One of the real stinkers of the whole stinky pension mess was this one: Councilman Jim Madaffer in 2001 worked diligently behind-the-scenes to get former Councilman Mike Gotch’s pension increased by nearly 50 percent – ignoring legal and policy concerns – while at the same time lobbying Gotch for millions of dollars in state park grant funds.

Gotch at the time was a top aide to Gov. Gray Davis. We uncovered it last year using Madaffer’s personal e-mails and other documents.

I was interested in seeing where it would end up in the Kroll report. It didn’t.

But after reviewing the interviews the Kroll attorneys conducted with former Mayor Dick Murphy and council members, it’s clear they at least started to go down that investigative path.

They brought up the issue with a number of interviewees. On May 17 of this year, they even asked Dick Murphy about how the resolution that gave beefed-up benefits to all the city’s former politicians was born. (The interview took place eight months after our story ran.)

From the interview summary:

Asked where the idea for this proposal came from, Mayor Murphy believed that Mike Gotch (former City Council member and, at the time of contact, Legislative Aid to Governor Gray Davis) had contacted him about pursuing the retroactivity provision. Mayor Murphy speculated that Councilmember Madaffer may have proposed the January 2002 vote.

That emphasis is mine. It was well known at that point that it was Madaffer that proposed it. These interviews are filled with fuzzy memories and qualifying words like “may” and “speculated.”

But five days later, in the Kroll investigators’ May 22 interview with Madaffer, they didn’t even bring the issue up. No questions. No mention.

However, it’s clear in the questions being asked of Murphy that Kroll investigators had concerns about both the financial impacts and the overall legality of benefits that Madaffer & Crew bestowed upon their forefathers:

Mr. Romano asked Mayor Murphy whether their was any discussion surrounding the January 2002 provision about the potential impact of this benefit increase for former elected officials on the City’s finances. Mayor Murphy could not recall any such conversations and stated that it was probably not discussed. … Mr. Romano asked Mayor Murphy whether anyone on the Council or City staff suggested that there may be a conflict between the [Legislative Officers Retirement Plan] and the City Charter provision.

Why is this issue important? It shows how the pension system became a slush fund for city officials; how insider tradeoffs were conducted with little regard for the public’s interests or the city’s economic well-being; and how the former City Attorney’s Office allowed deals with questionable legal foundations slide through by never issuing formal opinions.

The whole point of giving a pension fund is to attract and retain quality workers. It’s not supposed to become a bargaining chip in stinky little deals.


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