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In an editorial Dec. 31, the Wall Street Journal excoriated "shady accounting in the public sector," and cited San Diego as an example. The editorial asked multi-billionaire Warren Buffett to tell governments to insist on honest accounting, now that Buffett's company, Berkshire Hathaway, has launched an insurance company to help municipalities find insurance to back their tax-free bonds. "'An ongoing [Securities and Exchange Commission] investigation resulted in new fraud charges this month against San Diego's [former] auditor," wrote the journal. "The City issued false and misleading financial statements in no fewer than five separate bond offerings in 2002 and 2003. The City didn't tell investors that its unfunded pension liabilities were about to balloon to $2 billion by 2009, or about that little matter of another billion for retiree health care...The residents of San Diego know all too well how costly such frauds can be for taxpayers and citizens who rely on City services."

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Comments

Anonymous Jan. 4, 2008 @ 1:48 p.m.

I suppose Buffett could quit taking deductions if he wanted to pay a higher tax rate than his secretary.

Here's a question going back a couple of weeks to the IRS letter. Were any of the retirement system code changes still sitting on Aguirre's desk some of the things that the IRS had problems with? Frankly, I have no idea, but someone else raised that question of me today.

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Anonymous Jan. 3, 2008 @ 7:17 p.m.

Mayor Sanders has a lot of work to do and he really has not accomplished much during this term. In my opinion the Auditor’s position has to be completely independent of Mayor's office and immune from the day-to-day political pressures of running the City. Although I don't know how this would ever be accomplished, the Auditor needs an independent watchdog that produces MONTHLY reconciliations to keep the Council and Mayor's office in line and an eye on them for all of us taxpayers. Don, do you have some free time?

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Don Bauder Jan. 3, 2008 @ 7:51 p.m.

Response to post #1: Yes, the auditor must be independent from the mayor. You are right: Sanders has accomplished almost nothing. The pension liabilities prevented the City from following recommendations after the '03 fires. Those same liabilities are keeping the City from doing anything about the rotting infrastructure. But Sanders sits there and figures San Diegans are apathetic. Best, Don Bauder

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Don Bauder Jan. 3, 2008 @ 10:38 p.m.

Response to post #3: Buffett is an investment genius, a humanitarian, and someone who is capable of understanding the complexities of scams, such as the tax code. He thinks it is wrong that he pays a lower tax rate than his secretary. I agree. I think it is utterly disgraceful that hedge fund and private equity fund honchos making between $260 million and $1.5 billion a year are taxed, for the most part, at 15 percent. They should be paying at least 35 percent, and, actually, the top tax bracket for those raking in such money should be raised considerably from 35 percent. These people contribute nothing to the economy; in fact, private equity funds mainly detract from the economy. Leveraged buyouts are a scam. Best, Don Bauder

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Anonymous Jan. 4, 2008 @ 3:02 p.m.

If you'd like to read the actual IRS letter here is a link to it: http://www.blogofsandiego.com/Issues/Pension/SDCERS/Compliance/IRScompliance12.21.07m.pdf

Seems to me it's the City Attorney's job to write Ordinances for the Muni Code. We already know he delayed writing the appropriate Ordinances that would end several pension benefits for new hires between July 05 and Feb 07. And it also seems reasonable to me that his office is ultimately responsible as to the status of the Municipal Code and ALL of its sections.

With that said, Mr. Aguirre has all but said he was using some sort of "Strateejury" (Sorry Mr. President") while battling in the courts for his failed lawsuits. Now he seems distracted by his fight for the Sacramento Delta Smelt. But remember, quoting Mr. Agirre from one of his many interviews on water issues... He's just like the Delta-Smelt, small but powerful. Would it be nice change for 2008 if he could stay powerfully focused on one issue to its successful conclusion.

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Don Bauder Jan. 4, 2008 @ 5:07 p.m.

Response to post #5: People should take the deductions they are entitled to. But tax rates are too low for people in the highest income brackets. Somebody making $1 billion a year working for a hedge fund should pay 35 percent OR MORE, for example, rather than 15. Best, Don Bauder

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Don Bauder Jan. 4, 2008 @ 5:25 p.m.

Response to post # 6: There were two interpretations of whether Aguirre delayed rewriting the code and thus permitted a bunch of new hires to get the old, hyper-generous benefits. One law firm, hired by the city attorney's office, said it wasn't true: those people did not deserve the old lavish benefits. Another law firm, hired by SDCERS, said otherwise. Sanders, of course, picked the one that made Aguirre look bad. So did the U-T, of course. I suggest that you not take what Sanders or the U-T says as truth. Best, Don Bauder

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Anonymous Jan. 4, 2008 @ 6:10 p.m.

Don wrote, "So did the U-T, of course. I suggest that you not take what Sanders or the U-T says as truth." I might add Aguirre to that list. Noble though his cause may be, I feel that he lets that cause blind him to the truth.

On Buffett, I certainly agree with the ultra-rich (and regular old rich, for that matter) should pay more. So should corporations.

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Don Bauder Jan. 4, 2008 @ 9:13 p.m.

Response to post #9: Capitalism needs more Buffetts -- superrich who know that greed has gone berserk. The system must be saved from itself. There is no better economic system, but when it gets so greed-smitten that it threatens social stability, as is the case today, then it must be reined in. The victories of Huckabee and Obama, and the strong showing of Edwards in Iowa should sober up Wall Street and corporate CEOs. Best, Don Bauder

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Anonymous Jan. 4, 2008 @ 10:36 p.m.

Re #8: There are two interpretations of what the impact of Aguirre's office not preparing the code amendment is; there are NOT "two interpretations of whether Aguirre delayed rewriting the code". He and his office did not rewrite the code until about 18 months after the parties agreed to the change (that includes the unions who voted overwhelmingly to support the changes) - that's a fact. What the outcome of that delay and it's relation to who might be eligible for specific benefits is what has been interpreted differently.

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Anonymous Jan. 5, 2008 @ 6:49 a.m.

Don,

An article from the Voice of San Diego says you live in Colorado and write from there. Is this true? You do not live in San Diego now?

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Don Bauder Jan. 5, 2008 @ 7:35 a.m.

Response to post #11: I have seen both legal interpretations. You may be right, but I would have to go back and read them both before I could agree or disagree with you. Best, Don Bauder

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Don Bauder Jan. 5, 2008 @ 7:44 a.m.

Response to post #12: Yes, I live in rural Colorado, surrounded by 14,000 foot peaks, and stay in touch with San Diego by phone, fax, email, etc. Among many things, that Voice piece called me bitter and angry. Do you suppose the zero degree weather arouses my hostility? (Actually, I have been bitter for many years about how the establishment is plucking San Diego clean, and how establishment media cover it up, but I was never able to express it as clearly when I was with the U-T.) Best, Don Bauder

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Anonymous Jan. 5, 2008 @ 12:11 p.m.

Actually Don it was not the VoSD that called you bitter, it was one of the welfare queen City workers who posted that in a comment, someone that does not agree with your views...I get it all the time, goes in one ear and out the other. When you start hitting pay dirt, then come the negative attacks, just like in the presidential campaigns.

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Don Bauder Jan. 5, 2008 @ 12:28 p.m.

Response to post #15: No, the reviewer used the words bitter and angry. Possibly one of those making a post did, too. As I say, for a long time I have been angry about the San Diego establishment stealing from a broke City, and the mainstream media letting it happen because they profit. Taking the heat is something I enjoy. How else can you be a blogger if you don't encourage people to call you a no good s.o.b.? I always say the media business is like the aerospace defense business: start a war and arm both sides. Best, Don Bauder

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Anonymous Jan. 5, 2008 @ 1:26 p.m.

I guess the fact that you live in rural Colorado and still can write cogently about San Diego is compelling evidence for a budding news publisher to set up shop in Bangladore (or similar) and really put out a paper in the US on the cheap. Seems to me a real community paper needs its writers to have an on-the-grounds presence in the same community. But given the thrust--which seems accurate-- of the Voice of San Diego piece that the Reader doesn't cover the community to begin with, it probably doesn't matter in your case. Besides, the articles in the Reader have about as much relevance to its audience, which picks the thing up for ads, movies, etc. as Playboy's articles have to the audience picking Playboy up for...well...not for the articles, that's for sure.

And how many people would even pick up the REader for the ads and listings if it were't free?

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Don Bauder Jan. 5, 2008 @ 2:48 p.m.

Response to post #17: You would have a point if it weren't for the fact that I covered San Diego for 30 years as financial columnist (and most of the time also financial editor) of the Union and then Union-Tribune. I lived in San Diego County for those 30 years. I know where the bodies are buried. I have institutional knowledge of the place, particularly the rats in the walls. I still have excellent sources. I do believe papers should have reporters on the ground covering a community. The Reader has the best document digger in the U.S., Matt Potter, bringing out the dirt that is buried in documents. We just don't jump every news story unless we have a unique angle. Finally, I don't think either the Voice of the U-T does a good job covering San Diego. Certainly, both do a poor job covering the crooks, particularly establishment crooks. I think it's because they don't want to cover this area. Best, Don Bauder

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Anonymous Jan. 7, 2008 @ 8:36 a.m.

Dear Mr. Bauder,

I am writing to ask if I can interview for my senior thesis.  I am writing about why some sports stadiums are heavily subsidized by state and local governments and others are not.  The thesis will include a case study about PETCO Park, and, since you wrote so much about the negotiations for the park, I would like to interview you.
If you could send me an e-mail at dltannen@fas.harvard.edu, I would greatly appreciate it.  Thank you so much!

Best, David Tannenwald Harvard College, Class of 2008 dltannen@fas.harvard.edu

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Anonymous Jan. 7, 2008 @ 10:57 p.m.

David,

I'm pleased to see you writing your thesis on this important topic.

Please take into account a very important factor relating to the public vote for the Padres subsidy. The team went to the playoffs and world series just weeks before the vote.

Note that the Chargers, getting desperate about losing their subsidy momentum, are now in the playoffs for the first time since 1994, when they negotiated their $100 million plus gift with McGrory and Golding.

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Don Bauder Jan. 8, 2008 @ 6:58 a.m.

Response to post #20: The Padres rented a top team for the 1998 season, the year of the vote -- particularly the pitcher Brown (forgotten his first name). After the series, many of the top players, including Brown and the outfielder Finley (sp?), who had campaigned for the subsidy, were gone. The team languished for a couple of years and then bulked up again when the ballpark opened. The Chargers now have a good team after many years of being horrible. Obviously, they are hoping to make the Super Bowl as a ploy to get what they want. But from whom? The City can't afford to give them land, although the establishment, which controls most pols, wants a huge subsidy.The Chula Vista proposals appear shaky at best. Basically, the Chargers want to go to L.A. and have for years. They would take Vegas if the league would agree, and it would be hypocritical for the league to turn down such a move, since the gambling industry is such a huge part of pro football (and other pro sports). For decades, owners have been connected with the gambling industry. Best, Don Bauder

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Anon92107 Jan. 10, 2008 @ 3 a.m.

Response to: In an editorial Dec. 31, the Wall Street Journal excoriated "shady accounting in the public sector," and cited San Diego as an example. ---- "The City issued false and misleading financial statements in no fewer than five separate bond offerings in 2002 and 2003. The City didn't tell investors that its unfunded pension liabilities were about to balloon to $2 billion by 2009, or about that little matter of another billion for retiree health care...The residents of San Diego know all too well how costly such frauds can be for taxpayers and citizens who rely on City services."

Don, nothing says Aguirre is right better than this WSJ editorial.

Even “Big Business”/WSJ has to admit that the U-T Establishment and their corrupt “strong” Mayors plus deadwood city accounting, real estate and other office managers who suck up to the Mayors are the root cause of our problems today.

The tragedy that all the anti-Aguirre/U-T establishment sycophants ignore is that San Diego citizens, police and fire personnel are increasingly risking our lives everyday because of U-T Establishment City Hall.

Too many San Diegans have died and lost property because of the few corrupt Mayors and city managers who are obsequiously subservient to the U-T Establishment instead of being the elected and appointed servants of the people of San Diego that they should have been.

That’s why Aguirre has more than enough to do just roto-rooting the U-T sewer that floods the Mayor’s office.

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Don Bauder Jan. 10, 2008 @ 7:52 a.m.

Response to post #22: You are correct: the Wall St. Journal editorial was still another vindication of Mike Aguirre, and also Donna Frye. But the establishment media cover up the negative national attention that deservedly San Diego gets. Best, Don Bauder

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