It’s bad enough when fraud affects a company. How about messing up an entire city?

You’d be hard pressed to say something negative about San Diego — unless you’ve got a vendetta against the Chargers, a world-class zoo or never-ending gorgeous weather. But financially speaking, we’ve got a bone to pick with the city: It elected some of the most slimy, mischievous city officials we’ve ever caught wind of.

Ex-city manager Michael Uberuaga, his former deputy of finance Patricia Frazier, former auditors and comptrollers Teresa Webster and Edward Ryan, and former treasurer Mary Vattimo were charged by the SEC for making false and misleading statements in relation to the city’s unpaid liabilities during 2002 and 2003.

That’s the “official” word. What it really means is that the five ex-city officials are on the chopping block for lying to investors about how much debt the city was in. The city’s pension and retiree healthcare obligations were entirely under-funded, yet the officials somehow forgot to mention that to bond investors and credit rating agencies.

The numbers don’t look good: San Diego’s unfunded liability was at a controllable $284 million before these officials took over. That number’s expected to balloon to over $2 billion by next year.

San Diego Mayor Jerry Sanders has implemented a pension fix to help offset the balance, but it’s nowhere near enough to make up for the problem — millions of dollars will need to be drained from street repairs, fire prevention and water services to make a serious dent.

There’s some justice in that the city attorney can bring charges against these five and any other individuals who violated the state and city laws, but we doubt they’ll be able to come up with the $2 billion the city needs.

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Tags: Pension plans, San Diego, SEC, Securities fraud, Unpaid liabilities