Mayor Jerry Sanders and City Attorney Michael Aguirre will travel within days to Washington, D.C., to meet with the Securities and Exchange Commission, one of several agencies examining San Diego's handling of its finances over the past decade.
Two City Hall officials said the trip is set for early next week. They asked not to be identified because of the sensitive nature of the talks with the regulatory agency, which has emphasized the confidentiality of its two-year probe into the city's bond disclosure practices.
Fred Sainz, the mayor's spokesman, would not say whether a meeting is scheduled or discuss if the mayor has business outside San Diego next week.
Were such a trip planned, Sainz said, it does not necessarily signal “a zenith moment” in talks with the SEC or that a settlement is pending.
“It would be part of a process of trying to put this episode behind us,” Sainz said. “If a meeting were taking place, it's not an end-all, be-all.”
Aguirre refused to discuss whether a meeting is set, but he said he will be out of town on city business Monday. He would not say where he is going nor if the mayor would be on the same trip.
Federal investigators confirmed in February 2004 that the SEC and the U.S. Attorney's Office had opened investigations related to the city's pension deficit, now put at $1.4 billion, and San Diego's failure to disclose it and other obligations to bond investors.
The city has been engaged in protracted negotiations with the SEC, led by Aguirre and a private Los Angeles attorney, John Hartigan, hired to represent San Diego.
All talks to this point have been in Los Angeles, with representatives of a regional SEC office, Sainz said.
The SEC has offered preliminary findings that the city violated securities laws, according to a draft document. The conclusions have been kept under wraps, although Hartigan cautiously walked the City Council through limited aspects of the investigation at a meeting two weeks ago.
The five-member commission must review determinations by its staff before any deal can be completed.
Sanders and other city officials have argued that it is crucial to demonstrate to the SEC that the city is addressing the disclosure problems and other financial failings.
The mayor embraced dozens of recommendations in the city's recently completed $20 million inquiry into the pension and bond issues, using them to establish a 121-point remedial plan.
The council approved the plan in concept; it will begin reviewing narrow aspects of it next month.
The inquiry, led by former SEC Chairman Arthur Levitt, also found that the city had broken securities laws, and that several elected officials, including former Mayor Dick Murphy and four current council members – President Scott Peters, Toni Atkins, Jim Madaffer and Brian Maienschein – violated federal and state laws.
Those breaches dealt with failing to set fair sewer rates for residents. The council members, along with Councilwoman Donna Frye, also were accused of negligence in their review of the city's market disclosures.
Jennifer Vigil: (619) 718-5069; jennifer.vigil@uniontrib.com
