San Diego City
“For $20 million this better be the best report ever in the history of San Diego… In the world by the way”
– San Diego Councilman Tony Young
SAN DIEGO CITY COUNCIL – KROLL’S $250,000 BILL BECOMES $20 MILLION
It was in 2006 that San Diego’s City Council got a nasty shock when Kroll’s invoice for an investigation into the Council’s finances grew from its initial contract for $250,000 to a staggering $20 million.
Kroll’s services had been retained by the San Diego City Council to investigate whether illegal acts had been committed in the handling of the city’s pension scheme ‘and other financial matters’.
Initially hired in February 2005 on a $250,000 target contract, Kroll’s billings ballooned $15 million within six months as the firm repeatedly asked the council for more money claiming its investigation had become more extensive.
At the end of what became an 18-month contract, the cost of employing Kroll had come to make up over half of the city’s legal and administrative expenses related to the pension scheme.
“For $20 million this better be the best report ever in the history of San Diego… In the world by the way”, said San Diego Councilman Tony Young.
When the 266-page report was finally handed over, City Attorney Michael Aguirre demanded Kroll justify the conclusions of its work and described the report as “substantially and materially deficient”.
Aguirre also accused Kroll of shading the report to “please council members who authorized the $20 million”. The report had not found current or former elected officials to be at fault but rather had blamed city officials for being ‘negligent’.
Kroll were also accused of withholding documents and ‘exhibits’ that supposedly supported the conclusions of its report. Transcripts of 68 interviews taken during the investigation were not included with the documents returned to the City Council.
Kroll refused to say why the witness statements were not supplied along with all the other supporting material.