Officials Await Special Report on Sex Scandal : City Hall: They are looking for answers about the secret $100,000 settlement in a sex harassment claim, but also fear the inquiry will open a Pandora’s box.

Although Monday’s hearing on the San Diego City Hall sex-and-moneyscandal that cost taxpayers $100,000 and the city’s former planning director his job has been billed as the incident’s definitive chapter, there is a growing belief among council members that it could expand, rather than conclude, the controversy.

At Monday’s meeting, special counsel Josiah Neeper, appointed by the council last week to investigate the matter, is scheduled to present the findings of his probe into the secret $100,000 settlement awarded to a former city planner who filed a sexual harassment claim against the city following an affair with former Planning Director Robert Spaulding.

“Mr. Neeper is going to lay the story out from A to Z,” Mayor Maureen O’Connor said. “His report should answer the question, ‘What did they know and when did they know it?’ ”

In answering that critical question, however, Neeper could open up other potentially embarrassing queries about how and why former City Manager John Lockwood, City. Atty. John Witt and other top city administrators settled former planner Susan M. Bray’s claim without informing the council.

“I don’t think it will be the end--I think it will take a little longer,” said Councilwoman Abbe Wolfsheimer. “I don’t have answers. I have questions.”

It perhaps should come as no surprise that an issue founded on titillating details of sex, money and secret deals should spawn even more tantalizing rumors and guesswork inside and outside City Hall.

For that reason alone, a number of top city officials are eager to put what one termed the “Peyton Place in Planning” quickly behind them.

Why were Lockwood, Witt and others so protective of Spaulding, who--after only three years at City Hall--could hardly be considered a part of their old-boys’ network? Was their secrecy intended to cover up potentially damaging information about other city officials, or were they more concerned about Bray’s purported fragile psyche? What made those who oversaw the $100,000 settlement so certain that Bray had a winnable case that they were unwilling to risk a lawsuit? Have there been other similar secret deals?

Those questions and others have buzzed among council members and city bureaucrats since the scandal broke 10 days ago, and few expect all of the answers to come Monday.

Indeed, while Neeper’s report is expected to provide the most complete chronology to date of who knew what and when about the secret settlement, council members doubt that it will fully quell their concerns both about the Spaulding-Bray affair itself and how similar incidents could be prevented in the future.

“I think it (the full story) may come out as a result of (Neeper’s) activities, but it may come out indirectly as a result of his activities,” Councilman Ron Roberts said. “I do not expect his work will be complete on Monday.”

Adding to the perception that the full story may not be known immediately is the fact that the council is expected to discuss the case in private either before or after Monday’s public session. For the sake of appearances, if nothing else, many city officials had hoped to avoid that scenario, because, as O’Connor herself emphasized last week: “Enough’s been decided behind closed doors already.”

However, after interviewing about two dozen people involved in the case or its political fallout, Neeper said that his “premonition is that it will be necessary to have an extended (closed) session.” A separate closed session, for the purpose of naming a successor to Spaulding, who resigned under pressure last week, has already been scheduled for Monday.

Witt, one of those hoping for a rapid resolution, noted that city officials “plan to do this publicly, to the extent possible.” But the threat of potential lawsuits by Bray or Spaulding, he added, could necessitate closed-door talks--even at the risk, he acknowledged, of possibly fostering the impression that the public will receive only a sanitized version of the real story.

Speculation about the scintillating possibilities of Neeper’s report, however, may well exceed its content, council members and other city officials believe. Rather than providing any startling bombshells or harsh denunciations, they suggest, it is more likely to simply fill in some of the missing procedural details about the controversy and offer suggestions on avoiding its repeat.

“If he feels, for instance, we’ve breached some perceived ethical standard by not informing the City Council, I’ll accept that,” Witt said.

And what would that mean? Witt was asked.

“It means we don’t do it again,” Witt responded.

It remains unclear whether Monday’s hearing will see Neeper simply narrate his findings, or whether any of the principals will be asked--or ask themselves--to offer personal explanations to the council, either in public or private. The meeting’s format, Neeper said late last week, “depends on the information I develop.”

“Getting all of the facts out on the table is the first step,” O’Connor said. “Where we go from there depends on what Mr. Neeper finds and recommends.”

One of the focal points of Neeper’s review is whether Lockwood, Witt or others violated the City Charter in keeping the council in the dark about the settlement by circumventing a city policy requiring the city manager to seek council approval of expenditures of more than $20,000. By deciding to pay former planner Bray $19,995, with nearly $80,000 to be paid over the next three years, Lockwood stayed below that threshold.

Even if the circuitous use of the $20,000-and-under provision is dismissed as merely questionable judgment, not an illegal action, O’Connor and other council members argued that it underlines the need to tighten the guidelines governing it in order to ensure that it is not utilized to shield sensitive issues from the council.

“The reason behind the policy--and it’s a good one--is so the manager doesn’t have to run to the council on every little routine thing that comes along,” O’Connor explained. “But this wasn’t little and it certainly wasn’t routine. We need to find a way to allow the manager the freedom he needs while making sure the policy isn’t abused to keep things from the council.”

In explaining why he chose to keep the deal secret, Lockwood has said that he was motivated partly by a desire to protect Spaulding’s wife and children--and the city itself--from a public embarrassment.

Both the former city manager, who approved the deal shortly before retiring in March and accepting a top position in Gov. Pete Wilson’s administration, and Witt also have argued that they felt that the $100,000 settlement protected the city against a potential million-dollar liability in the event that Bray’s complaint went to trial.

Council members, however, not only question that explanation--”It just smells like a smoke screen,” one said--but hasten to add that, even if those professed concerns were valid, the council still should have been involved in any decision of such import.

“Isn’t a settlement decided upon by the City Council in the best interest of the citizens, instead of one that’s kept under wraps?” Wolfsheimer asked rhetorically.

That question, in turn, raises another major query in the mind of Wolfsheimer and others.

“I want to know why Mr. Lockwood and Mr. Witt were so intent on covering Mr. Spaulding’s behind,” the councilwoman added. “I don’t know why.”

By heightening awareness about the impropriety of department heads’ romantic liaisons with subordinates and about sexual harassment itself, the incident also could prompt, if not a review of those policies, at least renewed focus on them and blunt reminders to city bureaucrats, officials said.

“You think people know these things, but if we have to make sure all the I ‘s are dotted and the T ‘s are crossed, we’ll do it,” O’Connor said. “But my, my, my, a lot of this is common sense.”

City policy, quoting from federal guidelines, defines sexual harassment as “an offensive working condition that will not be tolerated.” City personnel officials advise supervisors against affairs with subordinates because of problems that are likely to arise. However, under city policy, a relationship between a boss and his or her subordinate is not considered sexual harassment, if both parties engage in the affair willingly as consenting adults.

The city’s official policy, included in a memo sent to city department heads last December, states:

“Unwelcome sexual advances, requests for sexual favors, and other verbal and/or physical conduct of a sexual nature constitute sexual harassment when submission to such conduct is made either explicitly or implicitly a term or condition of an individual’s employment, submission to or rejection of such conduct by an individual is used as the basis for employment decisions affecting such individual, or such conduct has the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating, hostile or offensive working environment.”

“Is it time for a reminder?” O’Connor said. “This incident would certainly suggest it is.”

Another potential long-range consequence of the episode, O’Connor argues, could be stronger support from the public--and, perhaps more important, from her council colleagues--for her proposed package of ethical reforms and charter changes aimed at strengthening the mayor’s powers.

“This really highlights the differences between elected and non-elected officials, and where the lines should and shouldn’t be drawn,” O’Connor concluded. “It’s unfortunate that it takes something like this, but it’s a perfect example of why we need to shift a little more power to the elected side. This whole thing has been like a civics lesson. Let’s hope it doesn’t take another one to get something positive done.”

Times staff writer Nora Zamichow contributed to this story.