Charges Dismissed for Five Former San Diego Pension Board Members
January 26, 2010 (PLANSPONSOR.com) – In a unanimous decision, the
California State Supreme Court dismissed criminal charges against five former
members of the San Diego City Employees Retirement System board on Monday.
However, the court concluded that the case against former
firefighters union leader Ronald Saathoff could go forward, according to the
San Diego Union-Tribune. The court ruled that Saathoff was in a different position
than the other five because he secured an agreement with the city that allowed
him to combine his salary as a union official with his city salary in order to
calculate his ultimate retirement benefit, and because that benefit went only
to Saathoff, there were enough questions about the deal to allow the case
against him to go forward. Prosecutors said that move boosted Saathoff’s
monthly pension by about $2,500, according to the news report.
Writing for the court, Justice Kathryn Werdegar said Cathy
Lexin, John Torres, Mary Vattimo, and Sharon Wilkinson could not be prosecuted
because their actions in 2002 were shielded by other provisions of the
conflicts-of-interests law. The former pension officials were accused of
violating state conflict-of-interest laws when they voted to boost retirement
benefits for all city workers in 2002 while at the same time decreasing
contributions into the city's system (see High Court Hearing this Week on San Diego Pension Case).
The court noted that, among other things, the
conflicts-of-interest law bars public officials from participating in contracts
in which they have a personal financial stake. According to the Union-Tribune, Werdegar
said that while the defendants did have a financial interest in the 2002 plan,
it was the same interest held by the 20,000 other members of the retirement
system, and that common interest does not pose the kind of conflict the law
aims to address.
Saathoff, Webster and Lexin also face fraud charges in
federal court. That case has been on hold, awaiting this ruling by the state
high court, and one expected later this year by the U.S. Supreme Court on
challenges to the federal fraud law.
In December, the pension
benefit that allowed Saathoff to combine his union salary with his city salary
for benefit calculation purposes was declared invalid by a state judge (see CA Judge Invalidates Union President Pension Benefit).
Rebecca Moore
editors@plansponsor.com