Roundtable Looks At Sempra Vs. Azano, SDPD Pay Raises, Wacky Waterfront Projects

I am Mark Sauer the KPBS roundtable starts now. Welcome to our discussion of some of the week's top stories. I am Mark Sauer. Joining me at the KPBS roundtable today is Scott Lewis CEO of -- the voice of San Diego. Hello Scott. Hello. And reporter Karen Centro. And Dave Roland editor of Senegal city be. Hello Dave. Hello Mark. Today we have two tales with intrigue the first one is a Mexican businessman Jose Azano , the feds indicted him a year ago for a legally donating to the campaigns of 1024, 1035, and Maureen degree. The second one is semper based San Diego energy [Indiscernible] the rights to billion-dollar liquefied gas plant in Baja California it turns out these two stories are actually one-story. Scott tell us why you folks decided to tackle this in the three parsers and look into all of this. We wanted to find out why. Particularly we discovered several months ago a meeting that occurred between the wealthy Mexican named [Indiscernible] and Sheriff will Gore. Also at the meeting was to Mystic -- district attorney Bonnie Dumanis . First we were thinking this guy is involved in Spyker, he deals with spy gear he deals with multinational agencies. The contracts. Maybe he is trying to sell our share of some of the stuff. So we kept looking and kept looking it turned out it was a much your story. When you start to pull the story back in, as have other journalists, you see this war that this guy had with semper energy. It goes back to the liquid natural gas plant in and Sonata. We spent a lot of time figuring out what is at the heart of that war, how did semper get that liquid natural gas facility and why did it end up manifesting itself in campaign involvement in San Diego politics. The answer is basically this was the last attack, his involvement in San Diego politics was his last desperate attack against his company that he had been warring with for several years. Let's talk about Azano a little bit. Where did he make his money? His father was a facilitator for big companies in Mexico. He dabbled in building homes we talked to some people whose homes have been built by his company and they were not happy and they -- love stuff like that. Then he said I will take over spy gear and it became basically a middleman between Israeli companies creating some of the really intriguing evasive spy gear, and the Mexican government. He ended up making hundreds of millions of dollars on some of these deals with the Mexican government. They were one step below some of the bigger stuff we have seen at the national security agency. That is how he made his money. He decided to invest in a claim that a rancher was making against Sempra energy as they return to build the liquid natural aspect. The rancher claim he stole his land. He wanted to invest in a lawsuit he said if you win this lawsuit I will get a portion of what you went. That is at the heart of this dispute. We will get more into that. Let's go to the other side of this. Sempra they are headquartered in San Diego per that they have take ambitions in Mexico. What is the L&G plant? For a long time there was a big race to get a plant on the West Coast to be nice if they could get natural gas to places like Asia and bringing in and type it off to United States. There was a race going on. Sempra was racing against another company called Marathon. It was a big story several years ago when the governor of Baja California condemned the land that Marathon had taken permit for their plants which basically meant that Sempra won that race . Sempra built its facility and dealt with problems. One thing it had to do was get Sonata to go along with it and it created a $7 million mitigation fund for and Sonata. This mitigation fund was used for Ensonata. Mitigation funds is a euphemism here to some people other people is a slush fund or bribe. It raise the concerns of the FBI. The FBI ended up interviewing Sempra about it a lot. They never found anything was wrong with that they decided that Sempra could investigate this and sells and when Sempra investigated it themselves, wouldn't you know it they came back and found they had not done anything wrong. That is a intriguing part of the series. How in the world is the FBI step back and say you guys go ahead and investigate you self tell us what you find. Does that smell little bit? First of all it is amazing reporting. This is a classic case if you pull a little string you have no idea what is on the other end that you will come across. You guys should be very proud. It is really good stuff. Like you, I am super intrigue by the fact that the feds basically said it sounds pretty on the up and up for Sempra They are confronting them they are sending them to the Secretary officials and FBI and then -- It is impressive. If you remember the city of San Diego had something similar. The city of San Diego was secured -- accuse of security fraud they were enforced by the FEC [Indiscernible] Secretary to visit pencils. They hired a company that we talk about in this roundtable a lot crawl in corporate a. We spent 20 many dollars as the city and that report was supposed to be the SEC's investigation. It is not unprecedented for the sort of thing they were stretched thin and this approved was you didn't do it. I was going to ask how do they go about investigating themselves what was the process they followed? How transparent was that process? Did [Indiscernible] do we really know what they did? I'm not sure to -- I'm qualified to answer the question. They got a letter saying it was cool. You mentioned earlier the competitor marathon that is a French-based energy giant and they were beating head-to-head with Sempra over the rights to get this coastal plants built. They were always be upset. So they got their own investigation going. We were upset and they hired her own company called into for they come out with their own damning conclusions why Sempra won that race. Obviously they relied on anonymous sources that we never even found. We did our best to try to unravel the story and we ended up as far as we thought we could go. What's basically happen is not only did Sempra convince the FBI to stop looking at it and let them do that, they also convince the FBI and the DOJ to investigate this other guy saying he is your real problem. One of the things that caught our eye in this investigation is when you start to pull that up you start to see in the Mexican president in Mexico City there was a lot of talk about one thing in particular that this guy, this guy above all other threats to the US Mexican relations, this guy was being held up in DC and in Mexico City as a single biggest threat to the two countries relationship. When we see this we were like what is going on? What is the deal? We talked to some former ambassadors and Sempra was so worried as upset about this guy they were able to direct a lot of attention to him. Then he made a mistake. He was stupid -- He must be desperate you looking for some alleys -- allies. You have this big giant FBI switched around on Sempra So it all falls in place while he was trying to meet with [Indiscernible]. It was him because he tried to sell spy gear it is that Bill Gore was head of the FBI incidental and he might help swing things the other way. Then he met with Juan Vargas he helped fund Juan Vargas's campaign you talk to him and ask them what they talked about, it was Sempra I was going to ask I'm not ready to let the feds -- eating back to the feds, it is not just the FBI it is the US attorney's office the Department of Justice. Have you looked into relationships between Sempra officials and high-level DOJ officials or even local US Atty. office officials? We did not find anything. We continue to ask questions. There is another intriguing aspect which is Lord Duffy the US attorney for San Diego. She recused herself from this case and nobody has found out why yet. She was a public supporter of Bonnie Dumanis so she has that entangled. Until we can find that out we will keep asking questions. Again at the heart of this was his war between this company a very wealthy Mexican and it ended up playing out in our own home. We were talking before we went on the air you come away from this and you hold your nose, it is the) story because he looks worse in this. Semper -- Sempra or [Indiscernible]. There is evidence that this thy Azano got money to the mayor of Ensonata which got the mayor of Ensonata to get the police to [Indiscernible] if guns go off and there is liquid natural gas that is that. Then the Army goes in and kick the police are. This is stuff we heard about but to hear it or see it in one narrative it was fascinating. You also have Sempra paying off Ensonada . It is a mitigation fund. It is not a president to build a power plant and set aside money for mitigation. But that raised the concern. Ensonada went to them first . There was evidence that they said we will make this go faster but what Sempra was able to prove to the standards of the [Indiscernible] they do not get any benefit. Will you and Dylan did a great job on a I am sure we will see followed stores as we go along. We are going to move on now. -- The sender go please Officer. Association is long been saying the police are low-paid in California. A new deal announced by Kevin Faulkner and union leaders is designed to help with that. Start with a high point of this creative deal and what they will get to to work around to get the. It is a new five-year contract. The first three years, officers have to pay out-of-pocket for things like equipment, uniforms, health benefits and they do get some sort of allowance for that but they have to pay a little bit out of their own pocket. Like your take on paper. Right. This increases their allowance so they are bringing more money home. Let's talk about we will get into your proposition B which is a hurdle that the work comp. Before we do list talk to Brian who is the head of the police officers let's see what he has to say about proposition B. The last two years is when the salary increases and that is tried to keep it in the confines of what proposition B no pay raise and after that. That is when that will ticket. Within those are years we found other ways and methods to increase take-home pay for the officers. Let the claim what he is talking about their. We got a freeze in effect for a couple more years. Proposition B basically froze any pensionable pay increases until the end of fiscal 2018. Basically they want to increase their take-home pay, you can do that by raising the pay because of proposition B so they came up with a creative way to increase their allowance. They are spending less out-of-pocket every more home. Once that freeze list they can increase up to 3.3% each year for 2019 and 2020. That would add to the base a printable paper. Right. With the additional allowances they have. As I understand the deal is weighted to officers with 8+ years expense. What was the thinking their. The whole problem -- where the negotiation came up is they were noticing more officers were leaving for better pay elsewhere. That is what kicked this all off. Brian Marvel said they noticed it was right around this eight years is when they started seeing officers leaving and going elsewhere. Some were even retiring and then getting jobs elsewhere. They said eight years they wanted to create an incentive to keep them here so it would make other opportunities less attractive to them like going to the sheriffs office or something who has more take him pay. Give us a little bit of background on how we got here and why we have such a thing as proposition B and freezing the union member pay like this. Obviously we have this pension scandal. At the heart of the pension scandal was a giant payments we have to make every year just to keep the pension system up to speed with the people who retire. To try to control that they did two things. They cut off pensions for future employees which I know Dave was a huge fan. But then they also try to Pensionable pay because you decide how much the city has to pay based on salaries, if you keep salary study, then the debt does not grow. So they tried to Pensionable pay. The thing is you can't And shall pay as a directive you have to negotiated each year with employees. What Bob [Indiscernible] the mayor along with Kevin Faulkner was to get [Indiscernible] with each employee group an academic and steady. What they have done is created a new contract for police to allow them to still conform to that so that pension does not get bigger. Like she said it helps them -- So they had take-home pay and figure out around the. Where does this put San Diego in the grand scheme of things with other agencies, with other locations, other cities? In terms of compensation. It sounds like we are just a little bit closer to the. It is not really exactly what Brian Marvel was collaborating on it really eliminates that incentive. So there is not that Between the take-home pay of officers here and the deputies they are seeing at the sheriffs office. It kind of lemon is that incentive that they were saying was pushing them out the door that. The sheriffs office we should note, most good experience cops get to eight years of level were going to the sheriffs office. That was what the discrepancy was. The beginning pay we were pretty close but it was at that point where our salaries turned out for the city salary turned out to be lower. We will get in the numbers here and how me folks are gone. Here is what police chief Shelley Zimmerman told KPBS about how many officers had left in the past year. If you take this fiscal year right now we will start on July 1, we had 16, minimum, you are not required to say why you left that the police department, minimum of 16 said they left for other law-enforcement agencies. 14 of the 16 had been local, Jordy going to the sheriffs apartment. That is a magnet the sheriffs apartment as we noted. How many officers do we have now? Do you have the off -- numbers? When they announced the deal at the press conference last Friday they said it was 1834 that they had on staff but they were budgeted for 2013. Almost another couple hundred officers we don't have. Even on Monday when they came on the day they had calculated the numbers again they lost three more. It is still if you notice if you keep following every couple of weeks they get weekly updates and it is a couple every now and then. We noted how they worked around proposition B , will this be a problem down the road for budgets with the pension system are we kicking the can by sweetening the composition package now? The city is collecting more money and so it is annual. Budget is a lot easier to balance. It costs for money to pay people more, but they have protected it and it seems pretty clear they have protected it from increasing the pension bill which is nice. Dave do want to say something? I wasn't. But I will add like Scott said more money is coming in. We just came out of a huge recession. And you can say that was an anomaly, you can maybe predict it will happen again. Maybe we are back to more normal times is what you're saying. Yes. City officials at the press conference were saying this will not increase the pension liabilities this will not increase it. I think even though there is going to be a potential increase later on there is some in the calculation that it is assumed it will go up once the freeze lists that pay will go up to 3.3%. So they got the full increase of that. That is what they mean it won't affect it. But we will be hearing from city Council -- the city Council will here on how this deal will affect the pension system. A couple seconds left your. What is the last step now? We are supposed to find out midday today if the police officers union does ratify it. There are I think close to 1800 as we mentioned numbers that are supposed be voting today. The next steps with that we will hear the report from Council and city Council also has approve it. Okay we will always be falling up with the stories. Seattle has a space needle and St. Louis has the Gateway arch. How about a huge landmark or San Diego waterfront. A giant firs will or sky Tower. Several unsolicited proposals for some very tall toys have landed at the San Diego Court -- Port commission. Dave your editorial city be called and goofy on a massive scale. Maybe it was some kinder words that we have seen some other folks. They are not crazy about a giant Ferris will like that on the water. It comes down to personal taste. Just speaking as myself, I wrote the editorial as the head of the city beat in the editorial to promise I guess I'm speaking for them to, it just seems like lately we are trying to turn San Diego into a big amusement park. Tell us specifically what is being proposed by now? I am eluding to the special how big is it? It is important to note nobody is going to break ground on a first will tomorrow. These are five different proposals that have come into the port, and the port makes it very clear they were unsolicited. A came in and people want to do this on the water from. They see an opportunity, they come to the port and they propose these projects. Four of which are big observation wheels they call them, Ferris wheels to you and me. One is a big needlelike thing, sky spy I think they are calling it with gondolas that snake up and down the middle of it. I think somebody refer to it as a giant coffee press. Right. That might have been Roger [Indiscernible]. That was my favorite. There is a lot that has to happen. One commissioner, one port commissioner in particular Bob Nelson hasn't very outspoken that these things are fine and maybe once we all decide what we want to do on the waterfront, maybe we will decide we want a big Ferris wheel. Maybe if it's in the grand plan. Right now what we have going on is a big update of the port master plan. They are trying to decide a lot of different really important issues going on, on the waterfront right now. Such as the Midway Museum, they are required by the coastal permit to create a park. That is right next door to where some of these projects will be. Next to the giant aircraft carrier? Yes. Navy P or is supposed be a park so they have Parking for that park so maybe that parking should go where the projects are being proposed. There is the convention center project that is still being debated. There are all kind of things that are important decisions that have not been made yet and Nelson says hold on. These are unsolicited proposals, let's put these on the back burner, let's get to them later. But and Malcolm the chair of the Port commission seems to be really hot and bothered about vetting these things right now. For our audience specifically how big is this thing? It is hundreds of feet in this proposal. Again, there are five different projects being proposed by local groups and outside groups. That the Ferris wheel you said it was 400+ feet. There are four Ferris wheels being proposed one of the taller was is 450 feet. One is 150 feet, they range in size and scope to pending on the project. They are being proposed by, like I said, either local groups or groups that are like the outfit that built the Orlando project and one that is backed by the people that did the Seattle Ferris wheel, I think. I don't know, it just seems like everybody wants to put a big icon summer. We have got to do this massive thing when a lot of people just feel like you need to open up the waterfront to more passive uses like parks and make it an inviting for residents to go down there rather than a huge amusement park. Is the Port commission the right place for this? Is there a committee or other entity or entities? The port manages all Thailand's all around the Bay. Those are public state lands that the port is to be the landlord of. All the hotels, all of the car importers, all of them, they are all tenants of the port. This is a proposal from people to become another little tenant right there to do that sort of thing. This is their job to come up with, they have a mandate. The port has a mandate to do maritime operations to bring cargo and stuff like that in and make sure environment is protected. The mandate does not include a giant wheel. Maybe they can figure it out. I was going to say the coastal commission has to -- they have a lot to do with this to. Everything being proposed for port tied lands have to pass the port -- coastal commission was is all about public access to the coast. The Ferris wheels and these projects these are not the only big wacky things that have been put forth. We had the wings of freedom here, a couple people said that look like giant in the years in the drawings. And then Neptune's revenge the cost of the Titans with the mythical figures in the giant dolphins. That was my favorite. And then the giant boats that were going to be there along the convention center. A version of that did wind up at La Jolla at the Museum you can see all of those boats and a great pile up there. We have not had a great deal of it over the [Indiscernible] back in Midwestern cities, Detroit, Philadelphia, Washington, they have all sorts of public [Indiscernible] dating back centuries. What Dave is talking about their tried to create a an attraction. Public art is a symbol or a sign. I think we have switched now and I think we have identified that from that sort of make something look good and something that would bring families and stuff them. Sorry to interrupt, they are also talking about revenue. They want the revenue. Affairs will would be $30 a write. We will see how it goes and we will see follow-up reporting on whatever we get done in. That does wrap up another week of stories on the roundtable. I will like to welcome my guess Scott, [Indiscernible] and Dave Rolen ascended the city be. A reminder all of the stories we discussed today are available on our website tran1.org. I am marks our -- Mark Sauer thanks for joining us today on the roundtable.