An appellate court upheld the district attorney’s prosecution of six former pension board members today, a move that will push the two-year-old case closer to trial.

The ruling, handed down by the Fourth District Court of Appeal, turns the momentum of the prosecution. The conflict-of-interest case hit an obstacle when the state Supreme Court placed burden on the District Attorney’s Office to prove the legal theory behind its prosecution at the appellate level.

The six former retirement trustees — Cathy Lexin, Ron Saathoff, John Torres, Mary Vattimo, Terri Webster and Sharon Wilkinson — were charged in May 2005. The prosecution alleges they violated the state’s conflict-of-interest law for approving an agreement in 2002 that boosted the future pension pay of the defendants and thousands of other city employees in exchange for allowing the city to underfund the pension trust that year. A Superior Court judge ordered the case to trial in January 2006.

But various motions have been made in the meantime, with the most recent being the California Supreme Court’s order. The state’s high court granted the defendants’ request based on their major disagreement with the prosecution: The argument that the trustees’ approval of the 2002 deal is not a violation of the state conflict-of-interest law because retirement benefits are a form of salary, thereby exempting the trustees from prosecution.

That order was one of the brightest signs that the city’s pension controversy was not an issue that would be hashed out in the court. A U.S. District Court judge has hesitated to proceed with the federal prosecution of Lexin, Saathoff, Webster and two other former pension officials until the district attorney’s case moved forward. City Attorney Mike Aguirre’s lawsuit, which seeking to roll back the benefits that were granted in pension deals dating back to 1996, has hit several legal dead ends.

But with Friday’s decision, the state and federal prosecutions appear to be heading forward for the time being.


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