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SD Spends $7 Million on Legal Fees in Pension Debacle

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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