The Morning Report
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Wednesday, April 26, 2006 | The San Diego City Council balked again at a proposal Tuesday to defend former elected officials after City Attorney Mike Aguirre opined that the current council had to sit out the vote because their interests were too closely aligned with those seeking legal defense.
The council postponed its decision to pay for the legal defense of 11 ex-lawmakers, saying they wanted further time to mull Aguirre’s warnings that they had a conflict of interest in the decision. The proposal will be heard for the third time May 8.
Tuesday’s episode marks the latest confrontation between council members who argue that it’s only fair to provide individuals who are touched by the city’s pension litigation and the maverick Aguirre. The city attorney claims that defending the officials hurts his legal challenge to a series of pension benefit enhancements, as some of the ex-officials helped created the benefits.
Former Mayors Dick Murphy and Susan Golding and several former council members are asking the current council to pay for an attorney to represent them in the city attorney’s lawsuit. Altogether, Aguirre is trying to repeal an estimated $700 million in benefits that were doled out between 1996 and 2002, arguing they were created in illegal and corrupt deals.
After former Councilwoman Judy McCarty asked Council President Scott Peters for an attorney last month, Peters circulated a letter to other former officials asking them if they were planning to request legal defense as well. Peters said it would cost the city less to round up these ex-lawmakers and assign them one attorney rather than allow everyone to be defended by a separate lawyer.
“I thought that was the responsible thing to do,” Peters said.
The other former lawmakers who accepted Peters’ invitation to petition the council are former Councilmembers Byron Wear, Ralph Inzunza, Michael Zucchet, Barbara Warden, George Stevens, Valerie Stallings and Harry Mathis.
The former lawmakers’ own pension checks are at stake in the litigation, which is why Peters extended the invitation some council members who didn’t serve at the time the deals were created, such as Zucchet and the widow of late Councilman Charles Lewis, who died in 2004.
In a legal opinion issued Monday, Aguirre argued that Peters overstepped his bounds as a council member by performing legal work.
Aguirre also opined that it would not be in the city’s best interest to provide a defense for former officials who helped create pension enhancements dating back to 1996 that he is attempting to undo in court. He warned the council members that, as long as they were enrolled as beneficiaries in the San Diego City Employees’ Retirement System, they would have a conflict of interest in approving the legal defense for the former officials who helped create benefits they now enjoy.
The city attorney said the pensioners on the council should sit this decision out, claiming only Councilman Kevin Faulconer could vote on the item because retirement records show that he opted to not join the system.
“Because this vote would potentially implicate the self-interests of all members of the current City Council, council members should recuse themselves from the matter and should not consider it,” Aguirre wrote. “A vote taken to provide funding for counsel to protect the Council’s own self interests – their future retirement benefits in a plan that covers them all – could constitute improper self-dealing.”
Attorney Steven Strauss, who McCarty chose to represent her initially, disputed Aguirre’s argument that the council members were conflicted. He claimed Aguirre’s opinion was meant to “chill and intimidate” the council and was damaging the former officials’ rights.
Legal fees have become almost as contentious an issue as the pension deals themselves, as Aguirre has consistently sought to thwart council decisions to pay legal bills. Former retirement and city officials who are named in Aguirre’s two pension lawsuits were denied funding by the council, although a Superior Court judge later determined that the city must pay their legal bills because of a resolution the 2002 council passed indemnifying that retirement board.
Aguirre wanted to overturn the resolution and revert to the state law, saying that the guidelines for indemnification under state law were fairer than the unconditional defense that was provided by the council in the 2002 resolution. The council denied his request last week.
Each of these pension officials has a separate attorney, and Peters argues that the city will ultimately pay more than if the council had simply provided one attorney for the 10 individuals who are named in Aguirre’s lawsuits. One attorney could learn the case and defend multiple individuals, he said.
Peters said he rounded up the former politicians in order pay one attorney instead of 11.
The retirement system, the lead defendant in Aguirre’s lawsuit, has countered the city attorney’s allegations that former retirement trustees had a conflict of interest in approving past pension deals. In a filing last month, the system claimed that, if the trustees were indeed conflicted, than so are members of those years’ City Councils whose pensions were also upgraded.
The pension deficit is estimated to be at least $1.4 billion and threatens to consume city budgets in years to come. Aguirre aims to halve the deficit by repealing a series of benefit enhancements given to employees and elected officials.
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