Feds File Appeal in SDCERS Pension Case

April 19, 2010 (PLANSPONSOR.com) – San Diego pension officials aren’t out of the woods yet.

According to the Union Tribune, federal prosecutors have decided to appeal a ruling earlier this month that dismissed all criminal charges against five former officials of the city’s pension system.

A notice of appeal was filed Friday on the electronic federal court docket for the case, though it did not specify on what grounds the appeal will be based or what arguments prosecutors plan to make, according to the report.

Judge Roger T. Benitez of the U.S. District Court for the Southern District of California had dismissed charges of honest-services fraud and conspiracy against former pension system administrator Lawrence Grissom; former system lawyer Lorraine Chapin; and former board members Cathy Lexin, Teresa Webster, and Ronald Saathoff, the former leader of the city firefighters union, ruling that the law – intended to prohibit officials from depriving citizens of their “intangible right” to honest services – was unconstitutionally vague here, because the five defendants could not have known or suspected that their conduct was violating the law (see Federal Charges Dismissed for Former SDCERS Officials).

Prosecutors alleged the five defendants took a wide variety of actions and received a wide variety of benefits when they decided in 2002 to put less money into the pension system than was required.  The pension underfunding ultimately produced a $1.4 billion deficit – since reduced – and also caused a variety of financial and budgetary woes.