Authorities Open Inquiry Over Bond Sale

From Times Staff Reports

Federal authorities have begun an inquiry into whether the city filed misleading financial statements in connection with the sale of sewer bonds, Mayor Dick Murphy confirmed Saturday.

Murphy pledged “full cooperation” with the inquiry, which involves the U.S. attorney’s office, the FBI and the Securities and Exchange Commission. Investigators have asked for documents dating to 1996, he said.

The controversy involves whether the city has broken any laws by failing to alert the bond market about the unfunded liability of the city pension fund.