Tuesday, May 31, 2005 | Ron Saathoff isn’t talking to the San Diego media these days.
The president of the city’s firefighters union has argued before, along with other labor officials, that journalists covering the city’s perpetual pension problem have both over-exaggerated and misunderstood it.
That’s probably not why he’s mum these days.
He’s not talking, obviously, because he’s about to defend himself in court against felony charges that he, and five other current and former members of the city’s pension board broke state conflict of interest laws. Attorneys generally prefer that their clients keep quiet before such trials so as not to inadvertently expose themselves to more scrutiny about what happened.
But “what happened” may not be the biggest issue in Saathoff’s case. What transpired is already pretty clear. Just like the corruption trial currently proceeding against two city councilmen, Saathoff’s case may be most concerned with whether what he did was illegal or not.
Saathoff, after all, hasn’t been apologetic or remorseful about what happened. He’s always defended his actions in 2002, when he and the majority of the trustees of the San Diego City Employees’ Retirement System approved a deal known as Manager’s Proposal II. The deal, like its 1996 predecessor, Manager’s Proposal I, allowed the city to avoid paying a costly retirement bill.
At the same time, the city employees and dependents, who dominated the retirement board, not only delivered a hefty benefit increase to their respective union members, but also themselves enjoyed a nice amelioration to their retirement nest eggs.
One of the last times Saathoff talked about the two deals, he was quite frank.
It was July 19, 2004 and he was talking to the City Council in open session. On the table that day was a proposal to allow voters to end the long dominance of the unions and city employees on the retirement board. The move was put forward by the city’s Pension Reform Committee, which had become concerned about “real or perceived” conflicts of interest among the pension trustees.
Here was Saathoff’s response:
“But for Manager’s I and Manager’s II I don’t think we’re having this conversation. And in both of those instances, the city, in very difficult financial times, came to the retirement board and asked if there was any way, legitimately, that we could provide some form of contribution assistance to the city in their time of financial need. And we said yes. After much machinations, and a great deal of legal review and everything, we said yes. For that, we’re being criticized today.”
However bad it seemed then, Saathoff probably wishes it were only criticism he faced now.
As a result of saying yes to the city’s request for relief, Saathoff boosted his monthly pension by $2,530 – up to $9,704 a month, according to District Attorney Bonnie Dumanis. Other retirement board members benefited to a lesser extent but face the same charges.
According to documents unearthed by the not-so-shy City Attorney Mike Aguirre, Saathoff knew that his and all of the benefit increases were contingent on his allowing the city to skip a massive balloon payment into the pension system.
Several months ago, a labor attorney named Ann Smith, working for the Municipal Employees Association, argued that the benefits were already in place before the city finalized a deal that allowed it to keep shorting its payment to the pension system. The argument that the quid and the quo of the alleged quid pro quo were two wholly separate deals lost more and more steam with every new legal opinion released to the press.
So Smith and others have retreated to another position – that, like the City Council voting itself a pay raise, the trustees of the pension system didn’t do anything illegal.
Now, yet another legal opinion from an outside attorney hired by the city damages that argument. The so-called “rule of necessity” Smith cites doesn’t apply here, the opinion holds, because the board doesn’t have to vote on its members’ own benefits, like the City Council does. And even if it did, the board members didn’t disclose to what degree they would personally profit from their actions.
It’s not the lack of disclosure, however, that got the district attorney’s attention. She more or less alleges that Saathoff traded the best interests of the retirement fund for a couple of thousand dollars extra per month for the rest of his life.
But if Saathoff were talking to the press now, he’d probably still say he did the city a favor. In fact, he’s not the only one.
Councilman Scott Peters, for one, has argued since his re-election campaign that the city had to avoid that balloon payment, that it had no choice and residents expecting city services would have suffered way too much had the city not done the 2002 agreement. And that may be the core of all the present problems – a city that is struggling to discern the line between public service and illegal acts.
It’s at the heart of the corruption trial affectionately known as Strippergate, and it will be the main debate at any trial Saathoff and his five fellow defendants face. Many months ago, Saathoff said that without Manager’s Proposal I and II that conversation would have never come up.
Exactly.
Scott Lewis, a former reporter at The San Diego Daily Transcript, is spending a short time in South Carolina. You can e-mail him at