Tuesday, April 26, 2005 | Trace Dick Murphy’s gradual fall from grace back to Nov. 18, 2002.

That day, library supporters packed the City Council chambers to cheer the mayor’s $312 million library overhaul plan. The flagship was to be Murphy’s legacy and one of his coveted 10 goals: a $149.5 million downtown library.

But before Murphy and a council majority blessed the plan, a little-known investment advisor stepped before the City Council and asked that a seemingly mundane pension item be removed from the consent agenda for public discussion.

The consent agenda is a laundry list of general housekeeping items passed through as a bundle without debate. The investment advisor was Diann Shipione. Murphy knew her because he had presided over her wedding; San Diegans would later know her as the key pension whistleblower.

The hushed deal she would vehemently warn against was Manager’s Proposal 2, an agreement struck between the city and the pension board that continued the city’s historic underfunding of its pension system while granting city employees some of the most generous benefits in the state.

The deal aggravated an already-swelling pension deficit that has now reached $1.37 billion and threatens to dominate city budgets for years. It is also the centerpiece in federal investigations into city finances and politics.

After hearing Shipione’s testimony that day, the council voted 8-to-1 to approve the deal, with Councilwoman Donna Frye dissenting.

It was a vote that would change fortunes.

“It is the pension debacle that brought Dick Murphy down,” said Cynthia Vicknair shortly after Murphy announced his resignation Monday. She helped elect Murphy in 2000 as one of his lead consultants but quickly lost confidence in the administration once it took office.

Murphy, who by all accounts is a genuinely nice man, enjoyed sky-high approval ratings in 2002. But along with the public accolades came warnings, both private and public, that the city’s pension system had significant problems. They were problems that Murphy had in no way created. They were problems the city’s 33rd mayor had every opportunity to confront.

The first warnings trickled out of the Blue Ribbon Committee he’d commissioned to study the economic feasibility of his 10 goals, a list of projects that would make San Diego “a city worthy of our affection.”

The committee released a report in April 2002 highlighting the city’s biggest financial worries. Pension issues topped the list. Two letters were sent to the mayor’s office from shipbuilding executive and committee member Dick Vortmann that same month and highlighted his serious concerns about growing pension debts.

“I would suggest the best way you could thank us is to aggressively tackle the very significant challenges inherent in our report,” wrote Vortmann to the mayor after receiving thanks and praise for his work. “Clearly this council did not create these problems, but you have now inherited them. I believe the best service you could provide your constituents would be to implement a comprehensive plan to solve these problems and therefore not push ever larger problems on to your successors, as your predecessors did to you.”

The next month, the first of two warning letters from Shipione would be delivered to City Hall and the mayor’s office. The warnings would go unheeded, pushed aside in favor of the 10 goals Murphy had chosen for his tenure upon taking office.

“He had the chance to step up and say, ‘Look at the mess we were left with,’ and draw up a plan to fix things,” said April Boling, a member of the Blue Ribbon Committee and Murphy’s Pension Reform Commission.

Indeed, the pension underfunding that has led to about $2 billion in total pension debt began in the 1990s, when Murphy still sat on the Superior Court bench. But it spun out of control on Murphy’s watch, and most agree that the disaster that will forever mark his tenure could have been avoided.

Many who originally supported Murphy and worked toward his election saw an underdog candidate who wasn’t going to play politics-as-usual. He was a man who would put principle ahead of political expediency.

Now 62, Murphy began to raise doubts in these supporters as profound fiscal problems were ignored and he stuck with his 10 goals, even when other topics such as housing and water appeared to become more urgent than some of his goals.

As San Diego moved through 2003, it became clear that the pension system was in true disarray. A plan to cure the system’s ills was on the table, Murphy and other city leaders told reporters. But that plan would never come to fruition. Murphy would eventually name a Pension Reform Commission in late 2003 to study the dwindling fund, but it was too late. The system’s billion-dollar deficits had hit crisis level.

Murphy’s style didn’t fit crisis well. He’s known for a judge’s patience and deliberation.

“He was not able to handle both the magnitude and pace of the crises that have hit the city. He wasn’t able to adapt,” said Lisa Briggs, executive director of the San Diego County Taxpayers Association.

If Murphy had begun to lose support and confidence in 2003, it had collapsed by fall of 2004 under the weight of a year of bad news: The Securities and Exchange Commission began its investigation of the city’s financial disclosure practices after the discovery of errors and omissions, the U.S. Attorney’s Office launched a parallel probe of political corruption related to the exchanges made in the Manager’s Proposal 2 deal, and the city’s credit rating had been frozen in light of its struggles.

The mayor sought to deflect blame. Meanwhile, a vacuum of leadership seemed to suck out doubt even from the corners of Murphy’s strongest supporters.

“People really began to wonder if the mayor was watching close enough,” said Mitch Mitchell of the San Diego Regional Chamber of Commerce.

That led to a political shocker: Councilwoman Frye launched a write-in campaign for mayor five weeks before the November election between Murphy and County Supervisor Ron Roberts. Given little chance, she appeared to have won the election, only to have the Registrar of Voters disqualify the 5,000 votes that would have given her the victory because voters didn’t shade the oval next to the write-in space. Murphy won with one-third of the votes. Two lawsuits challenging Murphy’s victory remain pending in appeals court.

The contested election and lack of mandate left Murphy with a win that teetered on illegitimacy. Talk of recall surfaced.

His supporters hoped he would come out a changed man to start his second term in January, ready to tackle the sizable pains that spread during his first term. However, Murphy kept his same judge-like demeanor. He kept away from the media. His ideas and plans weren’t well-marketed or discussed.

City officials were scolded for their lack of cooperation with federal investigators, and the city’s self-investigation and long-delayed 2003 and 2004 audits remained stalled with little public explanation. Murphy appeared enthused, or even interested, in only one subject in the final months of his tenure: the preservation of the Mount Soledad Cross.

Then the final nail was pounded into the coffin: Time magazine last week named Murphy one of the nation’s three worst big city mayors. He stood on his doorstep last Sunday and defiantly told Time it didn’t really know what was going on in San Diego.

But San Diego’s political watchers did, and the pressure to resign mounted last week in the face of another in a line of embarrassing national news stories to touch on San Diego’s pension and political problems.

Despite his struggles, Murphy won accolades for the way he bowed out Monday after the months and months of battering criticism.

“Everyone recognizes Dick Murphy is a good man, and he did what was appropriate,” said supporter and businessman Ted Roth.

Even those who came to be his political enemies spoke well of Dick Murphy as the person, if not always Dick Murphy the mayor.

“People generally like him and admire him as a person, and they should. His decision [Monday] was an admirable thing,” said attorney Pat Shea, Shipione’s husband and a former colleague of Murphy’s at Luce Forward Hamilton & Scripps LLP.

For now, the future of the downtown library appears to be further imperiled. His office needed to raise $27 million in private donations by the summer to make it a reality. The city’s lack of a credit rating has dampened the project’s prospects. In the end, the city’s pension problems could doom Murphy’s downtown library.

Had the Stanford- and Harvard-educated Murphy inherited the city he thought he’d won at the height of the New Economy in 2000, he may have left an entirely different legacy.

“I think in the right time he could have been a great mayor for this city. He was handed a plate full of problems, didn’t acknowledge it quick enough and didn’t start working on it quick enough,” Boling said.

Please contact Andrew Donohue directly at

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