Tuesday, July 12, 2005 | San Diego’s pension drama took a turn for the tragic Monday. With the embattled pension board preparing to hold a special meeting on two high-profile pension lawsuits filed against the system and staff last week, news arrived that the assistant retirement administrator, Paul Barnett, had died suddenly.
The board met to discuss lawsuits filed by City Attorney Mike Aguirre last week. The first accused eight current and former pension officials of misusing their official positions to increase pension benefits, and the second laid the legal frame work for sending the pension system into a receivership. In a receivership, the court appoints an independent expert to oversee an entity beset by mismanagement.
Both suits are part of an attempt by Aguirre to void increases in pension benefits granted to city workers in 1996 and 2002 on grounds they were illegally created because of numerous violations of local and state law. The second suit, filed Friday, also would name Aguirre the pension system’s legal counsel and pave the way for the release of long-guarded documents at the heart of a number of ongoing local and federal investigations into the city and the pension system.
The pension system’s $1.37 billion deficit, caused in part by increased pension benefits and a history of inadequate annual contributions by the city, is central to the ongoing fiscal crisis that has attracted investigators from the FBI, U.S. Attorney’s Office, Securities and Exchange Commission and the District Attorney’s Office.
The San Diego City Employees’ Retirement System “is shocked and saddened to announce that our friend and colleague, Paul Barnett, suddenly and unexpectedly passed away over the weekend,” said retirement administrator Larry Grissom at the start of the meeting.
People close to the retirement system said Barnett was in his early 50s and had died of a heart attack, although a public statement by the retirement system didn’t list his cause of death or his age. A death certificate is expected to be filed by the county medical examiner today.
Barnett had served in his post since September 2001 and spent the seven previous years as an SDCERS board member. Before working at the pension system, he served as vice president and manager of Wells Fargo Bank’s institutional investment division.
Barnett is survived by his wife and three children.
“His presence and friendship will be greatly missed by both the staff and the board members,” Grissom said.
Aguirre addressed the pension board before it went into closed session to discuss the two suits. He brought with him a court reporter and asked that the board, like the City Council, allow for a transcript of its closed sessions to be made.
The city attorney claims that the city charter calls for him to be the board’s lead counsel, and that by going into closed session, the board is doing so without the consent of its proper legal advisor. Aguirre claims the board’s current counsel, Lori Chapin, lost the authority to advise the board when he revoked a 1998 memo from then-City Attorney Casey Gwinn that had created two independent attorney positions in the retirement system.
The matter is now the subject of a lawsuit by the SDCERS board against the city and Aguirre.
“Ms. Chapin is not authorized to give you advice,” Aguirre told the board. “… If you go into closed session, you will be going into closed session without proper legal advice.”
Armed with poster boards displaying magnified sections of local and state law, the city attorney told the board it was a misdemeanor to knowingly violate the Brown Act – the state law covering governmental meetings. He told the board that he was authorized under state law to bring misdemeanor charges.
“They are making the closed sessions a rule rather than an exception,” Aguirre said.
Public bodies usually do meet behind closed doors to discuss pending legal matters, and the lawsuits being discussed were filed by Aguirre. But he said a transcript should be made of the closed session hearing in case a judge must one day rule to its appropriateness.
“It may be appropriate for them to have discussions, and it may not be appropriate, but the point is they should have a court reporter in there at this point making a verbatim transcript because one of the concerns I have is that the individuals that are advising them are providing false information,” Aguirre told reporters after the hearing.
Rick Roeder, the pension system actuary, said in a letter sent out Monday that Barnett was “one of the good guys” in the pension saga.
“Paul was deeply bothered by the media frenzy and the half-baked allegations that were too often a part of the city’s pension situation,” the letter says. “I am also sure he was very bothered by those who said that there needed to be a wholesale ‘house cleaning.’”
Aguirre and many of the candidates for mayor have called on replacing the current administration of SDCERS. Likewise, the city’s outside audit committee, Aguirre and many of the candidates have called for replacing Roeder.
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