Controversies Pile Up in 3-Way Race for Mayor

The bitter race for San Diego mayor is chugging to conclusion amid a new controversy over the city’s pension woes and a surprisingly strong write-in bid.

Dogged by bad news throughout his reelection effort, Mayor Dick Murphy held a news conference this week to tout his administration’s success in plugging the city’s leaky sewer system. Within hours, the main sewage plant at Point Loma spewed 2.2 million gallons of offal into the ocean, fouling surfing areas and closing beaches.

And just as the fallout from the pension controversy appeared to be settling, a new round of disclosures suggested undue secrecy and possible criminality by city bureaucrats on Murphy’s watch.

“In politics, you just can’t control what everybody does,” Murphy said. “It’s difficult to control your own destiny.”

Meanwhile, San Diego County Supervisor Ron Roberts upped his attacks on the incumbent, using words like “cover-up” and “corruption.”

And Councilwoman Donna Frye, a late write-in candidate, picked up support from labor unions and the Sierra Club, leading some polls to suggest a tight three-way race.

“This race has that special San Diego cachet: It’s totally unpredictable,” said political consultant Bob Glaser, who is not affiliated with any of the candidates.

The campaign’s dominant issue has been the $2-billion deficit in the city’s pension fund, caused by a funding scheme that depended on a bullish stock market.

When the dot-com bubble burst and the market crashed, the City Council opted not to increase its contribution to the pension fund, which would have meant cutting municipal services.

To make matters worse, the city omitted the pension deficit from information submitted to Wall Street in advance of bond sales.

That omission was followed by the resignations of the city manager and city auditor and the launching of investigations by the Securities and Exchange Commission and the U.S. attorney’s office. The investigations are still unfinished.

The pension fund issue has turned what might have been an easy reelection for Murphy, a former City Council member and Superior Court judge, into a run for his political life.

Roberts, who has lost two previous bids for mayor, has been unrelenting in his criticism that Murphy was slow to realize the scale of the pension problem and ineffectual in his efforts to fix it.

In September, Murphy’s double-digit lead evaporated. But in the last week some polls suggested that Murphy’s counteroffensive -- including TV commercials noting that the county government has a pension problem of its own -- had blunted Roberts’ attacks.

Murphy loyalists believe his earnest, turn-the-other-cheek persona is more attractive to voters than Roberts’ more combative temperament.

An official with the local firefighters association, endorsing Murphy, quipped at a news conference this week that Roberts should take advantage of anger-management classes.

On Wednesday, the campaign got another jolt when the accounting firm hired by the city to audit its books balked at continuing its work until questions of possible criminality had been resolved.

The accounting firm of KPMG has been under fire in recent years by the Internal Revenue Service, the federal Department of Justice, the SEC, con- gressional investigators and litigators for shareholder groups for allegedly ignoring the problems of its auditing clients.

Two weeks ago, KPMG and a Belgian affiliate agreed to pay $115 million to settle a shareholder lawsuit over its audit of a software company. And days later, it agreed to pay $10 million to settle SEC charges of improper conduct in its audit of Gemstar-TV Guide.

San Diego officials had hoped a KPMG audit would help the city win back the affection of bond rating analysts so the city could resume selling bonds and refinance Petco Park, the new Padres ballpark.

Instead, KPMG’s decision to halt its audit stirred up the mayoral contest, as the San Diego Union-Tribune said in a front page story, “like a rock slamming into a hornet’s nest.”

Part of the controversy is the allegation that city officials, including the mayor, kept quiet about the impasse with KPMG until the auditing firm’s letters were leaked to the media.