DA's Charges Against Saathoff Dropped

Why didn't San Diego City Attorney Casey Gwinn and/or his second-in-command Leslie Devaney, who was the liaison to the City Council for Gwinn, warn the council against the pension deal? I'm happy to see that Bonnie Dumanis wasn't able to punish only employees when there was enough blame to go around a much broader group of involved persons.

See all posts re San Diego pension scam.
See more articles at Enron by the Sea about pension lawsuit.

DA's Charges Against Saathoff Dropped
May 5, 2010.

San Diego District Attorney Bonnie Dumanis dropped conflict of interest charges this morning against former firefighter union president and retirement board member Ron Saathoff for his role in the city's pension underfunding scandal, ending one of the two criminal prosecutions related to the 2002 actions.

In January, the California Supreme Court threw out conflict of interest charges against five other retirement board members saying they didn't receive a personalized financial gain from the decision to underfund the pension system in exchange for increased future benefits.

The court allowed charges against Saathoff to stand, but the ruling, Dumanis said in a press release, "substantially undermin[ed]" the case against him.

The decision is the latest in the string of pension legal failures...

Jan Goldsmith seems to be channelling Mike Aguirre regarding pension underfunding

City Attorney Explains Potential Pension Bombshell
Voice of San Diego
LIAM DILLON
March 9, 2010

San Diego City Attorney Jan Goldsmith brought the noise on pension reform at City Council on Monday afternoon, publicly stating his belief that city employees could be responsible for part of the city's $2.1 billion unfunded pension liability.

His opinion came after a presentation by the San Diego City Employees' Retirement System. The retirement system's attorney, Elaine Reagan, said the city could not make employees help pay down that debt.

Goldsmith disagreed and gave his own presentation supporting his position that they could. Changes in employee contribution rates, he said, are not guaranteed, meaning they could be modified through labor negotiations.

"The minute you interpret our charter as requiring that the city pick up all costs, you are stating that they are vested rights," Goldsmith said. "I do not agree with that. I do not believe that interpretation is in good faith. I think it is flawed."

As the council discussed the issue, Goldsmith made sure to leave room to change his mind on the retirement system's opinion. He gave no formal opinion in writing beyond his presentation, and said he wanted to study the issue more.

But Goldsmith did not back down from his contention that the city, not the retirement system, interprets the City Charter section.

"This is not the SDCERS-form of government," Goldsmith said...

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.

-- LIAM DILLON


MORE ON THIS SAN DIEGO SUPERIOR COURT CASE


Five ex-San Diego pension board members cleared of felony charges
SDNN
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.
Click here to find out more!

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...

Strong Developer Form of Government?

Jarvis Ross posted the following on San Diego Coastal Alliance blog:

Back on November 18, 2002 Diann Shipione prophetically stated before the city council…“What concerns me is that the benefit enhancements were conditioned upon the retirement board approving this agreement, and that is, in my opinion, ethically troubling.... I’ll be quite frank with you, it almost appears to be corrupt.

”There is another area of great and growing concern to the citizens of every part of the city. This past election the public was led to believe that they were getting a strong mayor form of government.

Apparently what they really bought into was a STRONGER DEVELOPER form of government. The recent re-hiring of the notorious Escobar-Eck as head of Development Services at a six figure salary heightens the anger of those who want that department remerged back under the Planning Department.

This would free up that salary to hire sorely needed police and by placing DSD’s salaries back in the general fund it would help avoid the public impression of public servants prostituting their work in return for large developer’s permit fees...


http://72.14.253.104/search?q=cache:lobvcgYAjHIJ:www.sdcoastal.org/commentary.html+mea+san+diego+election&hl=en&ct=clnk&cd=11&gl=us

Ann Smith and Judi Italiano: working for the rank and file? Or for themselves?

MEA Attorney Anne M. Smith

Voice of San Diego's Letters column draws a lot of attention. I was interested in this post:

Leanne wrote on July 30, 2007 8:47 AM:

"MEA could save a lot of money by getting rid of the Italiano family trust. Judi gets a director's retirement plus an equal amount in consultant fees from MEA, last I heard, and happily hires family members as additional consultants and staff. If Anne M. Smith threatens to blackmail you by saying that she'll walk if you get rid of Italiano, then kiss her good bye and hire an attorney who is not more committed to Italiano then to the union. MEA has been run disgracefully for years. I cry no tears for anyone except employees forced to pay forced agency fees to a union that has questionable business practices."


Leanne's post triggered an angry response from Kathi Ward:

Kathi Ward wrote on July 30, 2007 4:55 PM:

"Leanne, you speak as if you know Ann Smith, but I know you could not possibly know Ann Smith - not even a little bit. Ann's heart and soul is devoted to MEA and it's members - and she fights her heart out so that you can keep your hard earned benefits. Yes, Ann is there every day - fighting for city employees - even those like you, who seem to resent her. You are bad mouthing the ONLY entity who is in there fighting for YOU! I'm glad I don't know you."


Since I do know Ann Smith, and I know from personal experience how Smith and elected officials cover up wrongdoing, I decided to weigh in. Here's my post:

Maura Larkins wrote on July 31, 2007 12:58 PM:

"Ann Smith is a true friend to union leaders, but she's not so helpful to the rank and file of MEA or other unions. I believe that both the city and the unions need to be operated in a more transparent manner. City and union leaders seem to operate for their own personal benefit rather that for the benefit of the people who pay their salaries--and their lawyers."


I don't usually get direct responses to my comments, but this time I did. Here's what Kathi Ward, who works for MEA, wrote to me:

Kathi Ward wrote on July 31, 2007 3:22 PM:

"Maura, like I told Leanne - you don't know Ann Smith. Everything she does is for the rank and file employees of MEA. Why don't you give up some of your personal time and get involved in your union so you can see what is really going on? Or is it easier to do nothing and sit on the sidelines and just criticize?"


Here's my response:

Maura Larkins writes:

I do know Ann Smith. I spoke with her at length, and corresponded with her, when she was working for my union, Chula Vista Educators. She was helping union leaders cover up wrongdoing.

I believe unions are necessary to the healthy functioning of our economic system, but, just like government officials, union leaders often betray the rank and file because of personal politics and desire for power or money.

I believe Ann Smith would have blown the whistle on the illegal San Diego City pension deal if it hadn't been personally beneficial financially to MEA's president. Keeping quiet about wrongdoing seems to be what a lawyer has to do to keep a job with a union.

That's equally true for lawyers for public entities.

Speaking of public entity lawyers, there is one big exception in San Diego. There is one public entity lawyer in San Diego who is not appointed by officeholders or administrators, but instead is elected by the voters. In the last election, voters chose Mike Aguirre, who DOES NOT COVER UP WRONGDOING BY OFFICIALS. Do we want a City Attorney who will represent only the powerholders? Should the city attorney be a personal lawyer for officeholders? Or should he represent the people of the city? Should he prosecute crimes and file civil lawsuits no matter who is guilty, or should he cover up wrongdoing by employees, elected officials and their friends?

See the whole discussion at:
http://voiceofsandiego.org/articles/2007/08/01/letters/038aguirre073007.txt#info

My friend Lee Lipps (from CTA) meets the new administrator of San Diego's "underfunded and over-indicted" pension board

According to the Conta Costa Times:

"David Wescoe, San Diego's retirement system administrator, told commissioners about the eight city and union leaders in his city facing federal or local criminal charges -- or both -- for allegedly boosting their own pensions and doing other sneaky things.

"Wescoe, who came on board after the scandals, opened with this remark: "I often like to say I'm from the underfunded and over-indicted San Diego City Employees' Retirement System.""

Note by EVAN McLAUGHLIN, Voice of San Diego
July 16, 2007

"Wescoe was one of a handful of witnesses who testified in front of Gov. Arnold Schwarzenegger's Public Employee Post-Employment Benefits Commission last week. At the meeting, California pension officials announced that retirement funds across the state are running a combined $63 billion deficit, but that funding levels for public pension systems had increased by 11 percent since 1991."

Maura Larkins note: CTA's Lee Lipps was recently chosen to sit on the Benefits Commission (see below).