Proposal to Pay Legal Fees for ex-SDCERS Officials Fails

January 31, 2006 ( - The San Diego City Employees' Retirement System (SDCERS) board failed to gain enough support to have legal fees for two indicted former system officials paid by the city.

The San Diego Union-Tribune reports that the proposals to offer indemnity to former administrator Lawrence Grissom and former general counsel Loraine Chapin attracted a majority vote of 5-2, but failed to garner the seven positive votes needed for approval.

Three other SDCERS officials along with Grissom and Chapin were charged earlier this month with wire fraud, mail fraud, and conspiracy to commit wire and mail fraud in a 20-count indictment issued by a federal grand jury (See  Five Indicted in San Diego City Pension Case).

Government agencies generally cover the legal expenses of employees in civil cases, according to the Union-Tribune.   The issue can be decided on a case-by-case basis in criminal matters, but paying fees in those instances is rare, city attorney Michael Aguirre said.   Aguirre called the failure to indemnify “the most significant development in the effort to control the pension plan since I’ve been city attorney.”

Attorneys for Grissom and Chapin called on the board to pay their clients’ legal bills while also questioning the strength of the case against them.   Chapin’s attorney described the indictment as “far away from the normal sorts of allegations of public corruption.”