The city's decision to go with Kroll
Regarding “Kroll unsure when report on finances will be done” (Local, July 13):
The brouhaha over Kroll Inc. is due to its having the key to the city's ability to raise money via the bond market. If Kroll would only issue its $20 million report, the outside auditor, KPMG, would certify our financial statement, and we could borrow.
That's the cover story. But it doesn't ring true, if you look at the Union-Tribune story from January (“San Diego weighs alternative financing,” Local, Jan. 31). I quote: “Top city officials are evaluating offers from 12 financial institutions ready to lend the city $500 million for the sewer upgrades.” Jay Goldstone, the city's chief financial officer, said the offers were at “very attractive interest rates.”
For some unknown reason, this proposal was never brought to the City Council, and the council never asked why. Rather than borrow the money privately, the mayor relied on KPMG's recommendation that the city pay Kroll for an investigative report for use in finishing the audit.
One might ask why KPMG prefers a report from a private company to a report by the FBI, whose investigation is ongoing. After all, Kroll does not have subpoena power nor can it take sworn statements, while the FBI can do both.
One big difference between the Kroll investigation and the FBI investigation is that Kroll costs us $20 million. Based on this, it is very hard for me to trust KPMG or Kroll. Or for that matter, the mayor and the council, who ignored the opportunity for private financing last January, “at very attractive interest rates.”