The $2.7 billion San Diego City Employees' Retirement System pension system has sued city attorney Michael J. Aguirre to prevent his office from becoming the system's legal counsel. The plan used Loraine Chapin, a lawyer hired as general counsel by the system.
"I want the city attorney to be allowed in as the legal counsel of the pension plan because I have real concerns of an investment loss of $405 million (by the retirement system) in 2002," Mr. Aguirre said.
The lawsuit, filed Jan. 27 in San Diego County Superior Court, also asks for the return of documents Mr. Aguirre's office took from the city's auditor. Mr. Aguirre said the documents were taken for SEC and grand jury investigations and seized the documents in order to comply with subpoenas.
Mr. Aguirre is considering asking the court to put the system up for receivership, pending changes to the makeup of the retirement system's board by Mayor Dick Murphy, to be made April 1. Mr. Aguirre will apply to the court if he is not satisfied with the board changes. Paul Barnett, the system's assistant retirement administrator declined to comment.
Separately, the city hired Kroll Inc. to help complete the city's 2003 Comprehensive Audit, including reconciling discrepancies uncovered in a recent investigation by the city attorney and a report from Vinson and Elkins on the pension system's disclosure practices. Kroll's team will be led by Lynn Turner, chief accountant for the SEC from July 1998 to August 2001 and now a Kroll senior adviser, said Jodie Roenbloom, a Kroll spokeswoman. Rating agencies declined to rate the city's upcoming $200 million in pension obligation bonds until an audit was completed.
