Scott Peters was NEVER investigated by the Securities and Exchange Commission (“SEC”) and he did not use taxpayer funds to “defend” himself. In 2004, the City of San Diego’s own City Attorney, Mike Aguirre, urged the SEC to find that the City of San Diego did not make full disclosures when offering five bonds/notes to the public in 2002 and 2003. He refused to represent a number of senior city officials, including council members, in dealing with the issue. The City Council, including Scott Peters, disagreed with Mr. Aguirre’s position, and believed that his representation was a clear requirement of the city charter. Instead, he advised the city to hire private attorneys, and the City Council had no choice.
The Securities and Exchange Commission reviewed thousands of documents and interviewed dozens of witnesses. Each council member had to individually respond to numerous subpoenas for records and testimony in order to assist the SEC with its due diligence. As President of the City Council at the time, Scott took the lead in ensuring that the City was as responsive as possible to each and every request made of the City Council and City staff, thus his attorney fees were higher than the others.
The enforcement agencies, including the SEC, stated in writing that Scott was not a target or subject of any of their investigations. Scott was never a defendant and was never a target of the SEC’s review, nor were any other members of the City Council.
The SEC did charge six city employees who were pension board members with civil violations of the securities laws. Some of these cases were settled out of court. After years of litigation against the remaining pension board members, the SEC acknowledged its lack of evidence and dismissed its case against the defendants in the case.
The District Attorney and U.S. Attorney also filed criminal charges against the same employees. All of these cases were ultimately dismissed by the courts. The United States Supreme Court, the United States District Court, and the California Supreme Court all ruled that no criminal laws were violated by any member of the Pension Board.
On numerous occasions, the City Council requested that the City Attorney provide the representation needed torespond and provide the SEC with the information it needed; but he declined to do so and insisted they retain outside independent counsel at taxpayer expense. Had the City Attorney performed these duties, outside legal fees would have been significantly less.
The City Council and senior staff worked hard to fix the problems that they and outside agencies had discovered. At the end of their work, the SEC’s own outside monitor, Stanley Keller, said that San Diego’s financial reforms were a model for other governments to follow.