Monday, January 09, 2006 | When the FBI agents and federal prosecutors lined up behind a podium Friday to announce that they had secured indictments of five players in the great San Diego pension game, there was one barely noticeable reaction.
It came in the form of a simple question: That’s it?
Two years of investigation, uncertainty and speculation and this was all they produced – a 20-count indictment against five mid-level city officials for committing honest services wire fraud? It’s the statute one defense attorney told Voice of San Diego is “the prosecutor’s darling” because it’s indefinable and complex and can be applied, implicitly, when prosecutors can’t prove things like “bribery” and “theft.”
There are two answers to this nagging question about whether prosecutors showed their whole hand Friday: “No.” And “even if they did, it’s still a big deal.”
On the first point – the “no-they’re-not-through-point” – one need only turn to page 11 of the indictment. Look at paragraph 27.
It says “defendants Saathoff, Lexin, Webster, Grissom, and Chapin, and others” (emphasis added) fraudulently devised a plan to modify a funding plan for the city’s pension system. It’s referring to Ron Saathoff, president of the firefighters union, and a former longtime member of the city’s pension board; Terri Webster, the city’s former assistant auditor; Cathy Lexin, the city’s former director of human resources; Larry Grissom, the former administrator of the city’s pension fund; and Lori Chapin, the pension fund’s former general counsel.
Read the indictment over. It says these five “and others” also fraudulently agreed to obtain the notorious presidential leave retirement benefit for Saathoff. It says the five “and others, fraudulently concealed material information about the increased retirement benefits” included in the infamous 2002 dealings.
I don’t imagine that prosecutors put things like “and others” into their indictments without thoroughly examining what those kind of phrases mean.
If these others, as they allege, acted fraudulently, it’s probably safe to assume that they will face the same charges or more at some point. In other words, another shoe is going to drop.
But as we wait to see what that shoe looks like, let’s not forget that the one that fell last week was pretty big itself.
Among those indicted Friday was Ron Saathoff, the president of the city’s firefighters union.
You simply cannot understate how influential the firefighters union – and therefore Saathoff – is to the city’s government. Local politicians have long coveted Saathoff’s endorsement. It was the firefighters who, in 2004, may have single-handedly ended the mayoral aspirations of County Supervisor Ron Roberts.
Roberts was in a thoroughly confusing – but very close – three-way match against then-incumbent Mayor Dick Murphy and write-in candidate Donna Frye, a city councilwoman. But a negative television ad blitz sponsored by the firefighters torpedoed Roberts candidacy and left him in third place. Murphy, who the firefighters supported, later squeaked out a victory.
The fiery City Attorney Mike Aguirre had his candidacy for that position buoyed in 2004 when Saathoff and the firefighters endorsed him.
“Mike Aguirre understands the needs of firefighters, paramedics and emergency personnel, and will work to ensure that resources for emergency services are protected,” said Saathoff, according to a North County Times record of the press conference Aguirre held to announce the endorsement.
Saathoff also added his support to the push for the new strong-mayor form of government – the most drastic reform of the way the city functions in more than 70 years. It passed.
The firefighters spent $140,000 in the 2004 election.
Those kind of endorsements have been important for local politicians – as are the signs that say “Firefighters Support So-and-So for Mayor.” But on Friday, the man who was most responsible for handing them out – along with negotiating on behalf of firefighters and performing a multitude of other functions – faced accusations by the highest of authorities that he committed fraud.
And that he allegedly got $25,000 a year in special pension benefits by doing it.
Saathoff’s attorney, Jerry Coughlan was quick to argue that Saathoff had done nothing wrong and that the U.S. Attorney was trying to criminalize “normal” actions of a public official.
Former U.S. Attorney Bill Brainiff told Voice something similar.
“I think it’s absurd for both the federal and state governments to get involved in this – to prosecute over what is really a political issue,” Brainiff said.
It’s politics as usual, not fraud.
The power and lure of the firefighters’ political endorsement may survive Saathoff’s trials. After all, he’s still the president of the firefighters unions and two candidates running for City Council in Tuesday’s election – Ben Hueso in District 8 and Kevin Faulconer in District 2 – are proud to show off the fact they were endorsed by that union.
But Saathoff’s career influencing the city’s most controversial issues and elections can’t survive the very public exposure of his alleged crimes.
By simply filing the cases she did, U.S. Attorney Carol Lam may have changed the course of San Diego’s politics forever.
Scott Lewis oversees Voice’s commentary section. Please contact him directly at