San Diego’s political struggle over the coveted Qualcomm Stadium site lurched into troubling new territory this week, as City Attorney Mara Elliott appeared to launch a criminal investigation that may involve its highest public officials.

In a press release Thursday morning, Elliott blasted away at whomever gave to the SoccerCity developer — and potential opponent in court — her confidential June 15 memo that warned Mayor Kevin Faulconer and the City Council about legal and financial risks to taxpayers posed by the developer’s ballot initiative. Four days later, the council voted to put it on the November 2018 ballot.

Somebody gave the memo to FS Investors, the developer lobbying council members for a special election this fall to ask voters to approve its $4 billion SoccerCity project on the stadium’s 233 acres in Mission Valley.

“The person or persons who gave this confidential legal analysis to FS Investors did more than commit a crime. They betrayed the taxpayers of San Diego,” Elliott said in the release, calling it an “egregious breach of public trust.”


“Make no mistake: This was not a ‘leak’ to inform the public,” she said. “This was a covert and strategic act that undermines the city’s position in negotiations.” Elliott went on to call for the miscreants to “resign their positions with the city.”

This is serious stuff, especially the part about intention to “commit a crime.” City attorneys do not use such language lightly. The big question is what happens next.

Before we get into legal quicksand that may lie ahead, let’s review the political landscape.

For openers, it’s now clear that Faulconer and all nine members of the City Council knew far more about potential legal and financial risks to taxpayers than anybody shared with the public. This lack of transparency would seem a bit awkward for the mayor, along with council members on either side of the issue.


And it sheds light on the council’s 5-4 vote against a special election, in which Democrats snubbed Republicans along party lines. For those who pegged the squabble as mere political hackery, with 100,000 voters who signed SoccerCity’s initiative caught in the middle, now we have more policy meat on the bone.

Last month, Elliott released a public report to the mayor and council outlining the initiative’s major issues, in a question-and-answer format, to inform the council’s June 19 vote. The report was relatively mild and neutral in tone, in my view, although it threw cold water on a few developer talking points.

SoccerCity responded with a legal analysis refuting much of Elliott’s report, and repeated assurances that any ambiguities would be cleared up by a lease negotiated between the mayor and the developer after the initiative’s passage.

Elliott followed up with her confidential memo of June 15. This time the tone was entirely different. For starters, the memo warned directly of “the high likelihood of litigation over the initiative.”


Elliott’s memo said SoccerCity’s public commitments may not be enforceable in court. The initiative doesn’t require a soccer team at all, it said, and failure to build a stadium may leave the city stuck with tenants on the rest of the land for 99 years.

Money for parks may not materialize. Leasing provisions might violate city charter and state law. Taxpayers may be liable for a toxic waste cleanup.

You get the picture. Any savvy business executive knows that a sales brochure is all well and good, but you’d better read the contract carefully. And San Diego’s SoccerCity contract, all 3,000 pages of it, seems to insulate the developer and transfer considerable risk to taxpayers.

Then there’s Faulconer, who, on behalf of his political future, presumably hopes the leak didn’t come from his executive staff.


SoccerCity held 25 private meetings with the mayor or key staff members since early 2016, a San Diego Union-Tribune investigation found last month, and enjoyed ready access to officials and technical information. Critics say this gave the developer a huge head start over potential competitors.

And I can attest to an unusual level of coordination. On two occasions I have submitted questions about city policy to the mayor’s press office, only to receive responses from SoccerCity representatives later.

I would expect any prudent big-city mayor to get involved in the details of such a major land-use proposal, but Faulconer’s track record raises a question about whether the city will be viewed as neutral, as state law requires for a citizens initiative. If his office helped SoccerCity to confidential legal advice, that coffin would seem nailed.

This brings us back to the budding legal drama and whether a leak-hunting investigation is under way. Gerry Braun, Elliott’s chief of staff, gave me a blanket refusal to comment Thursday.


“As you know, we do not discuss investigations by other agencies, real, potential or hypothetical,” Braun said via email.

And yet, with her very public allegation of criminal behavior and intent in the press release, the city attorney would seem to confront a binary choice: Elliott can decline to investigate and settle for expressing outrage.

Or she can investigate the leak, which also raises questions. If the leak came from her staff, how can the city attorney’s office investigate itself? The conflict argues for referring the matter to the district attorney or state attorney general. Or maybe even a special counsel? Robert Mueller is presumably busy in Washington.

And then what? Do lawyers put the mayor, city attorney and every city councilmember under oath for questioning, along with their staffs?


The Elliott memo is what attorneys generally regard as “privileged,” or subject to the attorney-client privilege of confidentiality. Indeed, the memo was marked “attorney to client correspondence” and “for confidential use only” in capital letters on the cover page.

Such designation usually means that nobody can force the attorney to release the information unless the client agrees. In this case, that’s the mayor and a voting majority of the city council.

Our copy, which the Union-Tribune posted to its website Wednesday, was provided to us by Chris Garrett, the SoccerCity attorney who authored the developer’s various letters to convince the council and the public of the initiative’s legality and overall merits. We asked because the lawyer had referred to Elliott’s memo in a response after the June 19 vote that warned the city council against soliciting competing bids for the Qualcomm property until after voters had considered the initiative in an election.

Garrett wasn’t available for comment Thursday, a spokesman said. But in an interview with KUSI aired Wednesday, Garrett said the document was “floating around” the council chambers on June 19 and that everybody seemed to have it.


“I have to tell you, I was quite shocked to find out that that memo was something she (Elliott) considered to be confidential,” Garrett said.

It seems likely that a state ethics panel will ultimately determine whether his knowledge or intention is relevant. Ordinarily, a lawyer is required to stop reading such a document and immediately return it to its rightful owner.

For perspective, Garrett is a major political and policy force in town as a partner at the San Diego office of Latham & Watkins, a giant international firm. Garrett represents the Hilton hotel and frequently the city government, as well as SoccerCity. And his firm represented the Chargers last year in its quest for a downtown stadium.

Meanwhile, his boss is reluctant to disclose the source of Garrett’s copy.


“This appears to be an internal city issue,” said Nick Stone, project manager for SoccerCity’s developer. “The document did not come to me from a city employee. Had I been aware that the memo was not intended to be made public, I would not have shared it with my attorney — and he certainly would not have referenced it in a public letter.”

This leaves unanswered who gave the document to Stone’s unnamed source. Elliott’s next big decision is how far to pursue that question.

Previous related columns:

Facts may doom mayor’s convention center ambitions (June 11, 2017)


Details undermine SoccerCity’s case for haste (March 12, 2017)

After rejecting NFL, will San Diego subsidize soccer? (Feb. 12, 2017)


Business

dan.mcswain@sduniontribune.com (619) 293-1280 ▪Twitter: @McSwainUT