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GOVERNMENT: Hard Times for San Diego: Why Would Anyone Want to Live in a City?

Posted May 25, 2005



By L.K. Samuels

Like many cities, San Diego, the third largest municipality in California, has fallen on hard times. The mayor has resigned. Three council members were put on trial on federal charges of campaign kickbacks. Six former and current members of the San Diego pension trustee board have been indicted. The City has 1.37 billion in unfunded pension debt. There are four current federal probes of San Diego’s financial reporting practices. The city is on the brink of bankruptcy. The city books have not been audited since 2003, causing their bond rating to drop two notches – which will cost taxpayers more in interest payments for past city loans.

San Diego is not unusual when it comes to graft and corruption. Many smaller, lesser-known cites have shady city governments. What is unusual about San Diego’s troubles is that it was considered one of the best-run cities in America. In fact, San Diego has often been dubbed “America’s Finest City.” That very motto is on the city’s official website.

But the scope of San Diego’s depravity is shocking. For instance, no one may be governing the city when the Mayor Dick Murphy leaves office in July because of a widening federal investigation over irregularities in the city pension fund. That’s because the Deputy Mayor and interim replacement Councilman Michael Zucchet may be in jail. In 2003 three San Diego council members -- Michael Zucchet, Ralph Inzunza and Charles Lewis were indicted on charges of participating in an alleged scheme to repeal restrictions on an adult entertainment strip club/bar in exchange for campaign contributions. Other charges include wire fraud, conspiracy to commit wire fraud and extortion.

The hole goes deeper. A week after Mayor Murphy resigned on April 25, a deputy city manager, the human resources director and the former treasurer also resigned as the federal probe widened. On May 17, 2005, according to Associated Press, “Six current and former trustees of the board that oversees the city's scandal-ridden pension fund were charged with felony conflict-of-interest violations Tuesday for allegedly casting votes from which they personally profited.” The deficit for the San Diego pension fund is now pegged at $1.37 billion and growing.

According to Tony Perry of the LA Times (May 17, 2005), the six defendants voted to increase retirement benefits substantially without providing a means to pay for them in the future. Worse, the defendants benefited handsomely from their policies. Tony Perry writes: “The monthly pension of Ronald Saathoff, the longtime head of the city's firefighters’ labor union, rose $2,530 to $9,703. John Torres, vice president of the city's largest labor union, the San Diego Municipal Employees Assn., saw his monthly pension increase $386 to $4,016.”

Both U.S. Justice Department and the Securities and Exchange Commission are also investigating the city's finances.

Because of the financial mess, city libraries are bracing for cuts, along with pay cuts for firefighters and police. Potholes are not being fixed. Further, many old sewer pipes have stopped being replaced – “despite a federal order to fix the dilapidated system.” (Associated Press, May 23, 2005 Monterey Herald).

With such wide-spread corruption in municipal governments, why would anyone want to be part of a city?





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