Tuesday, May 24, 2005 | More waivers. In the course of its investigation into city finances and politics, law firm Vinson & Elkins sought a legal opinion that strikes at the heart of the felony criminal case brought against six current and former pension trustees. The City Council’s attorney-client privilege currently guards that opinion from outside eyes, but the council is scheduled to vote Tuesday on whether to hand over the Luce, Forward, Hamilton & Scripps opinion to the District Attorney’s Office.

“I can’t tell you what that legal opinion is. I will tell you that it is pertinent, relevant and important that it, in fact, be made available,” said City Attorney Mike Aguirre, who has suggested the six pension trustees be given long prison sentences.

District Attorney Bonnie Dumanis filed felony conflict-of-interest charges against six pension board members last Tuesday on allegations they violated California government code section 1090, which forbids public officials from voting on matters that impact them financially.

The six pension trustees – Ron Saathoff, Cathy Lexin, John Torres, Mary Vattimo, Terri Webster and Sharon Wilkinson – are under fire for a 2002 vote to allow the city to pay less into its struggling pension system in exchange for enhanced union retiree benefits. Additionally, Saathoff and Webster received benefit increases more specific to their individual positions, according to pension documents. All six are current or former city employees; their defenders say they were merely carrying out their appointed duties.

The City Council has waived its attorney-client privilege in cooperation with ongoing dual federal probes into finances and politics by the Securities and Exchange Commission and the U.S. Attorney’s Office.

The pension board’s decision to maintain its attorney-client privilege is jeopardizing the city’s fiscal health, the board was told Friday by a cavalcade of city officials. Officials said the city’s outside auditor, KPMG, won’t bless the city’s long-delayed fiscal year 2003 audit until they get access to any documents that the SEC may eventually see.

In the wake of accounting scandals that have tarnished the profession, it is unlikely KPMG would certify an audit if information later discovered by the SEC could question its validity.

All mail, all the time. The city of San Diego has become known nationally for its madcap municipal oddities. One of the highlights: The November mayoral election in which a court eventually decided that more than 5,000 votes for write-in candidate Donna Frye were void because voters failed to shade in the oval after writing-in her name, thereby tipping the election to Mayor Dick Murphy.

On Tuesday, the City Council is scheduled to contemplate shaking up the electoral process a bit in a different manner. City Clerk Chuck Abdelnour proposes an all-mail ballot as a cost-saving measure for the July 26 election to name Murphy’s successor.

In a memo to the mayor and City Council, Abdelnour said such an election is likely to increase voter turnout and decrease costs. The Registrar of Voters estimates the special election will cost between $2 million and $3 million, while the city clerk believes an all-mail ballot will cost about $1.5 million.

The cost savings would come in the elimination of wages, equipment and supply expenses related to manning more than 700 polling places citywide. Plus, the special election is expected to draw a relatively low turnout.

Priscilla Southwell is an expert on all-mail balloting and a political science professor at the University of Oregon. Since 1998, all elections in Oregon have been conducted by mail.

She said all-mail voting increased voter turnout – especially in special elections – and doesn’t favor one party. “It’s really a real level playing field for everyone: liberal and conservatives, democrats and republicans,” Southwell said.

So far, two of the three declared candidates have been relatively silent on the issue.

Frye, a city councilwoman, hasn’t voiced her official stance on the issue yet, while self-financed health care executive Steve Francis didn’t return calls seeking comment.

Former police chief Jerry Sanders said Monday he opposes the measure because voters would be receiving the ballots just four weeks after the filing deadline, leaving little time for voters to decide what he called the most important election in recent San Diego history.

Both Frye and Sanders have also voiced concerns that it will be the fourth different form of voting for San Diegans in four consecutive elections.

To the Victor go the spoils. The City Council approved Monday the appointment of attorney Victor Vilaplana to the Unified Port of San Diego’s Board of Commissioners, a move that raised conflict-of-interest questions by City Attorney Mike Aguirre and other critics.

Five council members voted to install Vilaplana as a port commissioner after Kourosh Hangafarin resigned in March because he made an unauthorized trade pact with Cuba. Vilaplana is a supporter of Murphy and partner in Seltzer Caplan McMahon Vitek, the law firm representing the city’s embattled pension system.

City Attorney Mike Aguirre called the nomination an “insurmountable conflict of interest,” saying it was inappropriate to appoint Vilaplana to a commissioner post while the Port is in dispute with the San Diego City Employees’ Retirement System.

The law firm is also advising the pension system in its decision to withhold documents from federal investigators and in a lawsuit blocking Aguirre from being the pension board’s attorney.

Vilaplana’s nomination was initiated by Mayor Dick Murphy, who has named him to other appointments during his administration. He also serves as a director on the board of the Centre City Development Corp., the city’s agency for redevelopment downtown, and was part of Murphy’s Blue Ribbon Committee on city finances. Aguirre has criticized the Blue Ribbon Committee understating the pension deficit, a charge many committee members – including Vilaplana – blame on city staff.

The appointment wasn’t determined by an up-or-down vote by the council: Vilaplana garnered more votes than Bryan B. Min, a businessman, and Susan Atkins, owner of a communications firm.

Council members Scott Peters, Michael Zucchet, Brian Maienschein, Jim Madaffer and Murphy voted for Vilapalana. Council members Donna Frye and Tony Young voted for Min; council members Toni Atkins and Ralph Inzunza voted for Atkins. The two Atkins’ aren’t related.

The port commissioners oversee the agency responsible for managing San Diego Bay’s shorelines, including two marine terminals, a cruise ship terminal and the nearby public parks. Representatives from San Diego, Coronado, Chula Vista, National City and Imperial Beach make up the port’s board.

CPI’s triple play. The Center on Policy Initiatives will launch Tuesday morning the campaigns of three initiatives the left-leaning think tank will try to put before voters in an upcoming election.

The three policy reforms the organization proposes are designed to address San Diego’s fiscal problems, CPI executive director Donald Cohen said. CPI is proposing that:

– Individuals or companies applying for city business, like a development permit or contract, must disclose their political contributions and any gifts made to the decision-makers or their families. Those interests must be made available to the public before city officials deliberate over the project or contract the person or company is applying for.

– City officials use a full-cost accounting method where all direct and indirect costs associated with a contract or project are detailed before it is approved.

– Pensions are capped at $90,000 per year for management employees; additional benefits would be added into a defined contribution plan like 401-K. This initiative would also bar the city’s retirement system from hiring money managers and investment brokers as consultants because they have a potential conflict of interest in advising the plan to invest in the funds and ventures they represent.

(Such concerns are at the center of an SEC investigation nationwide and have been raised locally by pension whistleblower Diann Shipione.)

Cohen said the measures will keep special interests who now contribute political donations to influence policy at bay, and that the public will benefit from increased access to city information.


Please contact Andrew Donohue directly at

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