Legal Fee-For-All

Thursday, February 02, 2006 | As lawsuits, court cases and investigations related to the city’s pension dealings and financial practices press on, former pension officials are bearing the burden of legal fees that have become too pricy for some.

Defendants in similar federal and state pension corruption cases showed up to their arraignments Wednesday, their lawyers in tow – and also apparently a little too well-heeled for their clients’ pocketbooks. During the hearings, three defense attorneys asked to be removed from the case because their clients are having trouble paying their bills.

The city attorney and council members squabbled Wednesday over whether the council’s city-paid bills should be blacked-out when released to the public. The defendants in these two cases, and at least one other former city official, are racking up similar expenses, albeit out of their own pocket.

The five defendants in the federal case pleaded not guilty in a court hearing Wednesday.

Former retirement Administrator Larry Grissom and the pension system’s ex-legal adviser Lori Chapin, defendants in the federal case, began paying their own legal bills after being indicted last month. The six defendants in the district attorney’s case have been footing their own legal bills since being charged last May.

Bob Rose, who represents former trustee John Torres, said his client has incurred more than $250,000 in lawyers fees related to civil lawsuits and the district attorney’s case.

“Mr. Torres has been in breach of his engagement almost from the beginning of the case because of the crushing expense of this prosecution,” Rose said.

Rose asked Judge Frederic Link, who is presiding over the district attorney’s case, to allow him to step down from defending Torres because the bills were too expensive.

Link denied the request. He said he anticipated the defense to challenge his January decision to bring the case in front of a full jury, and further, a possible request to move the case to the 4th District Court of Appeals.

It would be unfair to Torres to have a new attorney tackle a unique case with deadlines for appeals and the jury trial approaching, the judge said.

“I’m concerned that if I let you off, a new attorney coming in will not make that timeline,” Link said.

The defendants in the district attorney’s case are Torres, the white-collar union vice president; former Assistant Auditor Terri Webster; firefighters union President Ron Saathoff; city management analyst Sharon Wilkinson; former Treasurer Mary Vattimo; and former Human Resources Director Cathy Lexin.

The federal grand jury indicted Webster, Saathoff, Lexin, Grissom and Chapin on Jan. 6 for broader corruption charges related to the 2002 pension funding pact.

The federal case focuses heavily on a special benefit for Saathoff that allowed him to combine his city and union salaries when figuring his pension pay. The benefit was approved along the same time as the board voted to forgive the city of a pension payment.

In federal court on Wednesday, attorneys for Webster and Lexin asked federal Judge Leo Papas to consider allowing court-appointed, publicly funded defenders represent their clients in the case. Papas said he wants to review the financial situations of Webster and Lexin before granting them a public defender.

Frank Vecchione, Webster’s attorney, wouldn’t disclose how much he has billed his client, but said the hundreds of thousands of dollars the city has paid to represent some elected officials should be used as a rough estimate.

“And they’re only witnesses,” Vecchione said, referring to former Mayor Dick Murphy and City Council members.

In addition to the criminal cases, the eight defendants and former Deputy City Manager Bruce Herring face legal bills related to two civil lawsuits that City Attorney Mike Aguirre has filed. Some are also involved in the ongoing probe by the Securities and Exchange Commission. Aguirre’s lawsuits aim to roll back pension enhancements that were granted in 1996 and 2002, and the SEC is investigation errors and omissions that were found on the city’s financial statements.

The San Diego City Employees’ Retirement System provided legal defense for the former pension trustees until they were charged by the district attorney in May and for Grissom and Chapin until they were indicted Jan. 6.

In August, a shorthanded City Council failed to approve legal defense for the former city and pension officials in relation to Aguirre’s lawsuits.

Two weeks ago, a judge tentatively ruled that the city must pay those legal fees, citing state law, but Aguirre said he will appeal the decision. The targets of Aguirre’s suits have also been paying to be represented in the case seeking the legal fees from the city.

The arraignment for the defendants in the district attorney’s case was postponed until Feb. 16. Pre-trial motions in the U.S. attorney’s case will be heard by Judge Roger Benitez on March 20.

Please contact Evan McLaughlin directly at