continued Girard was clumsily trying to split hairs but wound up shoveling horse manure. What's made underfunding possible is phony accounting, and Shipione has been pointing that out for years. For example, in September of 2003, she told city officials and underwriters that the practice of skimming capital gains out of the pension system to pay for employee health care might be in violation of accounting regulations. She also warned that use of a shaky accounting method permitted the underfunding. She told the city's outside counsel of her concerns, and he shared those misgivings. He then set in motion the actions that culminated in the January 2004 mea culpa.
In April of 2003, councilmember Donna Frye called for an outside audit of the pension system. She was successful. "There is a way to fix this thing," she says. "The first is full disclosure -- getting rid of the culture of secrecy. The second is cooperating with the investigating agencies. We have to assemble a team."
And believe it or not, the city wants to have Vinson & Elkins do an investigation of illegal intent -- the issue it was supposed to avoid the first time around. "I would not hire the same firm, Vinson & Elkins," says Frye.
But San Diego will have to find some firm to get rid of the rats. And then it will have to pay the piper.