3 San Diego City Officials Quit After Deficit Furor

Three high-ranking city employees involved with controversial financial dealings that have left the city under investigation and with a pension deficit of nearly $2 billion have resigned, the city manager announced Monday.

City Manager P. Lamont Ewell said that Deputy City Manager Patricia Frazier, former Treasurer Mary Vattimo, and former human resources director Cathy Lexin have resigned to “pursue other professional interests.”

Through a spokesman, Ewell refused to say whether the resignations had been requested or whether they were part of the city’s effort to placate the Securities and Exchange Commission by firing employees involved in the controversy.

“I certainly thank them for their contribution to the city,” Ewell said in a statement. “I wish them success in whatever endeavors they embark upon.”

The SEC is investigating the city’s failure to disclose the growing deficit on a bond prospectus. Vattimo and Lexin had been reassigned to other duties during the investigation.

The U.S. attorney and county district attorney’s office are investigating related matters.

Vattimo and Lexin were among those individuals singled out by City Atty. Michael Aguirre for allegedly having a conflict of interest by sitting on the city’s pension board. Frazier’s conduct as deputy city manager for development services has also been criticized.

When the controversy erupted in early 2004, City Auditor Ed Ryan resigned. City Manager Michael Uberuaga was forced out by Mayor Dick Murphy. Murphy announced his own resignation last month, effective July 15, to give the city “a fresh start.”