SD Spends $7 Million on Legal Fees in Pension Debacle
Tuesday, December 23, 2008
The city of San Diego and its pension system have paid close to $7 million dollars so far in legal fees to defend elected officials, pension board members and administrators involved in the city’s long running pension investigations. KPBS reporter Alison St John has more.
The Securities and Exchange Commission has cleared San Diego city’s elected officials of fraud in failing to disclose the city’s billion-dollar pension deficit to Wall Street.
Former Mayor Dick Murphy and city council members, including Scott Peters, Jim Madaffer, Brian Mainenschein and Toni Atkins, can walk away with only the label of “negligent” on their political records. But they cost the city $2.7 million in legal fees during the ongoing investigation.
Meanwhile another eleven city and pension system staff are still embroiled in three federal and state lawsuits that accuse them of charges, ranging from "felony conflict of interest" to "reckless fraud."
The city has poured another $3.6 million into their defense so far, and the pension board has spent $600,00,
The City council voted earlier this year to stop paying the legal bills for 5 city staff, including former city manager Michael Uberuaga.
But the city is obliged to continue to cover legal expenses for indemnified pension board members, including Ron Saathoff of the Firemen’s Union, who are still waiting for verdicts in the state and federal indictments that have dragged on for almost three years.
Alison St John, KPBS News.
Following is a list of legal fees the City of San Diego has paid for city officials involved in S.E.C. investigations and state and federal indictments:
A: Elected Officials called “negligent” by the Kroll investigation
Dick Murphy Mayor until ‘05 $519,000
Scott Peters City council until '08 $631,000
Jim Madaffer City Council until ‘08 $474,000
Toni Atkins City Council until ’08 $570,000
Brian Maienschein City Council until '08 $496,000
Ralph Inzunza City Council until '05 $10,000
Michael Zucchet City Council until 0'5 $6,000
Total $2.7 million
B: City officials charged with “reckless fraud” by Federal Grand Jury, April 2008
Michael Uberuaga City manager $507,000
Patricia Frasier Dep. City manager $402,000
Ed Ryan Auditor $400,000
Terri Webster Dep. Auditor $461,000
Mary Vattimo Treasurer $441,000
City council voted in May not to continue paying their legal fees. The case continues.
Total $ 2.2 million
C: City Officials on the San Diego City Pension Board and Pension Board Employees
Federal Fraud Indictment Feb 2006 U.S. Judge Roger Benitez
( City voted to indemnify all SDCERS board members on Nov 18 th 2002.)
Ron Saathoff Pres Firefighters Assoc $298 thousand
Cathy Lexin Dir., Human Resources $179 thousand
Terri Webster Deputy Auditor (see above)
Larry Grissom SDCERS Administrator ( SDCERS paid
Lorraine Chapin SDCERS general counsel $609 ,000 in total)
D. SDCERS Board members charged with felony conflict of interest by District Attorney
Ron Saathoff, Cathy Lexin, Terri Webster, Mary Vattimo( Treasurer) : see above
John Torres (Police, MEA rep.) $ 780,000
Sharon Wilkenson (city analyst) $ 108,000
Also(not charged) Bruce Herring (Dep City Manager) $38,000
Total of legal costs City paid $6.3 million
SDCERS( City pension system)paid $609 ,000
Grand Total so far paid in legal costs $6. 9 million
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