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San Diego Mayor Resigns Amid Finance Scandal

MADELEINE BRAND, co-host:

This is DAY TO DAY. I'm Madeleine Brand.

So much for San Diego as a model of good government. Today, the City Council meets to figure out how to replace the mayor, who resigned last week in disgrace. Federal officials are investigating Dick Murphy's role in the more than one-billion-dollar deficit in the city's pension fund. Meanwhile, the vice mayor and a City Council member are going on trial for allegedly taking illegal campaign contributions from the owners of a strip club. Russell Lewis joins me now from member station KPBS in San Diego.

And welcome to DAY TO DAY.

RUSSELL LEWIS reporting:

Hello. It's good to be here.

BRAND: Well, tell us more, first of all, what happened with this pension fund and how the mayor was involved.

LEWIS: Well, it actually happened before the mayor's watch in 1996. Then San Diego was hosting the Republican National Convention, and they were looking for a way to pay for it. And so they came to agreement to put less money in the city employee pension fund and to offset some of that money by giving it to the folks who were bringing the Republican National Convention here. However, on Dick Murphy's watch, when he was elected in 2000, the City Council took two key votes in 2000 and 2002 to continue the underfunding in exchange for enhancing benefits. So really, what's at stake here is a couple of key votes the City Council has made in order to not have to pay a lot of money into the general fund budget in order to sort of keep San Diego running as is, but now they're paying for it.

BRAND: Right. And now they're being investigated by the Justice Department, the SEC. Could the city be forced into declaring bankruptcy?

LEWIS: Well, there are some people who say that's probably the only option that the city has. Some of the elected officials, including the mayor, say that's not an option, that the city's revenues are still strong, that it's not a possibility and that a lot more needs to happen before bankruptcy should even be talked about. But there's a growing upswell of support from some in the business community and others who say that perhaps bankruptcy is a possibility that the city should look at a little more closely.

BRAND: Now Dick Murphy's re-election was contested with more votes actually going to his challenger, City Councilwoman Donna Frye. What are her prospects now of becoming mayor?

LEWIS: Well, she is the only official person who has said, `I am a candidate to be the next mayor.' Her write-in campaign generated a lot of public support. She threw her hat into the ring five weeks before the election in November. And, as you mentioned, she actually got the most votes, but a court ruled that some of the voters didn't properly fill out their write-in ballots and thus put Mayor Dick Murphy in for a second term.

Now that he's stepped down, it has opened up a whole other hornet's nest of exactly so many legal issues, and it seems every day here in San Diego there's a new wrinkle, a new rub and it just--every day, you sort of have to scratch your head and say, `Well, what's going to happen today?'

BRAND: Hmm. And so he's not the only one who's in trouble there in San Diego. Tell us more about what's going on with these illegal campaign contributions and other politicians involved.

LEWIS: Two City Council members, including the deputy mayor, Michael Zucchet, go on federal corruption trial tomorrow. That's expected to be a three-month-long trial. This trial and these charges have nothing to do with the underfunding and really have nothing to do with what everybody's talking about at the moment. But allegedly, these two council members, as well as a third council member who passed away and is no longer charged in these crimes--the government alleges that they accepted money from strip club owners in an attempt to ease no-touch rules at strip clubs.

The council members say they've done nothing wrong, that the money that they took was properly put down as campaign contributions. In fact, the City Council didn't make any changes to the laws and they never even talked about it. So it's going to be an interesting case for both the government and for the defense to try to get into, but it's clear that San Diego really is a town in turmoil at this point.

BRAND: San Diego had a reputation as a squeaky clean city. What are the reactions among regular people there to what's going on in the government?

LEWIS: I think there's a lot of frustration. There's a lot of sense that the people are just sort of irritated that this town that many have dubbed America's finest city at this point is anything but, at least from a governmental standpoint. There's talks of hundreds of city layoffs. There are some 60,000 potholes on the city streets that haven't been filled. Discussions about building a new main downtown library appear to be running into trouble at this point. So the frustration is mounting certainly.

BRAND: Russell Lewis is senior editor at KPBS in San Diego. Thank you for joining us.

LEWIS: You bet. Transcript provided by NPR, Copyright NPR.

Madeleine Brand
Madeleine Brand is the host of NPR’s newest and fastest-growing daily show, Day to Day. She conducts interviews with newsmakers (Iraqi politicians, US senators), entertainment figures (Bernardo Bertolluci, Phillip Seymour Hoffman, Ricky Gervais), and the everyday people affected by the news (an autoworker laid off at GM, a mother whose son was killed in Iraq).
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