San Diego contracts, business deals closer to transparency
As detailed in a recent inewsource investigation, backroom deals have been a staple in San Diego for decades. Section 225 could force disclosure of hidden interests in billions of dollars of business with the city. Art by Ben Chlapek for inewsource.

San Diego contracts, business deals closer to transparency

We’re one step closer to a more transparent San Diego.

The City Council and Mayor’s Office are working to fix a vague but important law meant to make business between local government and private companies more transparent. The move comes after a series of inewsource investigative reports that found the city has more than $3 billion in contracts with more than 1,000 private companies, yet rarely knows the financial interests behind them.

Illustration by artist Ben Chlapek for inewsource.

Read inewsource‘s original investigation into Section 225 from August 2016.

This is despite a law, overwhelmingly approved by voters more than 25 years ago, that mandates every company transacting with the city disclose the name and identity of everyone involved in the transaction – whether directly or indirectly – along with the “precise nature” of those interests.

On Monday, the City Council approved a response to a San Diego County grand jury report that identified deficiencies in how the law was (and was not) being followed. A new ordinance will address those findings and be ready for the City Council Rules Committee to examine at their November 1 meeting.

“If you want to know why people really are so cynical about their government and about their elected officials, look at this right here,” said Martha Sullivan, who spoke to the council before the vote.

“The voters passed this change to hold the city accountable … And the city has willfully refused to honor the voters’ will,” Sullivan said.

The law is known as “Mandatory Disclosure of Business Interests,” or Section 225 of the San Diego City Charter. It came about after the city almost entered into a $47-million real estate deal with an alleged mobster.

READ: “An offer to refuse” from inewsource’s original investigation

In the meantime, Mayor Kevin Faulconer has directed all mayoral departments to comply in part with the law by following a similar rule set down by the federal Securities and Exchange Commission.

The council still anticipates putting a charter amendment before voters in November 2018 to clarify the language within Section 225, or repeal it. As the current council and three former city attorneys have pointed out, the law as written is largely unenforceable due to its vague wording and subjective interpretation.

The grand jury’s report from April urged officials to act “with haste” in enforcing Section 225 and said the City Council “has been remiss” in not following the advice of the three city attorneys who recommended council members fix the law’s wording to make it enforceable.

The council partially disagreed with that finding, saying: “While the City does not collect all information required under Charter section 225, it does collect some.”

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Councilwoman Barbara Bry said Monday she is “very committed to making sure we move ahead with this – both in terms of addressing the short-term and a long-term solution.”

Council members Chris Ward, Scott Sherman and Georgette Gomez also spoke in favor of fixing the law.

“At the end of the day, transparency is what we need most in government at this time,” Sherman said.

To determine why the law was never enforced, inewsource previously reached out to several people involved in its creation and enforcement.

Former Councilman Bruce Henderson helped spearhead the ballot initiative that eventually earned more than 86 percent voter approval in 1992. He told inewsource it was mind-boggling that elected officials wouldn’t want to know who they are doing business with.

“The word corruption comes to mind,” Henderson said. “That’s the only thing that I can think of that would cause people not to want to know that information.”

Former City Attorney Michael Aguirre wrote a detailed report to the council in 2005 noting a lack of uniformity and guidance with Section 225. Aguirre, a known firebrand in the city with strong beliefs regarding transparency and government accountability, echoed Henderson.

“Secrecy and concealment are the mode and method of doing business in San Diego,” Aguirre told inewsource. “It’s buzzkill if you show up and say, ‘Let’s drill down and find out who everybody is.’”

Disclaimer: Barbara Bry was an inewsource donor prior to taking office.

More in the series …


Chlapek-Main-Section225
Long-ignored transparency law would reveal who’s doing billions in business with San Diego
August 2, 2016
A law that’s been on the books since 1992 can help reveal the people behind the companies doing billions of dollars in business with the city each year — if someone would only enforce the thing.

Section 225
Fix proposed for San Diego's ignored transparency law
Oct. 22, 2016
After an inewsource investigation found San Diego’s transparency lacking, the City Attorney has recommended a new law to ensure all business is done in the open.

Chlapek money
City Attorney’s Office will weigh in (again) on San Diego disclosure law
Aug. 5, 2016
City Attorney Jan Goldsmith told inewsource his office will basically reiterate its predecessors. This will be the fourth time the office has weighed in on Section 225 since its inception.

Petco Park
Financial interests behind San Diego deals worth billions still undisclosed
March 13, 2017
Despite overwhelming voter approval in 1992, three separate city attorney recommendations and an inewsource investigation, the city of San Diego is still not following a law mandating government transparency.

Rolls Royce
Stop ignoring transparency law, Grand Jury warns San Diego
April 13, 2017
The San Diego County Grand Jury issued a report on the long-ignored transparency law, called Section 225, that's been the subject of inewsource scrutiny.

Chlapek Delaware
Fix to San Diego’s long-ignored transparency law to go on November 2018 ballot
June 9, 2017
San Diego's most-ignored law has a fix in site. In the meantime, the city is working on an ordinance to jumpstart the process.
shadow-ornament

We'll let you know when big things happen.

About Brad Racino:

Brad Racino is a senior reporter and assistant director at inewsource. To contact him with tips, suggestions or corrections, please email bradracino at inewsource dot org.
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