Scandal Erupts at City Hall Over Payment : Cover-up: Former City Manager John Lockwood says he intentionally kept secret a $100,000 payment to a city employee who was reportedly involved with ex-city planning chief Robert Spaulding.

Former San Diego City Manager John Lockwood said Saturday that he deliberately kept secret a $100,000 payment to a city employee who had filed a complaint against her boss, the city planning director, with whom she had developed a personal relationship.

Planning chief Robert Spaulding resigned from his post under pressure Friday after word of the complaint and subsequent settlement leaked out, prompting Mayor Maureen O’Connor to demand his departure.

Word of the complaint against Spaulding and the $100,000 payment triggered outraged denunciations from O’Connor and fellow council members, who wondered aloud why they were kept in the dark about a settlement that has now escalated into a major City Hall scandal.

But Lockwood, who approved the payment just days before he left his post last March, said Saturday that he had made a deliberate decision to exclude the council and his assistants from considering the matter. He said he feared that “innocent people” could be harmed by the publicity that would result should word of the complaint and payment be disseminated.

“I intentionally wanted to keep it there in my office, because there was a possibility that it would become public information and become embarrassing,” said Lockwood, a 41-year-veteran of San Diego city government who now serves as director of general services for the state of California. “It was my judgment and mine alone.”

In fact, Lockwood said he had deliberately, and successfully, tried to keep the cash portion of the payment less than $20,000--the threshold amount above which the council must be informed. (The bulk of the settlement involves some $70,000 in deferred payments for long-term disability, officials said.)

Lockwood said there was nothing illegal or unethical about his actions, which he was careful to handle in accordance with established guidelines.

Lockwood explained his viewpoint to O’Connor in a private conversation Saturday and said he understood the anger of the mayor and fellow council members, who are expected to discuss the matter during a closed-door City Council session Monday.

“I tend to agree with her,” Lockwood said of the mayor’s statements that she and the City Council should have been informed. “At the same time, I’m a little reluctant to destroy families and kids.”

Informed of Lockwood’s statments, Paul Downey, the mayor’s press secretary, said that the issue still should have been placed before the city’s chief governing body and top elected official.

“Certainly his (Lockwood’s) intentions were noble, but the fact is that the mayor and the City Council should have been informed,” Downey said.

But Lockwood said the details would have emerged publicly if the matter had been brought before the City Council.

“I just wasn’t brought up by my parents to inflict cruel, harmful things on human beings,” said Lockwood, who has long been a close ally of O’Connor. “I know I can keep a secret.”

Council members have also criticized the office of City Atty. John Witt for not having informed them. But Witt’s chief deputy, Jack Katz, said Saturday that the city attorney’s major role was to approve the wording of documents in which the woman released future claims against the city. It was the role of City Manager Lockwood--not the city attorney--to decide who was to be informed, Katz said.

“It was decided by the manager that the thing would not be released except by those who were very closely involved,” Katz said. “That’s a policy call by the manager.”

That position was disputed by Councilman Bruce Henderson, who harshly criticized Witt for not having informed the council.

“To this moment I can’t imagine any reasons that the city attorney could possibly have had for not informing the council about it,” Henderson said. “I’m shocked.”

Henderson, like other council members, was informed of the matter by O’Connor on Friday afternoon. O’Connor herself only learned of the incident Friday after inquiries by reporters from the San Diego Union and Tribune prompted her to investigate, she said. She summoned city planning chief Spaulding to her office and later demanded his resignation, officials said.

Spaulding, who is reportedly married with four children, could not be reached for comment on Saturday. He earned slightly more than $100,000 as city planning director, a position he assumed in early 1988 after leaving a municipal post in Glendale, Ariz.

The planning chief is one of only a handful of department heads who report directly to the City Council, a fact that further angered council members.

Asked if the complaint had merit, Lockwood replied, “If I didn’t think it had some merit, we wouldn’t have paid a dime.”

According to Katz, Witt said at a press conference Saturday that the $100,000 settlement had saved the city money, as a lawsuit could have cost more than $1 million.

Details of the incident at the center of the dispute still remain murky. The identity of the woman, an employee of the planning department, has not been made public.

Lockwood said privacy considerations prevented him from disclosing the substance of the woman’s complaint, which was filed with city officials in late 1990. She is now on a “stress disability,” said mayoral spokesman Downey, but it is unclear whether she is still technically considered a city employee.

The woman had developed a “liaison” with Spaulding, Downey said, but other details about their relationship were not available.

City Councilman Ron Roberts said he understood the complaint may have involved an allegation of sexual harassment and that the two may have had “an affair,” but this could not be confirmed.

Lockwood said he reviewed the complaint for up to two months. Both city officials and attorneys representing the woman agreed to keep terms of the settlement confidential, Lockwood said.

Jack McGrory, who succeeded Lockwood as city manager and formerly served as his top aide, said Saturday that he knew of the woman’s complaint when it was filed, but was not involved with the matter afterwards. Lockwood assumed control of the issue, McGrory said.

“John (Lockwood) decided to take the case to himself, and told me he would handle it personally and I was not to be involved in it,” McGrory said. “I was told to stay out of it, and I did.”