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Tuesday, February 14, 2006 | For two decades, no one person in City Hall has had more influence or institutional knowledge than the man at the heart of the state and federal criminal cases sprouting out of San Diego’s pension crisis.
Ron Saathoff took control of the firefighters union in the early 1980s and turned it into a political powerhouse, along the way earning the reputation of being the fiercest of negotiators and the sharpest of political minds.
Today, he stands accused by two different teams of prosecutors of using those two hard-earned skills to manipulate the system and enrich his own personal finances, a charge his attorney and supporters deny.
The pension scandal that has engulfed city finances and city politics has taken down nearly every person that it has touched. Gone are a once-loved mayor, two city managers, an entire layer of top city management and a whole batch of pension trustees. Some have even picked up and moved from the region and the spotlight, landing in places such as Northern California, Colorado and Idaho.
But there’s one man left standing: Saathoff. Last summer he won another reelection as president of the Firefighters Local 145 union as the Justice Department and the District Attorney’s Office prepared criminal cases accusing him of leveraging his official position as a pension trustee and union official to boost his annual pension by between $25,000 and $30,000 as part of a controversial 2002 pension deal.
Despite the criminal charges and deafening public chatter surrounding the pension system, Saathoff by most accounts remains as active and influential as he did before the criminal investigations cast a pall over city business, although in much more of a discreet manner than he did in the past.
“I think it’s safe to say, and most people would agree for good or bad, he still has his nose in every last issue,” said Katie Keach, director of communications for Firefighters Local 145.
He spent last spring in labor negotiations hammering out the new wage-and-benefit contracts that replaced the three-year contracts inked in 2002 that have been at the heart of the pension controversy. The union president still pops up at community events, fire-station openings and even this month at pension board and City Council hearings.
And the firefighters union itself remains a powerful entity come election time. While a number of the city’s labor unions sat out the recent city elections and some candidates purposely steered clear of certain union endorsements, the firefighters union threw its name and resources behind the two eventual winners, Kevin Faulconer and Ben Hueso.
Those two elections illustrate the muscular reach of the firefighters union. At one time or another, the firefighters have supported all eight of the sitting council members. They even endorsed in 2004 the man who has become their boss’ biggest public critic, City Attorney Mike Aguirre. The city attorney’s campaign Web site even featured a photo of Aguirre and Saathoff together.
New Mayor Jerry Sanders is the lone elected official in the city of San Diego who hasn’t been backed by the firefighters union.
That strength and success is tied directly to Saathoff, someone who supporters describe as incredibly bright and dedicated to his members’ cause.
“He has been one of the most recognized figures in and out of City Hall for almost two decades for [not only] his position as union president but also his charm and intelligence,” said Mitch Mitchell, a one-time firefighter union official and former vice president of the San Diego Regional Chamber of Commerce.
A graduate of Point Loma High School and who served in the Special Forces in Vietnam, Saathoff took the helm of the firefighters union in 1981. At age 31, the former fire captain took over what was once a part-time job and made it a full-time position.
In his time, he led the union into an era of prosperity at City Hall and pushed firefighters up the City Hall pecking order to compete at times with the perennial number one on the list, the Police Officers Association.
Many call him the best negotiator in the city, period. Everyone who knows the union leader or has worked across from him describes him first as a fierce or rabid negotiator.
“I’d say that’s putting it mildly,” said Rich Snapper, city personnel director whose run-ins with Saathoff are well-known inside City Hall. “As much as I disagree with him, Ron is a very bright and engaging and persistent union leader. Ron does not ever end his efforts.”
One of the more controversial benefits framing San Diego’s pension crisis was Saathoff’s idea: the Deferred Retirement Option Program, Mitchell said. The benefit has become frequent fodder for critics of the pension system. Over a six year period between 1998 and 2004, the burden of employee benefits on the pension system has more than doubled as the city has granted rounds of pension benefit increases dating back to 1996. At the same time, a pension board filled by a majority of union representatives and city management representations allowed the city to annually pay less into the system than was recommended.
Aguirre has taken to referring to the group of workers receiving the increased benefits as “the Saathoff generation.”
As a result of the two pension deals, struck in 1996 and 2002, the pension system carries a deficit that’s estimated to be approaching $2 billion. The city’s annual payment to this debt has increased considerably in recent years, forcing cuts to basic city services. The debt threatens to consume ever-larger chunks of the city’s annual operating budget for decades to come absent significant reform.
Many blame union greed, political acquiescence and backroom dealing for the pension crisis. Supporters say it was union officials’ jobs to get the most they could for their members.
“His first responsibility was to ask for the world,” Mitchell said of Saathoff. “The system is supposed to keep that in check and unfortunately there are some decisions that are being second-guessed. But Ron didn’t make those decisions, the City Council and city manager did.”
Saathoff’s role wasn’t only to serve firefighters at the bargaining table. He also was supposed to safeguard the pension funds as a retirement trustee. And that’s where the investigations begin.
Prosecutors from the District Attorney’s Office and the U.S. Attorney’s Office say Saathoff indeed did make a number of decisions and that his role in the 2002 pension deal was criminal.
The district attorney’s conflict-of-interest case alleges that six former pension trustees approved a contract that increased their own personal benefits. Prosecutors say that pension benefit increases agreed to between the city and labor unions were only to go into effect if pension trustees voted to give the city relief from a potentially budget-busting payment owed to the pension system.
Five of the six trustees charged saw increases of 11 percent each in their pensions, according to depositions in a related civil lawsuit. However, Saathoff negotiated for himself a special benefit known as the “presidential leave” benefit as part of the deal. The benefit allowed him to combine his salary as a fire captain and a union president when calculating his final retirement check, a detail that prosecutors say gave him an additional $25,000 to $30,000 a year.
Internal e-mails show that city officials felt Saathoff’s support on the pension board for the funding deal was vital.
Internal e-mails also show that the pension system’s attorney and other pension board members didn’t know about Saathoff’s boost when the pension-funding deal was approved by the board – with its attorney’s consent – in 2002. Attorneys both in and out of the pension system have opined that the existence of the benefit could jeopardize the legality of the entire pension deal and lawsuits challenging the benefits are currently working their way through the courts.
Saathoff’s benefit is also the central issue in the U.S. attorney’s case against the union president, two pension trustees and the pension system’s former top two staffers.
Prosecutors allege the five officials worked to create the benefit for Saathoff in order to enact the 2002 pension deal and benefit themselves personally and professionally, all while keeping the existence of the benefit secret from certain pension trustees. The five defendants face a combined total of 20 charges that each carry with them between five and 20 years of prison time.
Defendants in both the criminal cases have pleaded not guilty and their attorneys have disputed the notion that the acceptance of increased benefits had anything to do with their client’s approval of the pension deal.
While he no longer sits on the pension board, Saathoff still is actively involved in city business despite the cloud of criminal charges. Efforts to interview Saathoff for this story were unsuccessful.
“He is still attempting to do the job he is elected to do,” Mitchell said. He said that anyone who has worked as a city employee owes thanks to Saathoff for the benefits he has gained for them.
But not everyone’s thankful, including a band of dissenters in the firefighters union who have gone so far as to start their own Web site in efforts to end Saathoff’s reign. The site features a message board allowing unhappy union members to sound off on Saathoff’s leadership, the pension crisis and the pay and benefit sacrifices they have had to make in attempts to fill the pension deficit.
It was put together by Paul Vandeveld, a firefighter who unsuccessfully challenged Saathoff for the union presidency last summer. Vandeveld didn’t return calls for this story, but his site is essentially dedicated to slamming Saathoff for allowing the pension system’s funding to decline while increasing his own personal take.
“He was OUR elected Representative to the Retirement Board. He had a fiduciary responsibility to make sure that the city contributed and that the fund was run ethically and according to the rules. HE FAILED TO DO THAT!!!! We contributed our share and he let the city skip out on theirs,” he wrote.
Some city officials have also begun to turn a cold shoulder. An official in the Mayor’s Office, who spoke on the condition of anonymity, said Sanders’ staff has declined meet with Saathoff because of the current legal and political climate.
Still, administration officials will likely have to face Saathoff at the negotiating table when the firefighters union returns to negotiate a new contract for salaries and benefits.
“Obviously, as we get deeper and deeper into the pending charges it’s going to be harder and harder to operate with business as usual,” said Mike McDade, a long-time City Hall lobbyist.
Former City Councilman Michael Zucchet knows Saathoff well, and knows his situation even better. Before his election to the council in 2002, Zucchet served as Saathoff’s director of governmental affairs. Shortly thereafter, he found himself the defendant of corruption charges brought by U.S. Attorney Carol Lam.
Zucchet resisted persistent public calls for him to step down and instead increased his profile, working on the Chargers stadium-lease negotiations and serving as deputy mayor – and even mayor for one business day – until he was convicted last summer. (All of his nine convictions have either since been thrown or sent to retrial.)
Zucchet said he was not only able to remain focused on his job, but was more effective because he concentrated so much on his work as a coping mechanism.
“As long as you can be effective, and I think I was and Ron can be, you shouldn’t have to give it up,” Zucchet said. “It’s just fair.”