $100 million in revenue, which would be enough to keep quite a few teachers on the job.

The bottom line is that to have a balanced budget, there will be pain all around. Assembly Speaker Karen Bass, who supports the tax revisions, said she just wants to make sure “that the shared pain be shared by oil companies and tobacco products, as well.”

Judie Italiano out as manager of MEA, the largest white collar union of San Diego city employees

Judie Italiano has resigned as manager of the San Diego Metropolitan Employees Association (MEA), and her erstwhile supporters are scrambling to distance themselves from her.

Events have developed quickly since MEA members Linda French and Ed Harris sued Ms. Italiano a few weeks ago.


Italiano Resigns After Investigation Finds Card Misuse
Voice of San Diego
RANI GUPTA
May 29, 2009

Judie Italiano, the longtime general manager of the Municipal Employees' Association, has resigned after an internal investigation determined that she continued to use the union's credit cards for her personal use despite promising not to do so in 2006.

MEA board members said in a letter sent to members today that the union had referred the matter to the District Attorney's Office for "its determination as to whether any crime was committed in the course of Ms. Italiano's breach of trust."

Michael Zucchet, a former city councilman who had been working as a consultant to the group, has been acting as general manager since Italiano was put on leave May 12 as the union conducted an investigation.

Italiano's personal use of credit cards was first discovered in 2006 and was the subject of an internal investigation, a campaign to unseat her, and an investigation by then-City Attorney Mike Aguirre.

In an interview today, MEA President Tony Ruiz said the union subsequently changed its policies to prohibit the personal use of credit cards. Italiano also agreed to pay the association back for personal charges, Ruiz said.

Ruiz said Italiano stopped using the card for personal charges shortly after those charges came to light. But starting in November 2006, she resumed using the union cards for personal charges such as groceries and a casino gift shop, Ruiz said.

Ruiz said he discovered Italiano's personal credit charges when he was preparing his first budget as association president and examined the books kept by office staff. The letter sent to members says Italiano wrote the organization a check totaling $13,903 covering the full amount, including interest, of $6,916 owed in credit card charges, along with $6,987 in annual leave. Those cover charges made through February 2009, Ruiz said.

"We were all taken in by Judie," Ruiz said. "She [said] she would not be doing this type of behavior anymore. We put these policies in place and she agreed to these policies, and she breached our trust."



[Maura Larkins' note: I'm not sure I believe Mr.Ruiz. I think Bud Simpson might be describing the situation more accurately:

"Judie pretty much had the board of directors eating
out of her hand," Simpson said. "She's done a pretty
good job for them and, as a result, she makes sure she
has the executive committee handpicked."

Simpson added that the general membership didn't
appear to care. "Just as long as you take care of us,
we'll forgive minor indiscretions," he said.]

How can this be? Jan Goldsmith is the new Mike Aguirre? Or is Mayor Sanders the problem?

Fight Like It's 2007
Voice of San Diego

During Mike Aguirre's term as city attorney, nobody dogged him as diligently as John Kaheny.

Kaheny's relentless e-mails sometimes broke news about the city attorney and sometimes spread conspiracy theories more ridiculous than the ones Aguirre was sometimes wont to spin. But always, Kaheny, a former assistant city attorney, was on Aguirre's case and his e-mail list served as an almost daily talking points memo for the ever-growing ranks of Aguirre's dissenters. I don't know that anyone locally has ever so effectively used e-mail, document sharing and media criticism to gore a rival.

Kaheny declared victory months ago when Aguirre lost his re-election bid and he said the network would largely go quiet.

It's back.

In case you hadn't noticed, there seems to be a rising tide of concern about City Attorney Jan Goldsmith along with a growing lack of respect for the mayor. First, months ago Goldsmith infuriated some local opinion leaders and Mayor Jerry Sanders for ruling that the City Council could basically ignore the mayor's recommendations on labor negotiations. This became moot -- this year at least -- when the City Council decided to agree with the mayor unanimously. Nonetheless, the Mayor's Office thought it was a ridiculous opinion and it began to foment unrest about Goldsmith's competence.

Now, Rani Gupta's story Sunday has documented another major rift between the city attorney and mayor.

Gupta reported that the Mayor's Office was struck dumbfounded that its much-championed reforms to the city's controversial DROP benefit for employees would be subject to a vote of those same employees. Where was the city attorney on this?

Key passage in the story:

The news that the DROP changes apparently require a vote of the employees was news to Sanders' office, Chief Operating Officer Jay Goldstone said in an interview last week.

"It was a bombshell that was dropped after the fact," Goldstone said. "I'm not necessarily suggesting we would have taken a different position, but we would have known going in that the imposition was only step one of a two-step process."

Goldstone said it "would have been nice" if Goldsmith's office had told city officials about the requirement beforehand. He added, "I will tell you candidly, they will claim they told us and told our lawyers at least, our negotiators, but we (in the Mayor's Office) were not aware up here."

Several hours later, after a reporter called for comment from the city attorney, Goldstone called back to offer a different version of events, saying a conversation with the city attorney had refreshed his memory about the situation.

Goldstone said that the city's outside attorneys from the firm Burke Williams & Sorensen had talked to SDCERS officials during negotiations and, based on those conversations, had advised that the city had a "very strong argument" that the provision of the city charter requiring a vote didn't apply to the changes the city was seeking to make to DROP.

The City Attorney's Office, Goldstone said, never told city officials or even strongly suggested that changing DROP required an employee vote.



Kaheny, the prolific e-mailer, grabbed the story and sent it to his network with a note essentially hinting at incompetence in the City Attorney's Office (or, maybe worse for Kaheny's group, that the office has yet to restore competence). Since Jan Goldsmith, the current city attorney, has Kaheny to thank as much as anyone for getting the job, this was a potentially hurtful development. If questions about his own abilities to run the office become more mainstream, watch out.

Here was Kaheny's note:

I have no clue what is going on. It appears that the institutional memory was completely destroyed by Gwinn and Aguirre and that Goldsmith hasn't quite figured that out yet.



Wow. Someone in Goldsmith's office responded to Kaheny assuring the curmudgeon that Goldsmith was not to blame and attacking the mayor. Kaheny passed it along. Here was the note:

No John... Jan told them. Joan Dawson delivered the message... Sanders did not want to hear it & Bill Kay told Sanders what he wanted to hear so they moved forward. Kay & his firm are also handling litigation not the City Attorney...



Bill Kay is the city's labor negotiator. Yes, what we have here is a full-throated battle between the Mayor's Office and City Attorney's Office complete with accusations of reckless political agendas and incompetence! I went to D.C. last week and came back to 2007!



Kaheny responded to the anonymous city attorney staffer.

If the City Attorney so advised why was it not it not in writing and made public? Inquiring minds need to know.



Stay tuned. This isn't just insider intrigue. Aguirre was supposedly the main reason the mayor had trouble implementing his reforms and fixes for the city. Now one of the mayor's most prominent initiatives -- to roll back the most controversial of all city employee compensation issues -- might not work and he's blaming the new city attorney.


-- SCOTT LEWIS
May 27, 2009

Lifeguard files suit against Judie Italiano of MEA

UPDATE: May 31, 2009
The lawsuit detailed below seems to have triggered some defensive maneuvers within the MEA (San Diego Metropolitan Employees Association). All of a sudden the union became interested in allegations that were brought up in 2006 and all but ignored by the board of directors. The union started an investigation, and Italiano resigned.

My question: where is Judie Italiano's faithful friend and attorney, the ubiquitous Ann M. Smith? She seems to be taking a back seat to Michael Zucchet. I guess the directors realize that the Judie and Ann show is over.



ORIGINAL POST:

Suit Filed Against Italiano
Voice of San Diego
RANI GUPTA
May 6, 2009

Two members of the city's white-collar employee union filed suit today against its general manager, Judie Italiano, claiming she misused union funds by charging thousands in personal expenses to union credit cards and made loans to herself, her family and her allies in the union.

The suit was filed by Ed Harris, a lifeguard who is leading a push for the lifeguards to separate from MEA, and by Linda French, who sought to unseat Italiano in 2007. The lawsuit says Italiano breached her fiduciary duties and seeks to have her suspended or removed as general manager.

Among the charges: that Italiano used MEA's line of credit to secure her son's business lease and make a business loan to him. The suit says Italiano made more than $130,000 in personal purchases on the MEA credit card -- including to casinos -- and used $10,000 in union money to buy property "believed to be a timeshare in Hawaii." The lawsuit alleges that Italiano has stopped making payments on a promissory note drafted after the charges were first discovered.

MEA consultant Michael Zucchet said the allegations were already reported in 2006 when former City Attorney Mike Aguirre investigated Italiano.

Zucchet said MEA started an internal investigation into the allegations, hired auditors "and deemed it to be without merit, and took care of what needed to be taken care of."

[Maura Larkins' note: Would this be an investigation by Ann Smith, Judie's inextricably close associate?]

Harris said...the problems cited in the complaint are part of the reason he's seeking to leave MEA.

Did San Diego County make a big mistake by investing almost a billion dollars in hedge funds?

Jacob's Jaw Dropping Worry Spreads to Other Issues
Voice of San Diego
Scott Lewis
March 16, 2009

This month's Vanity Fair is almost wholly devoted to financial stories...

But most interesting to locals is this story on hedge funds and "why hedge funds are imploding by the thousands..."

Obviously, the story is interesting from the perspective of San Diego County's pension fund, which has something less than a billion dollars now invested in hedge funds. But the story also helps explain one of the attributes of these hedge funds that has apparently caused some alarm among those who oversee the county's retirement system.

You might remember that when the trustees of the pension fund accepted the resignation of their chief investment officer, David Deutsch, they also talked about their potential losses in the hedge fund WG Trading. WG Trading, of course, is under scrutiny from federal prosecutors who accuse its principals of fraud. And San Diego asked for its $78 million back from the fund late last year.

But they can't get the money back for several more months. Why?

From Seth Hettena's story (emphasis mine):

The pension terminated its relationship with WG Trading on Dec. 31 after the hedge fund refused to cooperate with an SDCERA consultant. Under its agreement with WG Trading, SDCERA is not entitled to receive its money until June 30.

Such restrictions on hedge fund redemptions, known as gates, have caught many investors by surprise, including SDCERA. Board member Dianne Jacob, chair of the County Board of Supervisors, requested a review of all similar restrictions SDCERA might face with other investments.



Take note of that word: "gates."

Vanity Fair helps illuminate Jacob's worry about hedge fund gates:

There are many managers who argue that the industry's problems are at least in part of its own making. Says Leon Cooperman, who founded the $3 billion hedge fund Omega Advisors in 1991, after a 25-year career at Goldman Sachs, "Hedge funds have shot themselves in the foot. They have not treated investors correctly." Atop his list of sins: refusing to allow investors to take their money out, which is known in the industry as "gating" investors.



The author explains more about gating later in the story, which focuses on Fortress Investment Group, a hedge fund that evolved into a publicly traded company.

Managers who employ gates defend the practice on the grounds that it's within their legal rights, and that selling their positions to meet redemption requests would be unfair to those investors who wanted to stay. But the widespread impression among investors is that managers broke a social contract and are doing it to save their own skins. And there may be another reason for the gates. Fortress's documents, for instance, disclose that "our funds have various agreements that create debt or debt-like obligations ... with a material number of counterparties. Such agreements in many instances contain covenants or 'triggers' that require our funds to maintain specified amounts of assets under management."



In other words, gates may mean that the money invested in a hedge fund simply isn't accessible -- or worse, that the assets simply don't exist...

Tri-City Hospital probe kept secret: Does that prove there's no serious wrongdoing?

Should San Diego be called "Enron by the see-no-evil"?

Does keeping a probe secret prove that there was no serious wrongdoing? Quite the opposite, I would say.

Tri-City Hospital isn't releasing the probe conducted after CEO Art Gonzalez and eight administrators were placed on administrative leave. My guess is that the board doesn't want to go through litigation which would be expensive for the hospital. My guess is that the former employees don't want a trial, either, because the information in the secret probe would no longer be secret. Instead, both parties want to settle, keep the report secret, and preserve the reputations of both the former employees and the board members who worked with them.

Terry Francke, counsel for Californians Aware, says, "If they did find serious misconduct by these employees, then it becomes a matter of public interest" and the report must be released.

I agree, but in San Diego, wrongdoing is regularly hidden by public entities. Maybe the city should be called Enron by the see-no-evil.

Welfare for the rich: top California officials bill taxpayers for nonessential travel

Report: Top Schwarzenegger staff traveled on taxpayer's dime
Channel 6, San Diego
Feb. 28, 2009

SACRAMENTO (AP) - A news report says in the midst of a budget crisis, top officials in Gov. Arnold Schwarzenegger's administration charged taxpayers tens of thousands of dollars for airfare, hotels and meals despite a ban on nonessential travel.

The Los Angeles Times says 10 high-ranking staff members who live in Southern California billed the state for routine trips from their homes to Sacramento.

And Carrie Lopez, the director of the state Department of Consumer Affairs, billed the state for transportation costs to attend a Justin Timberlake concert with her daughter. Lopez said the transportation cost was for a meeting with an energy company executive but the company denies it.

The Times says expense reports and calendars show many of the expenses submitted by top staff were incurred after the governor issued an executive order a year ago requiring state agencies to reduce travel costs because of the budget crisis.

The governor's office says the travel expenses will be reviewed.

Greg Cox defends grants to daughter's employer, Elite Racing Foundation

Cox defends grants to daughter's employer, Elite Racing Foundation
By Eleanor Yang Su
San Diego Union Tribune
February 6, 2009

County Supervisor Greg Cox is defending his decision to award grants that top $100,000 to the Rock 'n' Roll Marathon while not disclosing that his daughter works for the company that stages the event.

Cox, whose district encompasses much of the marathon route through downtown San Diego, Hillcrest and Mission Bay, helped provide a $12,500 community enhancement grant this year to the Elite Racing Foundation for Children, Education and Medical Research.

He has recommended similar amounts since 1999 for the charity, which co-hosts the marathon with the privately held Elite Racing Inc. Cox also received $750 in campaign contributions from Elite executives in 2007, when he was running for re-election.

The San Diego Union-Tribune reported on Sunday that Elite Racing Inc. has been profiting from the marathon while its affiliated nonprofit has received hundreds of thousands of dollars in public subsidies and grants.

Elizabeth Cox has worked at Elite Racing Inc. since August 2002, and is responsible for development and community relations.

Supervisor Cox said he started supporting the marathon a decade ago because it helps boost the local economy and community involvement.

“I wasn't going to penalize the Rock 'n' Roll Marathon because of the fact that my daughter works there,” he said. “Nor was I going to reward them. . . . My decision has been to hold them to the same dollar amount for the past five or six years.”

Cox did not disclose his relationship when voting on the grant awards “because there was no legal reason to,” said Luis Monteagudo, an aide to Cox. Only the financial interests of dependent children and spouses must be disclosed, Assistant County Counsel Tom Montgomery said.

Bob Stern, a government ethics expert, said Cox should have recused himself and allowed other supervisors to recommend and vote on the grant...





UPDATE 1:

Race organizers hire independent auditor
02/06/2009
By Eleanor Yang Su


Background: The for-profit Elite Racing Inc., organizer of the Rock 'n'Roll Marathon, has an affiliated foundation that collected more than $600,000 in public subsidies and grants, according to city and county records analyzed by The San Diego Union-Tribune.

What's changing: Elite Racing's parent company has hired an auditor to look into finances. It has also withdrawn an application for city tourism promotion funds for next year's marathon.

The future: The audit is expected to be completed within three weeks.

...Elite Racing was acquired 13 months ago by a private equity firm, Dickey said, and the new management was unaware that the grants and subsidies were flowing in through the Elite Racing Foundation for Children, Education and Medical Research.

In naming the foundation as a co-host for the event, Elite benefited from a city policy that allows nonprofits to pay about half the cost for police services used race day. Those subsidies have been worth $40,000 to $45,000 a year. County supervisors also gave grants of about $20,000 annually to stage the marathon.

During the past year, the company has reported profits ranging from nothing to $275,000 in its applications to the city and county to stage the event and collect community grants...

Board members at the San Diego Tourism Promotion Corp., the nonprofit entity that will grant an estimated $25 million in hotel fee revenue to promote tourism this year, had mixed reactions about the withdrawn application.





UPDATE 2:

Marathon Organizer Rescinds Application For Tourism Funds
02-06-2009
Metro Networks Communications

The organizer of the San Diego Rock 'n' Roll Marathon has rescinded an application for 375-thousand dollars in city tourism/promotion funds. It has also announced it's hired an outside auditor to investigate questionable payouts associated with an affiliated charity. The actions come after it was discovered Elite Racing Inc. profited from the race while its charity foundation acted as a co-host for the race. The charity has also received over 600-thousand dollars in city subsidies and county grants over the race's eleven-year history.

San Diego Supervisors give out surplus revenue when there's no surplus

The Supes' Logic

The San Diego Union-Tribune, a local newspaper, has a bit of interesting context about the county's financial situation today. The county is considering laying off employees to cope with declining revenue.

Reporter Craig Gustafson writes:

"In a video message today to the county's 18,000-plus employees, Chief Administrative Officer Walt Ekard warned "actual layoffs will be necessary" to close a budget gap caused by the slumping economy."



At the same time the county is cutting, the supervisors that oversee operations continuing giving out grants to local community groups -- money the supervisors describe as coming from surplus revenue.

Why give out surplus revenue when there's no surplus? The supes say it's because there was a surplus when they approved their budget last year.

They're sticking to their budget when it allows them to give out grants that critics say are used to curry campaign support.

But they're not sticking to their budget when they have to make adjustments to cut services or eliminate staff.

-- ROB DAVIS
Tuesday, January 13 2009-- 12:47 pm

San Diego County uses worn-out excuse of attorney-client privilege to keep investigation report secret

Did gifts cause CCS therapists to favor certain vendors of wheelchairs and other medical devices?

The Investigation the County Doesn't Want You to See
By WILL CARLESS
Jan. 4, 2009

At some point in 2007, a whistleblower at California Children's Services, a program run by the county of San Diego that provides wheelchairs and other medical devices to children with physical disabilities, filed a complaint with the county alleging improprieties within the program.

The county launched a widespread investigation into the allegations that continued for at least 13 months in 2007 and 2008, records show. The investigation led to disciplinary action against county employees and changes to the county's ethics policies, but the report the investigators produced, and all the information it contains, is being kept a secret.

... Minutes from meetings show staff discussed allegations that therapists at the CCS program received gifts from vendors in violation of county ethics rules and may have favored certain vendors over others because of those gifts.

But exactly what was alleged, who was investigated and how deep any problems at the program went, are all things the county's top officials have decided shouldn't be released to the public...

One public records expert said attorney-client privilege is consistently used by public agencies to avoid releasing embarrassing documents, and pointed out that the county could chose to waive its privilege and make the document public.

The county has also refused to provide a copy of the report to the state of California, which provides the bulk of the $20 million budget for the CCS program. A spokesman for the California Department of Health Care Services, which oversees the CCS program, said county officials told the state that the investigation only concerned "personnel issues" and that they had not found any evidence that the program had been negatively impacted by the individuals investigated.

...A county spokeswoman said in an e-mail that the medical therapists work with the family's physician to provide the best piece of equipment available to the child from a list of possible vendors.

The selection of vendors, and the possible undue influence placed on county therapists by vendors who gave gifts to county staff, appear from documents to have been the subject of the internal investigation sparked by the whistleblower...

...In San Diego, public bodies regularly hand over such reports and documents.

But, in response to a request from voiceofsandiego.org media partner NBC 7/39 for the investigative report, County Counsel John Sansone claimed that the document fell within one of the law's exemptions and therefore did not have to be provided...