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Levitt Unloads

Published: Thursday, October 4, 2007 4:02 PM PDT



Former SEC Chairman Arthur Levitt decided to unleash on the city of San Diego yesterday in an interview broadcast by Bloomberg. (Click here and click on the video to the right or just read my transcript below.)

You'll remember that Levitt was the symbolic head of the committee led by Kroll Inc. that investigated San Diego's ills (for the slight cost of just more than $20 million).

Here's what he had to say:

Arthur Levitt

The problems we have in U.S. corporate pension funds pale compared to what's going on in municipal markets ... It's a huge market -- it's almost like an oriental bazaar. We know so little about it. The reason for that is kind of an arcane law called the Tower Amendment, which prevents the SEC from overseeing the municipal market. Chairman (Christopher) Cox has made a major priority of going after the municipal market to get greater transparency and disclosure and he's right on following on the scandalous activities in San Diego, which is underwater in terms of their pension funds and the issuance of bonds in which investors had no way of knowing what was going on. Repealing the Tower Amendment, which has to be done by Congress, is the way to go.


And here's an interesting addendum: The host asked him if he was surprised that the SEC hasn't fined anyone in San Diego for what happened.

I don't think the last chapter has yet been written. These were errors made not out of the wind. These were errors made by individuals and I think it's essential that the SEC go after individuals who acted fraudulently against the people, the citizens of San Diego.

-- SCOTT LEWIS




11 Comments so far on this story...

He's right. There is still more to come, and the final chapter will be interesting.

Posted by David G Urban | reply to this comment
October 4, 2007 3:06 pm

Aguirre is finally going down!!

Posted by Down with the Shaw | reply to this comment
October 4, 2007 3:34 pm

Just woke-up from my 20 minute afternoon nap, where I dreamed that the Chargers won a football game. Now, I read that Art Levitt says that somebody might actually be held accountable for Enron By The Sea. Is it possible? No more absurd blaming on systems? Are reality and fantasy merging for a harmonic convergence? Are Aguirre and Fabiani holding hands and skipping down Prospect Ave? It is time to take a chance. I'm heading to Rubios. If I can make it through two fish tacos, without somebody blasting my delicate ears with their self-important cell phone chatter, well---that will be a conclusion to a positive, new kind of San Diego day.

Posted by Dale Peterson | reply to this comment
October 4, 2007 4:28 pm

Its regretable that the orginal instigators will never be charged as the Statute if Limitations has run out. The ones still eligible to be charged probably have special countdown calenders on their walls showing how long they have before they cant be charged either. The City Council paid $20(?) million dollars for a Kroll Report that would not name names. Council didnt care how much it cost as long as nobody would be named responsible or criminally liable. That condition was too good for Kroll to pass up so Kroll kept increasing their fees before giving Council what they wanted and we paid for.

Posted by Jim | reply to this comment
October 4, 2007 5:57 pm

If ANYONE believes this fool Arthur Levitt, and his pie in the sky fable about someone getting charged in the SD bond scam, and actually being held accountable, well I have some ocean front land in AZ I want to sell you!. NO ONE WILL BE CHARGED-EVER. They would have filed charges a long time ago, there is NO need to wait to file these types of charges once the investigation have finished, and they have finished, it is over, done, nothing mroe to investigate. Jack McGrory should be sent to the slammer for 50+! years, he is the one that concocted and implemented Managers Proposals I and II, which is the very root cause of the pension meltdown, and he should go to jail. But that would mean holding the Gov accountable for their actions, when was the last time that happened???

Posted by Billy Bob Henry | reply to this comment
October 4, 2007 6:34 pm

$900.00/hours for Levitt, a college graduate, is fair compensation, eh, Billy Bob?

Posted by Underpaid Arthur | reply to this comment
October 4, 2007 8:21 pm

Talk is cheap!

Posted by Norman | reply to this comment
October 5, 2007 6:13 am

I wouldn't exactly call that unloading. But whatever. It's just nice to know that Madaffer, Atkins, and Peters still have to look over their shoulders.

Posted by Larry | reply to this comment
October 5, 2007 7:20 am

Amazingly enough, I agree with most of what Mr. BBH writes in his post. However, I would like to know if he would use the Levitt arrangement as a good example of how well the private, as opposed to the public, sector works. It certainly worked well for Kroll.

Posted by Marnie | reply to this comment
October 5, 2007 7:59 am

In the same interview, ol' "Levity" Levitt opines, again without naming names, that "there are at least six major municipalities which have problems that haven't bubbled forth..." Sounds like he's trolling again for another sucker city to cough up 900 bucks an hour....

Posted by TY | reply to this comment
October 5, 2007 8:46 am

Why is Aguirre going down? All this started before he started office. The people who are primarily responsible are quickly retiring on puffed up retirement benefits. Levitt and friends took advantage of a weak Council and Mayor...that they could continuously drag their feet and pump up their charges as they did only reflects the ignorance of our politicians about what was going on. It was a legal con job. More fool City of San Diego, who has dropped money on Spanos and Moore and developers as if there is a printing press in the basement. Oh, that's right, it does exist in the form of taxpayers who don't pay any attention to what is going on and vote for the same fools over and over again. I wonder who is paying for Levitt's latest opinion..the man does nothing for free.

Posted by Leanne1 | reply to this comment
October 5, 2007 11:09 am


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Scott Lewis on Politics

The Scott Lewis on Politics blog, abbreviated cleverly as SLOP, is a collection of observations, insights and the occasional scoop on public affairs in San Diego. Please feel free to e-mail Scott at scott.lewis@voiceofsandiego.org.

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