Leaky San Diego: “America’s Finest City” Mirroring DC

San Diego, CALIF. – The eighth largest city in America is no stranger to political scandals.

From Enron by the Sea, to the sudden resignations of Mayors Dick Murphy and Bob Filner, the City of San Diego has not been deprived of shortcomings. And now, the place affectionately called America’s Finest City, has a new scandal brewing.

Not to be outdone by the constant flow of leaks in Washington, D.C., the city attorney of San Diego, Mara Elliott, in a memo released Thursday, is calling for the immediate resignation of the city employee(s) responsible for leaking a classified document related to a controversial development project, known as SoccerCity.

The proposed project has had a bumpy road in its bid to replace the Qualcomm stadium location where the NFL’s Chargers used to play.

In her memo Elliott wrote, “The 16-page memorandum analyzes the City’s position and risks as it negotiates the terms of the Qualcomm Stadium lease that would be required should the Soccer City initiative pass.”

She continued:

“The person or persons who gave this confidential legal analysis to FS Investors did more than commit a crime. They betrayed the taxpayers of San Diego. Given this egregious breach of public trust, I further expect that the person or persons responsible will step forward, identify themselves, and resign their positions with the City.”

How Nick Stone of FS Investors, the hedge fund behind the SoccerCity initiative, came into possession of the document is the issue.

Elliott has asked Stone, through his attorney Christopher Garrett of Latham & Watkins LLP, to explain how the confidential language reached his hands.

In an interview with KPBS Stone said, “The document did not come to me from a city employee. Had I been aware that the memo was not intended to be made public, I would not have shared it with my attorney — and he certainly would not have referenced it in a public letter.” Stone continued, “In our minds, this memo was consistent with an earlier public memo about the initiative from the City Attorney’s office that was sent to the media even before it was released to the client, the City Council and the mayor.”

The person or persons who gave this confidential legal analysis to FS Investors did more than commit a crime. They betrayed the taxpayers of San Diego.
San Diego City Attorney Mara Elliott

Garrett has taken to the airwaves to defend his position. In a tv interview, Garrett seemed unaware of the confidential status of the memo:

“I was quite shocked to find out that that memo was something that she considered to be confidential, it’s quoted in my letter and everything else,” said Garrett

He continued, “[The memo] was floating around the council chambers, I thought everybody had it on Monday, and when I spoke to the council about it I thought they knew I had the memo.”

Garrett’s position does seem a bit odd because the document was marked confidential with a disclaimer right on the cover.

According to Elliott, Mayor Kevin Faulconer and City Council members requested the analysis so they could best protect the public’s interest in their dealings with FS Investors. She states that nearly a dozen attorneys in her office devoted hundreds of hours to researching and preparing the memorandum.

With history as our guide, this new San Diego scandal will no doubt have many twists and turns.