Compliance March 27, 2006

CA Judge Drops Some Aguirre Suit Targets

March 27, 2006 (PLANSPONSOR.com) - A California state judge has tentatively excused five of eight former city and pension officials from a lawsuit accusing the group of illegally receiving pension benefits.

Reported by

Fred Schneyer

In the tentative ruling issued last week, Superior Court Judge Steven Denton asserted that the five being dropped from the lawsuit did not receive any unique benefits in exchange for their efforts crafting or approving 1996 and 2002 pension increases, the San Diego Union-Tribune reported. The lawsuit was filed by San Diego Attorney Michael Aguirre in an effort to get pension benefits rolled back.

Because of that, Denton ruled, the five did not violate the Political Reform Act. Aguirre had accused the eight in the suit of having conflicts of interest that should invalidate the pension increases. In a court hearing, Denton gave both sides 10 days to submit further arguments before he makes a permanent ruling.

Denton left the complaint in place against Lawrence Grissom, the pension system’s former administrator; Ron Saathoff, the firefighters union president and a former pension trustee; and Teresa Webster, the former acting city auditor.

The five removed from the suit were Loraine Chapin, the pension system’s former general counsel; Bruce Herring, a retired deputy city manager; Cathy Lexin, the city’s former human resources director and an ex-pension trustee; John Torres, a city fingerprint analyst and ex-pension trustee; and Sharon Wilkinson, a city management analyst and ex-pension trustee.

Chapin, Grissom, Lexin, Saathoff and Webster are under federal indictment in connection with the pension underfunding (See Five Indicted in San Diego City Pension Case ). Lexin, Saathoff, Webster and Wilkinson are also facing state charges of conflict of interest along with Torres and Mary Vattimo, the city’s former treasurer (See Six ex-SD pension Officials Bound Over for Trial ).

For a year, Aguirre has been trying to force the city to revoke pension benefits granted to city employees in 1996 and 2002. The city’s pension system has a deficit of $1.4 billion, and City Hall is enduring a financial crisis that has led to federal investigations and limited the city’s ability to borrow money.