Saturday, October 01, 2005 | San Diego Superior Court Judge Charles Wickersham ruled Friday that one part of City Attorney Mike Aguirre’s legal assault on pension benefits was not going any further in his courtroom.
Wickersham ruled that the architects of retirement enhancements enacted in 1996 and 2002 may have had personal interests in those arrangements but they were not prohibited financial interests under California’s Political Reform Act.
The act, passed in 1974, forbids public officials from participating in decisions that may benefit them personally. Wickersham determined that even if Aguirre could prove that officials of the San Diego City Employees’ Retirement System individually gained from their decisions, the law exempts those who might gain a salary “including pension benefits.”
But as with most developments in the city’s ongoing pension crisis, the significance of Wickersham’s ruling depends on whom you ask.
City labor leaders and representatives of the beleaguered San Diego City Employees’ Retirement System pounced on the news, claiming that the judge’s ruling employed a principle that will triumph in all related legal battles.
“This ruling guts the essence of Mr. Aguirre’s much-publicized legal theory of why certain pension benefits are allegedly ‘illegal’ and must be rolled back,” said Ann Smith, a labor lawyer representing the city’s Municipal Employee Association.
Aguirre and others, however, cautioned that Wickersham was only dealing with a “subsidiary” case – a back-up plan Aguirre had concocted to attack the legality of pension benefits from multiple angles.
And Aguirre pointed out that a criminal conflict-of-interest case brought by District Attorney Bonnie Dumanis against many of the same defendants – but invoking a different state law – was moving forward without delay. The judge in that case, in fact, has already denied a similar pleading to the one Wickersham ruled on this week.
Aguirre also argues, in a separate lawsuit, that the 1996 and 2002 contracts were illegal because while they provided pension benefit enhancements to employees, they didn’t identify a corresponding funding mechanism to pay for them. In fact, the deals allowed the city to actually cut back its payment to the fund.
That, Aguirre claims, violated the City Charter and the state constitution.
And those pending claims made Friday’s setback easier to take.
“I’m not going to go home and feel really good about what happened in court today,” Aguirre said. “But it’s something I expect we’ll prevail on ultimately.”
Attorney Mike Conger settled a class action suit against the retirement system last year, which charged, among other contentions, that the board of administration broke California Government Code 1090 prohibiting officials from making decisions that have a direct financial interest on them personally.
He said that Aguirre’s attempt to use the Political Reform Act, as opposed to the 1090 conflict of interest provisions, was the weaker of the options available to prove the contracts in 1996 and 2002 were illegal.
The judge found that board members and retirement officials enjoyed an exemption to the Political Reform Act. Conger said it will be harder for retirement system officials to argue they enjoy an exemption from the 1090 provisions.
“Section 1090 does have a similar exception as the Political Reform Act, but the exception is narrower and it only applies if the party with a financial interest in the decision publicly discloses that interest,” Conger said.
Until recently, the board of administration of the city’s retirement system did not disclose the financial interests of its members.
Smith, the labor attorney, said they didn’t have to explicitly disclose their interests. City law requires employees with pension benefits to be on the retirement board so it is well known what their interests are in its decisions, she said.
“There was no secret about this and it was spoken about many times by many people including during the debate over [the arrangement known as Manager’s Proposal II] in the summer of 2002,” she said.
And, she added, Judge Wickersham had endorsed a theory that would hold up in the argument about all laws regarding conflicts of interest.
“There is no rational basis for the courts to interpret and apply one ‘conflict of interest’ law a certain way and then conclude that the same type of law with the same policy purpose should result in a felony conviction when the same people covered by both laws take the same action,” Smith said.
Although Wickersham’s ruling only concerned three of the eight defendants of the suit, it was expected to affect all eight: Lawrence Grissom, SDCERS board administrator; Ronald L. Saathoff, president of the city firefighters union; John A. Torres, a San Diego Police Department analyst; Sharon K. Wilkinson, a city employee assigned to Qualcomm Stadium; Terri A. Webster, former acting city auditor and comptroller; Cathy Lexin, former human resources director; Bruce Herring, former deputy city manager; and Lorraine Chapin, the legal counsel for SDCERS.
City Manager Lamont Ewell and Councilman Jim Madaffer used the ruling to denounce Aguirre as “misguided” and “counterproductive.”
Please contact Scott Lewis at