Is the Filner settlement a good deal?

by Barry Jantz

This was published at FlashReport on Sunday.

Is the City of San Diego agreement with Bob Filner a good deal for taxpayers?

Maybe we can start by agreeing on something.  It really chaps the common hide to think the city would enter into any settlement whatsoever with the soon-to-be former but already disgraced mayor.  If it were up to a lot of people, the guy would be left penniless or behind bars.

Yet, for anyone to believe there would be no cost to the city from Filnergate … well, that’s simply not realistic.  The day Gloria Allred and Irene McCormack Jackson held their press conference it was fairly clear the city would be on the hook for something, maybe a significant amount.  A government agency is partly liable for its employees, including its elected officials, even when they are loose cannons and have loose fingers.

With that said, the deal brokered by retired Judge Lawrence Irving — with significant crafting, negotiating and ushering by City Attorney Jan Goldsmith, Council President Todd Gloria and Councilmember Kevin Faulconer — appears to be a very credible settlement for the city, while removing Filner from office nearly immediately.

In essence, the deal means Filner agreed to resign next Friday, in exchange for the city providing a joint defense for any employee related complaints involving the mayor’s conduct in that capacity, with the city further providing up to $98,000 to cover his independently incurred legal expenses for any such complaints.

It’s important to note what the deal does not do:

• The agreement does not cover any of Filner’s legal expenses other than in the case of employee related complaints involving his conduct as mayor, nor will it cover any criminal legal expenses.
• It does not preclude any law enforcement agency from prosecuting Filner on criminal charges. (As a related aside, last Friday Voice of San Diego reported the mayor is now facing a criminal investigation by State Attorney General Kamala Harris’ office in conjunction with the ongoing Sheriff’s probe.)
• The other potential law enforcement prosecution the deal does not prevent is that of the U.S. Department of Justice. Despite the salaciousness of the sexual harassment allegations, such complaints may be limited to civil penalties, while the federal investigation of “pay-to-play” schemes involving two local developers always had the potential of criminal sanctions.

Those are important distinctions.

A jointly provided defense is common in these cases.  If any other harassment lawsuits are filed against Filner, it is likely such complaints will also name the City of San Diego.  While Goldsmith and the city council would probably fight to keep from paying any related costs, it is entirely possible a mediation process would result in payment, or a court would force such payment for a defense, just as in a 2007 case involving former Mayor Dick Murphy and Councilmembers Michael  Zucchet and Ralph Inzunza.  There may be no choice in paying such future unknown costs.

An analysis of the positives of the deal against the alternative:

• First and foremost, the agreement removes Filner from office immediately.
• The only other real viable option for removal — short of waiting for the outcome of the criminal investigations — is a recall, not a guaranteed option. Collecting more than 101,000 valid signatures in 39 days is an immensely difficult task, it almost goes without saying.  Although the signature gathering started a week ago with frenzy, those who are highly motivated to sign a petition will do so at the start, then things slow down as more signers have to be sought out.
• As difficult as that recall process may be, I believe the campaign would have succeeded in collecting the required signatures.  Yet, a recall — virtually assured once on the ballot — would still allow Filner to stay in office until January at the very earliest and more likely until March of next year.
• Filner remaining in office that long would mean potentially increased liability for taxpayers if he continued his behavior, or even if any employee perceived his behavior in the wrong light.  No reasonable person believes one week (or two weeks, or two days) in therapy curbed the “monster inside him.”
• Staying in office until next year would mean continued dysfunction at City Hall.  The most glaring examples, the Sunroad and Centrepoint quid-pro-quo Filner gamesmanship no doubt have other developers concerned about the fate of their projects, thus shying away from doing business during the continuing debacle.
• A recall election would cost the city an estimated $3 million to $6 million. Yet, if his resignation were not secured now, Filner could hold out until the brink of the recall election next year.  The city would be in the midst of spending a barrel full of dough and have the ballots out with the election only weeks (or days) away.  Then he could decide to resign, perhaps even forced to do so as the result of a criminal investigation.  The public funds spent on the recall election would be wasted, with the city forced to start from scratch — as dictated by the city charter — with a brand-new primary (and potential runoff) election process within 90 days of the resignation, including new ballots and another few million dollars.*

Another positive aspect of the agreement, albeit a smaller one, does allow pursuing reimbursement from Filner for any judgments against the city resulting from his actions.  As noted, the legal reality is the city will be responsible financially for a portion of the litigation.  Of course, the city can and should go after him if he has the ability to pay the settlements.  But Filner’s net worth could likely be less than $400,000.  By law his pensions cannot be touched.

After this saga is complete and any complaints are settled, if the city ends up paying several thousand or possibly even more than a million dollars in legal fees and awards, the most to be recouped from Filner is the total of his assets, a few hundred thousand dollars, which may be dwindling quickly with his own legal costs.  By his own admission, Filner does not have the resources to fight this battle.  Goldsmith likened it to extracting blood from a turnip.

Additionally from a financial standpoint, even the cap of $98,000 the city could be required to pay for Filner’s own legal expenses is partly offset by the salary savings for the months he isn’t in office.  Less measurable but more significant; can anyone really put a price tag on the potential loss of revenue to the city from development fees and sales tax during several prolonged months of rudderless, ethically challenged leadership?

Looking at the facts, the agreement is in the best interests of the City of San Diego and the taxpayers.  Yes, providing anything to Filner does chap the hide, but the legal process is not always about complete fairness.  Ultimately, Filner can still be held responsible for his actions, which means he may face criminal charges.  Those decisions are yet to come.

In the meantime, the deal allows San Diego to move forward and start working on issues that have largely been left undone or a mess at City Hall, most notably re-establishing a confidence in the city on the part of its employees, the citizens and those who choose to do business throughout the region.

There can be no exceptional overall outcome from this scar on San Diego, but the settlement is the best scenario for the taxpayers, while limiting future exposure to the extent possible and placing much of the responsibility in Filner’s lap where it belongs.  It’s time to move forward.

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The author is a former member of the La Mesa City Council and now resides in Jamul.  Although he doesn’t live in the City of San Diego, he has a direct interest in this matter, as Filnergate has been an embarrassment to the entire region. How’s that for a bio?

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 *As slightly more than an aside, but way too politically wonkish and “what if-ish” to disturb the flow above, if Filner did resign heading into a recall, another scenario is that a legal challenge could result from someone claiming the election already qualified for the ballot and thus should proceed … no different than when an elected official dies in office while facing reelection and his/her name still appears on the ballot.  The claim would be that if the “should Bob Filner be recalled” question passed, the second question on the ballot (who should replace him?) must rightfully determine the new mayor.

After all, there would be potential candidates seeing themselves likely benefiting from a one-time recall election (determined by the highest number of votes, or a plurality) more so than a primary and possible runoff scenario (decided by majority votes), the latter of which is the result of a resignation.  The mayor’s resignation in advance of a recall election could have thrown the city into legal turmoil (okay, more legal turmoil).

It’s a moot point now, but something the city council may want to address as the members look at other needed charter revisions that came out of the lessons of Filnergate.