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The Wrath of Aguirre

By Megan Kinneyn | Apr. 2, 2007

Law Office Management

Apr. 2, 2007

The Wrath of Aguirre

In 2004 the voters of San Diego, fed up with a dysfunctional, nearly bankrupt city goverment, elected a city attorney who promised to shake things up. Mike Aguirre has been true to his word. By Ron Donoho

By Ron Donoho
      San Diego needed to act fast to avoid a meltdown. But does it need a city attorney as impolitic as Mike Aguirre?
      In Mike Aguirre's all-or-nothing world, it's nosurprise that 100-percent change is the goal. Cleaning house was the task San Diego's crusading and polarizing city attorney set for himself. Elected in 2004, Aguirre vowed to clean up a political system that had become so dysfunctional, the New York Times actually alluded to the city as "a kind of Enron-by-the-Sea." At the time, San Diego owed $1.4 billion to its city pension system and showed little sign of being able to shrink that debt. Moreover, the city had been the target of an SEC investigation, hadn't completed a financial audit since 2002, and was frozen out of the bond market.
      Claiming to be the people's attorney?and not a rubber stamp for the politicians?Aguirre felt that many of the 130 or so civil and criminal attorneys he inherited when he took office were entrenched in a culture that conditioned them to perpetuate the will of the mayor and the city council.
      "Yes, my goal was a complete turnaround," he acknowledges. "It was like the office didn't exist for the public. I decided we could change either the people [in the office] or the attitude, and unfortunately the attitude change proved to be very difficult. Some people did come around. But a lot [about half] went out the door."
      Not all of them, however, went quietly. In fact, two of the top deputies Aguirre dismissed filed a lawsuit charging several claims of retaliation and a violation of their right of association. One of them, Jim Chapin, alleges that Aguirre fired him because he refused to pressure his wife, Lori Chapin, into leaving her job as general counsel for the city's pension system. The other, Penny Castleman, claims Aguirre operated by a reign of terror, belittling staff and using vulgarity to demean his minions. Although the other three claims in the suit were dismissed, the claim that Aguirre retaliated against Chapin and Castleman for joining and participating in a labor union still remains.
      Aguirre denies he treated anyone unfairly. "I gave everybody a fair opportunity when I came in," he maintains. "A number of people couldn't make the change." So they had to go.
      Now more than two years into his administration, Aguirre still calls press conferences at least once a week to respond to critics, sometimes even summoning the media twice a day. To maintain his connection with the voters, he also does something that none of his predecessors ever did: He blogs.
      At the bottom of the city attorney's office website (www.sandiego. gov/cityattorney) there's a link to "The Aguirre Report Web Log (Blog)," which Aguirre considers part of his continuing effort "to make government transparent and provide access to all citizens to what's REALLY going on at City Hall."
      Maybe so, but his blog entries also betray a certain obsession with the San Diego Union-Tribune, which he believes has turned against him. As his very first blog entry, posted on August 16, 2006, reads: "The real question is, why is the U-T devoting hundreds of inches of copy in their newspaper to discredit me. They endorsed me in my campaign and I'm delivering as promised to the citizens of San Diego?seek out wrong, expose it, and litigate it. We do that on a daily basis in the city attorney's office and the U-T raising concerns about my management style isn't going to stop us."
      A lifelong San Diegan, the 57-year-old Aguirre is unusually bulky for a marathon aficionado. He's run 21 of them?including all 11 San Diego Rock 'n' Roll marathons. A graduate of Arizona State University, he got his law degree from UC Berkeley's Boalt Hall School of Law. The divorced father of two grown children, Aguirre also holds a master's degree in public administration from Harvard. He started his career as a federal prosecutor, then worked for two years as assistant counsel to the U.S. Senate's permanent subcommittee on investigations, probing organized crime and pension racketeering before going into private practice. In the 1980s and '90s he recovered more than $250 million for clients victimized by pension and stock fraud.
      Even before he assumed the responsibilities of his current job, Aguirre was well known around town as a gadfly. In late 1996, for example, he was on the front lines of a media battle against a controversial arrangement that the city had with its football team, the San Diego Chargers, to guarantee a paid attendance of 60,000 at every home game. That wouldn't have been a big deal in, say, Green Bay or Pittsburgh, but San Diego sports fans can be rather fickle. The agreement went through, however, and over seven years it cost the city millions of dollars that could have gone into its general fund. Today, the ticket guarantee is no longer in effect, though some observers say the Chargers' 2004 renegotiated stadium lease is hardly an improvement. For Aguirre, it served as a harbinger of future battles.
      As even his detractors acknowledge, Aguirre is extremely bright. He's the sort of guy who can follow three trains of thought at once with no apparent effort. But his political career didn't exactly get off to a rip-roaring start. In fact, he lost the first four elections he ran in?one for Congress, two for city council, and one for district attorney?before winning the race for city attorney by less than a percentage point. "In many ways," he says, "my campaign for this office started 25 years ago. I've tasted humble pie many times."
      However many pies he's tasted, though, humble is not an adjective that's often applied to him. Some see him as an articulate watchdog for the public. Others, like Leslie Devaney, the woman Aguirre beat to become city attorney, see him as both a grandstander and a loose cannon.
      "I believe it's dangerous for city attorneys to draw attention to themselves or their positions, other than really focusing on doing good legal work," says Devaney, who had served as second-in-command under the preceding city attorney, Casey Gwinn. "You shouldn't look at someone and say, 'You're crazy. It's a terrible idea. I'm going to sue you.' You immediately polarize people from wanting to come to the table to problem solve."
      Aguirre, of course, has heard it all before, and he dismisses much of it as sour grapes. He also insists that to be a leader you sometimes have to make waves. "This is the dilemma in San Diego," he says. "On the one hand, people say, 'Well, where's the leadership?' And then someone tries to show leadership and people say, 'You're a lightning rod. You're a gadfly.'
      "If you stand up and sincerely try to do the right thing," he continues, "you're going to take some flak. But you're also going to win over some people."
      Still, at this point there's very little evidence to suggest that San Diego's city council is succumbing to his charms. Council President Scott Peters has been most critical. He has reportedly accused Aguirre of driving talented people from his office and wasting taxpayer money investigating matters already being handled by other county and federal bodies.
      But the city council, of course, has its own image problems. In fact, by the time Aguirre was elected in 2004, councilmembers were feeling the heat of an SEC investigation. Ordinarily, the council would have gone to the city attorney for legal advice. But with Aguirre in that job, the council felt obliged to also hire an outside attorney. Then, in 2006, Kroll, a private risk-management company retained by city officials to satisfy outside auditors, produced a report that Aguirre viewed as something of a whitewash: It concluded that five sitting councilmembers had been merely "negligent" when they allowed pension funding to drop to unacceptable levels. In Aguirre's mind, what was really going on was securities fraud.
      That same year, Aguirre and outside counsel managed to broker a settlement between the SEC and the city of San Diego. The SEC found that the city had indeed violated antifraud provisions of federal securities laws by failing to disclose its huge pension debt in 2002 and 2003, and that it "knew or was reckless in not knowing that its disclosures were materially misleading." In response, the city neither admitted nor denied any wrongdoing but agreed to "cease and desist from future securities fraud violations." It also agreed to hire an independent consultant to review the city's policies and make recommendations to assure compliance with its disclosure obligations.
      The settlement was something of a coup for Aguirre. While it allowed the city to move forward, politicians and other individuals whose behavior had been called into question still faced continuing investigations.
      John Hartigan, a former SEC attorney now with Morgan, Lewis & Bockius of Los Angeles, was hired by the city of San Diego to work on the settlement with Aguirre.
      "We had a collegial and professional relationship," Hartigan says. "He has strong opinions and viewpoints. But he always listened to my viewpoints, and sometimes deferred to them.
      "The city's settlement does validate Aguirre's strategy," he adds.
      Like Hartigan, Rupert Linley had a relationship with Aguirre that was cordial?at least at first. Linley worked in the criminal division of the district attorney's office for 33 years and had just retired when Aguirre asked him to return to public service and head the criminal division of the city attorney's office. The two men had gotten to know each other during Aguirre's unsuccessful run for district attorney.
      Linley says he planned to work for only another year or so to help reorganize the city attorney's office, then step aside. As his second-in-command he hired Andrea Freshwater, who had 15 years' experience in the DA's office. He also hired Tom Basinski, who'd been a DA investigator for 17 years, to serve essentially as Aguirre's bodyguard, in addition to conducting public-integrity investigations. (Aguirre had asked San Diego's chief of police for an escort but was turned down.)
      "For about six months, as long as he left us alone to do our jobs, everything was fine," Linley remembers. "The problem was that Mike wanted us involved in his crusade against the mayor and the city council. He wanted us to prosecute them [for the pension underfunding]. I told him I didn't think that was something that could happen.
      "He started getting more and more frustrated?and more obnoxious. I really find him paranoid and bipolar. He gets to the point where he loses the ability to think rationally. He certainly caused damage to our friendship?well, he destroyed it, actually."
      The breaking point came during a chauffeured car ride on the way to a luncheon. Traveling down picturesque Route 163 in downtown San Diego, Linley says, Aguirre ratcheted up the browbeating and refused to relent.
      "We were talking about the district attorney [Bonnie Dumanis]. She had just tried a power play, where she wanted to take over criminal misdemeanors in the city. It couldn't happen, and it was a bad idea. The city manager was going to write the report on this, but Mike wanted to write it. Then Mike had this deluded idea that Andrea Freshwater and I were conspiring to help Bonnie. Mike was ranting at me about that."
      About a mile into the drive, Linley had the driver pull over and then got out of the car. He walked all the way back to his office, skipping the lunch altogether. Within a few weeks, Linley was fired and Freshwater resigned.
      Basinski, a longtime friend of Linley's, tendered his resignation as well, then wrote a tell-all article about his experiences as Aguirre's bodyguard, entitled "Mike Aguirre: Raging Bull," for San Diego Magazine.
      As Basinski recalls, "The day I left the city attorney's office, my wife and I both heaved a huge sigh of relief. I really think Mike has a delusional outlook on some things. He thought Rupe [Rupert Linley] didn't understand the direction the office was going, but that wasn't the case."
      In Basinski's opinion, Aguirre was abrasive and abusive with his subordinates as a matter of course. "Everyone was scared to death," Basinski says. "Our office doesn't have civil service protection?everyone is an at-will employee. People were scared for their jobs, especially the younger ones."
      For Aguirre, the bottom line is this: Desperate times call for desperate measures.
      "Everything in our city is on the line right now," he says. "This is a special situation, here in San Diego. This is the Mount Everest of problems. The city is disintegrating. We just don't have the proper levels of funding. And the city attorney's office used to help sweep things under the rug. The people in my office now have an appreciation of the city's current challenge. We're at a historic moment. The consequences of failure right now are dramatic."
      Indeed, with bankruptcy looming as a possibility, the city is still emptying its coffers faster than they can be refilled. The pension system continues to be underfunded, and the cost of deferred maintenance?on streets, sewers, and beaches?is rising. San Diego may have reached the half-billion-dollar mark just on deferred repairs for potholes, storm drains, and the like.
      But Aguirre insists his reign is now entering a quieter phase. "I adopted the style necessary for the situation," he says. "Now that my office is better organized, I've transitioned into a different style. If you've ever seen me in court, you know I'm not a bombastic person. ...We've created forward momentum. We've gotten to the next stage effectively."
      And yet Aguirre admits there are departments?especially the group working on the pension underfunding problem?that still have to work 24/7 whenever necessary.
      "Yes, evenings and weekends," he says. "We're trying to rebuild municipal government here. And at the end of the day, you're happy to go home and have your head hit the pillow."
      Mark Blake is part of Aguirre's new guard. A chief deputy and public finance securities and disclosure section chief, Blake has put in many a weekend to help Aguirre draft the city's SEC settlement proposal, among other things. Blake held essentially the same position for three years in San Francisco before coming to San Diego. Prior to that, he worked for the Metropolitan Water District of Southern California in Los Angeles as deputy general counsel.
      He applied to work in San Diego after reading a want ad. "I saw a challenge in being involved with a distressed entity," he says. "I didn't know Mike at the time. Yes, people said I might not want to work for him, that he'd be a difficult boss. Yes, he's a hard charger. I think you need people who challenge, and speak up, though. And I have no illusion that Mike might disagree with me someday and say, 'You know what, see you later, pal.' "
      But "pound for pound," Blake insists, this city attorney is giving the citizens of San Diego their money's worth. "We're definitely running on a private-sector schedule. I have heard others in the office say, 'If we're going to be working this hard, I might as well go back into the private sector.' "
      Blake witnessed firsthand the mass firings and resignations that occurred when Aguirre took office, and he readily acknowledges that the decision to transform a department as thoroughly as Aguirre has shouldn't be made lightly. "You shouldn't do it just because you want to do it," he says. "But Mike thought a changing of the guard was necessary. And, certainly, every elected official should get the chance to surround themselves with their own appointees."
      With Aguirre's recruits now in place, the line coming out of the city attorney's office is that it's eager to fight government corruption. "There are definitely people [on staff] who are crusaders?and they see Mike as a passionate fighter," says Blake.
      "The frustrating part of the challenge is that the problem is institutional. So, in many respects, Mike is stepping into a vacuum that's not being occupied by others in government. Where others defer on financial issues, Mike stands up and says, 'Hey, we've got issues here.' "
      Of course, not everyone sees Aguirre this way. But no one can deny that he's a force to be reckoned with. And his apparent popularity with the voters is putting San Diego's politicians on edge. Will he really become more conciliatory over time? At the very least, Aguirre insists, he's going to make a good-faith effort. In fact, he recently quipped that one of his New Year's resolutions was to read one of the 277 copies of How to Win Friends and Influence People that had been sent to his office.
      Ron Donoho ( is the executive editor of San Diego Magazine.

Megan Kinneyn

Daily Journal Staff Writer

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