The state high court agreed in November 2007 to take the case involving six former pension officials accused of violating state conflict-of-interest laws when they voted to boost retirement benefits for all city workers in 2002 and decreased contributions into the city’s system (see CA High Court Takes San Diego City Pension Appeal ). In September 2007, California’s 4th District Court of Appeal gave the go ahead for the case to go to trial.
According to the Union-Tribune, 17 public pension systems have filed briefs urging the court to reject the appellate court ruling, including the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS). Most public pension systems have trustees who are also employees covered by the system, and some systems’ representatives fear boards would seize up if that were altered because of the San Diego case, the news report said.
Former San Diego pension board members Cathy Lexin, Ron Saathoff, John Torres, Mary Vattimo, Terri Webster and Sharon Wilkinson all have pleaded not guilty to charges filed by the San Diego County District Attorney’s Office. Lexin, Saathoff, and Webster, as well as two other former pension system staff members, have also been charged with fraud for making “material misrepresentations” and misstatements about the proposal and about the overall fiscal condition of the city pension system to convince the board to increase pension benefits (see Prosecutors Tack on New Fraud Charges in SD Pension Case ).