MYSTERY OVER ‘FOOTNOTE 15’ RESURFACES IN NEW DOCUMENTS
Records confirm multiple versions of report on Ash St. deal
One of the biggest mysteries in recent San Diego political history is deepening, with fresh disclosures and a new lawsuit related to the infamous “Footnote 15” that roiled the elections for mayor and city attorney during the final weeks of the fall campaign.
It’s still not clear who wrote the footnote that was inserted into a report to city officials last summer and that was leaked to NBC 7 San Diego, presumably to affect the looming election.
But documents newly released by the city in response to a Public Records Act request appear to confirm that the City Attorney’s Office has known for months that there were multiple versions of the report of an investigation into the city’s lease-to-own purchase of the former Sempra Energy building at 101 Ash St.
The city bought the high-rise under a 20-year lease-to-own arrangement in 2017, but the property has been mired in litigation and remains vacant due to asbestos and other issues years after the city paid tens of millions of dollars on the lease.
A leaked version of the investigation into the transaction contained Footnote 15, which raised questions about whether now
Mayor Todd Gloria withheld information about the Ash Street deal from the public and fellow council members when it was approved in 2016. He has said he did not.
The footnote also said City Attorney Mara Elliott helped shield Gloria and his staff from investigators for Burke, Williams & Sorensen, the Los Angeles law firm hired by the city in 2019 to examine the transaction and write the report. Elliott has said she did not shield Gloria.
Both said the footnote was a fabrication inserted into a doctored report.
Another version of the law firm’s report contained no Footnote 15, the city said. Nor did it have three other footnotes that the leaked version had that did not directly pertain to Ash Street and were apparently added to the report city officials said was falsified.
But an internal city communication dated last September and released just days ago refers to at least two versions of the law firm’s findings. At that time, no one at City Hall had acknowledged that multiple versions of the report existed.
“Per City Attorney’s Office, the actual memo/report provided by Burke, Williams & Sorensen is privileged in its original or edited version,” the message said. “Please keep this in mind as you review any responsive records for this request.”
Both the law firm and the city have declined to release any version of the report, citing attorney-client privilege.
Elliott’s spokeswoman last fall told The San Diego Union-Tribune: “The fabricated footnote does not appear in any city document known to this office or to outside counsel.”
Other newly disclosed city records also discuss multiple versions of the law firm’s investigations.
According to exchanges between Burke, Williams & Sorensen and a lawyer for NBC 7 San Diego — which reported the content of Footnote 15 in a story published Sept. 3 — both parties acknowledged at least two versions of the report.
“Some questions have come up about the two versions of the report that have now been provided to NBC 7,” an NBCUniversal attorney wrote to a partner at the Burke, Williams & Sorensen firm on Sept. 8.
The emails between the two lawyers also confirm that the report was sent to city officials by the law firm via a Microsoft Word document,
meaning that other people could have accessed and altered the initial report.
Also, the exchanges show the Burke, Williams & Sorensen lawyer declined to say whether more than one version of the report was sent to the city, limiting his reply to NBCUniversal’s lawyer to the one memo obtained by NBC 7.
“There was only one version of the June 17, 2020, memo sent to the city of San Diego,” the Burke, Williams & Sorensen lawyer told NBCUniversal.
Campaign turmoil
The new disclosures are significant because both Gloria and Elliott, who won their November elections, strongly denied the Sept. 3 report from NBC 7.
They issued statements within hours of the story’s publication stating that the footnote had been falsified and demanded that NBC 7 retract its report.
Gloria did not respond to questions raised by the newly released documents, but one of his senior aides issued a statement Friday noting mistakes in the NBC 7 story and saying the public deserves to know who wrote Footnote 15.
“What we know for certain is that someone stood to benefit from this deceptive act,” the statement from Deputy Chief of Staff Nick Serrano said. “Rest assured, we will do all we can to get to the bottom of this.”
Elliott’s office issued a one-sentence statement in response to similar questions Thursday: “We’ll review the complaint and respond through the courts,” the statement said.
Burke, Williams & Sorensen also rebutted the story soon after it was posted online. Two of the firm’s attorneys signed statements swearing under oath that the footnote was not included in their legal analysis.
“It is absolutely clear that our memorandum has been doctored to add Fabricated Footnote 15,” the company said in a September statement.
NBC 7 initially stood by its story, which, apart from Footnote 15, focused on the Ash Street transaction and internal emails showing that various city officials had worked to justify an acquisition price millions of dollars above the appraised value.
But eight days after publication, the station retracted key elements of its report, saying it could no longer vouch for the authenticity of the footnote.
The company said in a statement that it had received the Burke, Williams
& Sorensen findings anonymously and cited a “miscommunication” with a senior City Hall source who they thought had confirmed its validity.
NBC 7 announced that the two employees involved — producer Dorian Hargrove and investigative journalist Tom Jones — would be immediately suspended. Both men have returned to work, although their jobs have been redefined.
Hargrove filed a claim against the city of San Diego and Elliott in October alleging that his reputation was wrongly tarnished. The city has yet to deny the allegations in the legal complaint, which seeks more than $25,000 in damages.
Anonymous requester
The circumstances surrounding the release of the latest documents are almost as mysterious as the origins of Footnote 15.
In late September, almost two weeks after NBC 7 retracted its story, a person identified as Jennifer Anderson of 123 Confidential St. in San Diego requested a series of emails and attachments related to the Ash Street investigation. There is no such address in the city.
“Should any documents be privileged or otherwise exempt from disclosure, I request the information about the document and the reason for exemption, or a copy of the document with the exempt information redacted,” the public records request said.
Within days, the request
was forwarded to a variety of city departments to see which agencies might have responsive records.
The routine inter-departmental query prompted a series of internal communications, including the one referring to an “original or edited version” of the Burke, Williams & Sorensen study.
Even so, the internal exchanges were not immediately released to the public.
In late December, the administrator processing the request sought additional information from the requester, Jennifer Anderson, who never responded, city records show. The request was closed in early January.
However, San Diego attorney Cory Briggs, who lost to Elliott in the city attorney’s race last year, saw the just-closed request and was curious.
He filed his own request for any internal communications related to the Ash Street request, and those documents were released by the City Clerk’s Office in February.
Briggs said he sent the Ash Street records to a client, La Prensa San Diego publisher Arturo Castanares, who has reported on the city’s ill-fated building purchase for months.
Castanares subsequently sought additional documents from the city related to the Ash Street deal, but the city said it had no records responsive to the request.
The newspaper publisher narrowed his request but again was rebuffed.
He filed suit in San Diego Superior Court last month. The internal city exchanges and emails between Burke, Williams & Sorensen and the NBCUniversal attorney are included as exhibits.
“Having obtained evidence from city indicating that the accusations made by Mr. Gloria and Ms. Elliott against the two journalists were themselves false, plaintiff made two separate requests for public records,” the legal complaint states.
“At a minimum, plaintiff wanted to ascertain the dates, author(s), and recipient(s) of the original and edited versions of the BWS investigatory reports,” it adds. “Unfortunately, city provided absolutely nothing.”
Castanares is asking a judge to order the city to release the requested records, to allow the plaintiff to inspect and obtain copies, and to issue an order providing for the court’s continuing jurisdiction over the matter.
The plaintiff and his lawyer also want attorney fees and expenses related to the case.
Mired in litigation
The city signed the leaseto-own contract for the 19story Ash Street high rise in January 2017, but the property has been vacant for all but a few weeks since then due to asbestos contaminations and other issues.
City officials paid more than $23 million on the 20year lease before suspending the $535,000 monthly payments in September, two days before the controversial NBC 7 report was published.
They also spent more than $30 million on renovations to the vacant office tower, but an independent consultant reported last year that it still needed $115 million in various upgrades and repairs before it can house the 1,100 or more employees that city officials wanted to move into the building.
NBC 7, the Union-Tribune and other news organizations all have reported previously that the property was appraised at $67 million before the city approved the $128 million lease.
Gloria, who was then a councilman, made the motion to approve the lease agreement when it came before the council.
The lawsuit from Castanares is only the latest to be filed in the Ash Street case.
Multiple city employees and contractors have sued the city over alleged asbestos contaminations; a San Diego resident is suing to overturn the lease as an illegal use of public funds; the city sued its landlord to secure a judge’s ruling that the decision to suspend $535,000 monthly lease payments was sound; and the seller and lender are suing the city to recover unpaid rent.
Since being sworn in as San Diego mayor in December, Gloria has not commented publicly on how he plans to steer the city out of the Ash Street situation.