Tuesday, January 26, 2010
S.C. Tosses Charges Against S.D. Pension Board Members
By a MetNews Staff Writer
The California Supreme Court yesterday ordered the dismissal of conflict-of-interest charges against five former members of San Diego’s pension board who were accused of personally benefiting as a result of votes they cast on the board.
Overruling the trial judge and the Fourth District Court of Appeal, the justices unanimously ruled that because the five were appointed to represent specific interests on the board, and received no greater benefits than other employees, they were covered by an exception to Government Code Sec. 1090.
“This case turns on our conclusion that the trustees of the City’s retirement system board were not burdened by a conflict of the sort section 1090 prohibits: a division in the loyalties of public servants between the public interests of their constituents and private opportunities for their own personal financial gain,” Justice Kathryn M. Werdegar wrote for the court. “Rather, by intentional legislative design, many of the board’s trustees were members of the retirement system and thus had interests in common with the membership as a whole.”
The jurist explained that “[t]he public services exception to section 1090—section 1091.5(a)(3)—recognizes that financial interests shared with one’s constituency do not present the dangers the state’s conflict of interest laws were designed to eradicate.”
The statute says a board member does not have a prohibited conflict of interest by reason of being “a recipient of public services generally provided by the public body or board of which he or she is a member, on the same terms and conditions as if he or she were not a member of the body or board.”
The court declined, however, to order dismissal of the case against former board member Ron Saathoff. Saathoff, who was president of the city firefighter’s union at the time, may have received a unique benefit as a result of a board vote he cast. Werdegar cited evidence that Saathoff voted to extend to himself a benefit given the presidents of other municipal unions, and which would not apply to anyone else at any time.
The case dates back to decisions undertaken in 2002 to adjust pension benefits upward. With pension benefits rising and the retirement system inadequately funded, the city suffered a financial crisis, which, Werdegar noted, “led to federal investigations of the City’s bond disclosures, suspension of the City’s credit rating, class action lawsuits against the City for underfunding, the mayor’s resignation, and amendments of the City’s charter to change the composition of the board overseeing the retirement system.”
The defendants against whom charges were ordered dismissed are Cathy Lexin, Mary Elizabeth Vattimo, and Teresa Aja Webster, all of whom were ex officio members of the retirement board; and Sharon Kay Wilkinson and John Anthony Torres, who were elected from the active membership of the retirement system.
Lexin was the city’s human resources director, Vattimo was the city treasurer, Webster was the city’s assistant auditor and comptroller, Wilkinson was a city management analyst, and Torres was a fingerprint examiner for the city police department crime lab.
Webster, Lexin, and Saathoff still face related federal charges, the Associated Press reported.
The case is Lexin v. Superior Court (People), 10 S.O.S. 346.
Copyright 2010, Metropolitan News Company