Monday, January 25, 2010

Five ex-San Diego pension board members cleared of felony charges

I was displeased with DA Bonnie Dumanis for indicting only employees, letting all officials off the hook. But I suppose that leaders couldn't do wrong if they didn't have obedient underlings to do their dirty work.

See all San Diego pension scam posts.

State Supreme Court Tosses Pension Charges

January 25, 2010
Voice of San Diego

The California Supreme Court today threw out four-and-a-half-year-old charges against five former members of the city of San Diego's retirement board and left open the case against former board member and firefighter union president Ron Saathoff.

The decision means the five retirement board officials did not violate state conflict-of-interest laws when they voted in 2002 to underfund the city's pension system while increasing future benefits. The court found that the five officials -- Cathy Lexin, Mary Vattimo, Teresa Webster, Sharon Wilkinson and John Torres -- received the same benefits as other city employees and therefore didn't receive a personalized financial gain from the decision. Saathoff, the court decided, received a different kind of benefit based on his position with the union and could be tried on conflict charges.

Today's news could signal movement in the other legal cases related to the pension underfunding scandal. The judge in a federal fraud case against Saathoff, Lexin, Webster and two others was waiting for a decision in this case before proceeding. A forthcoming decision in the U.S. Supreme Court on the constitutionality of the so-called "honest services" law under which the former city officials were charged could also play a role.

Additionally, the Union-Tribune reported last week that the Securities and Exchange Commission is considering settling its April 2008 complaint against Webster, Vattimo and three others implicated in the pension scandal.



Five ex-San Diego pension board members cleared of felony charges
By Staff, City News Service
January 25, 2010

The state Supreme Court Monday dismissed felony conflict-of-interest charges against five ex-San Diego pension board members, but ruled that the trial of former firefighters union president Ronald Saathoff should proceed.

Former San Diego City Employees’ Retirement System board members Cathy Lexin, Mary Vattimo, Teresa Webster, Sharon Wilkinson, John Torres and Saathoff were charged by the District Attorney’s Office in 2005 with violating government code 1090, the state’s conflict-of-interest law.

The law prohibits public officials from negotiating a contract in which they have a financial interest. “We respect today’s decision by the California Supreme Court,” said District Attorney Bonnie Dumanis. “We will continue to aggressively pursue conflict-of-interest matters within our community, as honest and open government are essential qualities which must be vigilantly maintained.”

The District Attorney’s Office accused the six of authorizing a 2002 agreement that granted increased retirement benefits in exchange for decreased contributions by the city into the retirement system. Because they were city employees, the pension board members stood to gain from the improved retirement benefits, prosecutors alleged.

In its unanimous ruling, the state’s high court found that Lexin, Vattimo, Webster, Wilkinson and Torres were “not burdened by a conflict of the sort section 1090 prohibits.” “Rather, by intentional legislative design, many of the board’s trustees were members of the retirement system and thus had interests in common with the membership as a whole,” and the defendants’ financial interest in the agreement was a “consequence of this fact,” the ruling states.
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However, the justices found that Saathoff uniquely benefited from the deal because it allowed him to combine his salary as president of the firefighters union with his city pay for the purpose of calculating his retirement benefits. Saathoff “obtained a unique, personalized pension benefit as a result of voting to approve the retirement board’s contract with the city,” the ruling states...

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