Lawyers for six past and present members of the San Diego pension board charged with violating conflict-of-interest laws counterattacked yesterday, arguing in court papers that the charges were legally insufficient and should be dismissed.
In a trio of motions, the lawyers said the case mounted by District Attorney Bonnie Dumanis is flawed on a number of grounds. Those grounds, the attorneys said, include:
The City Charter, which requires city employees to sit on the retirement board, legally protects those employees from conflict-of-interest charges.
Pension benefits are considered to be salary, and the conflict-of-interest law the defendants are charged under specifically exempts public officials from violating the law when casting votes on contracts involving salaries.
The defendants did not have an illegal financial interest in the controversial agreement at the heart of the pension fund debacle – a 2002 city proposal known as “MP2” that allowed the city to continue to underfund the pension system. Lawyers argued that MP2 dealt only with “employer contributions” and did not enhance benefits for city employees.
Prosecutors, who said they have yet to review the legal papers filed yesterday, declined to comment. They will file responses in two weeks, in preparation for a hearing Aug. 29 before Superior Court Judge Frederic Link in the high-profile case.
On May 17, Dumanis filed charges against six former and current members of the San Diego City Employees Retirement System. They are Ronald Saathoff, president of San Diego City Firefighters Local 145; John Torres, vice president of the city’s largest labor union, the Municipal Employees Association; and city employees Cathy Lexin, former director of human resources; Mary Vattimo, former treasurer; Terri Webster, former acting auditor; and Charon Wilkinson, management analyst.
Lexin was charged with two counts of violating the state conflict-of-interest law; the five others face three counts each.
The charges allege they broke the law by casting votes in 2002 on a city proposal to continue underfunding the pension system – whose funding level had precipitously dropped as a result of stock market losses and other factors – in exchange for boosting employee benefits.
The deal, the prosecution alleges, ended up enhancing the retirement packages of the defendants. The conflict-of-interest law bans public officials from making contracts in which they have a financial interest.
However, Frank Vecchione, the lawyer for Webster, attacked that central theme of the case in a motion that seeks to dismiss the charges against all defendants.
Vecchione wrote that MP2 was a contract between the city and SDCERS that dealt with the rate at which the city would make its contributions to the retirement fund. It did not discuss any “employee benefits,” so MP2 was not a contract under which any defendant had a financial interest, the attorney argued.
While the City Council in December 2002 passed an ordinance increasing pension benefits for all city employees, that was a contract between the council and the unions, Vecchione argued. The pension board was not part of that agreement or the council votes.
Prosecutors have contended there is evidence showing the vote by the San Diego City Employees Retirement System on MP2 was linked to the package of benefit increases.
Vecchione also argued that pension benefits are considered salary under the law and therefore outside the reach of the conflict-of-interest law. He cited court cases, an opinion by the state Fair Political Practices Commission and an August 2003 legal memo from then-City Attorney Casey Gwinn to the council concluding that votes on pension benefits presented no conflict.
Two other motions in the case challenge how charges are drafted and contend they are legally insufficient. One motion from Jane Hahn, the attorney for Vattimo, contends her client can’t be charged because the City Charter requires city employees to sit on the pension board and Vattimo was “simply fulfilling a job requirement established by the charter.”