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Stop Ignoring Transparency Law, Grand Jury Warns San Diego

The land purchases prior to the construction of Petco Park are cloaked in Delaware LLCs — a mechanism for anonymity that wouldn't work if Section 225 were enforced.
Megan Wood
The land purchases prior to the construction of Petco Park are cloaked in Delaware LLCs — a mechanism for anonymity that wouldn't work if Section 225 were enforced.

The San Diego County grand jury urged city officials Thursday to move forward “with haste” in enforcing a long-ignored transparency law that requires companies doing business with the city to provide details about the financial interests behind the transactions.

The grand jury report, also concludes that the San Diego City Council “has been remiss” in not following the advice of three consecutive city attorneys, who recommended how the law should be enforced.

The report comes eight months after inewsource first reported that the law — known as Section 225 of the city charter — had not been followed, despite a mandate from 86 percent of voters in 1992.


Essentially, without enforcement of the law, the city does not know who it is doing business with. To that point, the grand jury wrote, “The citizens of San Diego deserve to have the transparency in city contracts that was the law’s intent 24 years ago.”

inewsource investigated the city’s failure to enforce the law last August, and has been reporting on it ever since. The stories prompted then-City Attorney Jan Goldsmith and several city council members to act.

It’s been a slow-moving process. The grand jury report released Thursday recommends the City Council collaborate with the Mayor’s Office, Independent Budget Analyst and other city departments to “either amend the municipal code to enforce the transparency law or place a measure on the 2018 ballot to amend charter section 225” by July 12, 2017.

“The grand jury encourages the Mayor’s office to complete the task with great urgency. Voters decided this issue more than 24 years ago, and enforcement is long overdue,” the report said.

Jackie Landis, one of the grand jury members, told inewsource by phone, “It was beyond surprise — it was shocking — that the law had been on the books for so many years, and the city was doing nothing to enforce it.”

“At the very beginning of our research we uncovered your article and it was a key element, and we’re very grateful for that, so thank you.”

– Jackie Landis
“I got the sense that this is an issue that, unless public attention is kept squarely on it, will disappear again,” she said.

Though a grand jury report does not legally require anything other than a response, Landis said, its intent is to bring issues into the spotlight and convince the government that “they need to act.”

“There doesn’t seem to be an urgency to push it forward unless there is pressure from an outside source.”

Why this matters

Voters passed the law — called Mandatory Disclosure of Business Interests — in 1992 after San Diego almost entered into a real estate deal with an alleged mobster. The policy requires every company doing business with the city to disclose the name and identity of everyone involved in the transaction — whether directly or indirectly — along with the “precise nature” of those interests.

inewsource’s investigation — confirmed by Thursday’s report — found that despite that law, as of April 13, 2017, the city has more than $3 billion in contracts with more than 1,000 private companies, yet rarely knows the financial interests behind them.

“It’s common sense and good business to want to know who you’re doing business with,” Councilwoman Barbara Bry told inewsource in March. Bry, who represents District 1, said she was surprised to learn the city was not already asking for this level of disclosure when she assumed office.

Three separate city attorneys, and now the grand jury, have recommended the City Council address the problem of the law’s “overly broad language,” which renders it “largely unenforceable,” according to the report.

The grand jury reported that city officials said enforcement of 225 might be hampered by staff or budget limitations.

“The grand jury does not believe that enforcement of this law is optional, nor should it be postponed or sidelined by lack of staffing or budget,” the report said.

Jurors have been assured that “the mayor’s office is diligently working on the process of putting the pieces of the puzzle together, whether the result is an ordinance to amend the Municipal Code or a ballot measure to amend the City Charter.”

The topic is scheduled for discussion at a council rules committee meeting in June.