Eager to reenter the bond market, San Diego, sanctioned by the U.S. Securities and Exchange Commission in November for committing the biggest municipal securities fraud in U.S. history, says its finances are mending. Just don’t tell that to City Attorney Michael Aguirre. “It’s all just political spin,” he insists. Mayor Jerry Sanders says the city — which failed to disclose deteriorating pension and retiree health care deficits in 2002 and 2003 bond offerings — is now fully funding retirement and health care obligations and has money left over for long-neglected infrastructure projects. Aguirre concedes progress, noting the December ruling by the Internal Revenue Service that two of the city’s pension benefits are unlawful. But he continues to pursue a lawsuit, now in the appellate court, to roll back benefits worth some $1 billion. “We really need to get rid of benefits that weren’t paid for,” he says. “I don’t want to be the city attorney when everybody borrows money and it blows up.”
