San Diego's Prop C, a way to silence the auditor

‘I characterized that administration as ‘form over substance.’ They were more concerned with how their guy looked than to do the right thing.” That is John Torell, who was San Diego city auditor from 2005 to 2007, speaking in an interview. He tried to teach the administration of Mayor Jerry Sanders (“their guy”) that an auditor should be independent of the entity being audited, a basic accounting concept. “They didn’t quite get the role of an independent auditor in an organization. They did not nurture or foster or encourage contrary opinions. It was an oppressive environment.”

The end came early last year when Torell was preparing a report on internal controls. He prepared a statement showing how the City’s internal controls “ARE MINIMALLY ADEQUATE TO ASSURE” timely and accurate financial statements. That “was not acceptable to the Mayor’s Office,” says Torell. His boss, Jay Goldstone, told him so. The report was changed to read that the controls “HAVE BEEN IMPROVED TO PERMIT” timely and accurate financial statements. Torell was told to state something he knew was not true. “They perceive the auditor’s role as one of a team player. This is how San Diego got in trouble in the first place. People knew the financial statements were not adequate, but they were afraid to say so.”

Nonetheless, the real estate development industry, which has Sanders and his team in its pocket, has maneuvered a noxious antihonesty measure onto the ballot for June 3, Proposition C. Incredibly, it would permit the mayor to play a major role in the selection of the official who audits city departments, which the mayor himself runs.

Torell is now back in Santa Barbara. But he is so disturbed by Proposition C that he has prepared a message for San Diegans. Torell’s statement reads in part: “As the former San Diego city auditor, my statutory responsibilities included rendering an annual opinion on the adequacy of the City controls over financial reporting. My ability to express that opinion was severely curtailed after the ‘strong mayor’ form of government was implemented. As the auditor, I now worked for the mayor and was told I needed to be a ‘team player.’ The conflict between this concept and the auditor’s code of professional ethics was the reason I resigned from City employment. The objectivity, honesty, and the openness that results from the city auditor being free from the fear of retaliation by the mayor’s office serves not only to benefit the City organization, but ultimately serves the best interests of the taxpayers.”

Under Prop. C, the city auditor would report to a new audit committee made up of two councilmembers and three “public members.” A screening committee would recommend candidates for those public-member posts; the Mayor’s Office would play a role in that screening.

Not surprisingly, the downtown business establishment and Union-Tribune favor this rigged system. Councilmember Donna Frye knows what happens in San Diego when so-called outside experts get named to such posts: those experts are usually tied to the establishment.

That’s exactly how San Diego got Prop. C. Sanders named a bunch of real estate lawyers and lobbyists, along with establishment lackeys, to the Charter Review Committee. Hardly surprisingly, it recommended that the mayor get more power, including the ability to play a major role in naming the auditor. Prop. C “allows the mayor to be involved in the selection directly of the auditor,” as well as the firing of that auditor, says Frye. “It would be like Duke Cunningham appointing the person who audits his IRS returns.”

Says Torell, “Don’t be fooled by Proposition C. It is a veiled attempt by the Mayor’s Office to maintain control over the selection and supervision of the city auditor. Only an auditor free from the political pressures of the Mayor’s Office can serve the City and its citizens.”

The auditor should be elected or named by the council. But that would be democratic.