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One again, Diann Shipione, the former whistle-blowing member of the City's pension system, has been proved right and her establishment San Diego critics proved wrong. On September 19, the Securities and Exchange Commission slapped pension adviser Callan Associates with a cease-and-desist order. The regulatory body found that Callan, which recommends money managers to pension funds, had an arrangement with a broker-dealer through which it cold make fat commissions on trades by its pension clients. But, says the SEC, Callan didn't fully reveal this relationship to clients. Back in 2002, Shipione wrote then-Mayor Dick Murphy about this very topic: she wanted to know if Callan was steering clients to this brokerage and not fully revealing the arrangement. Murphy never answered Shipione. The then-head of the pension board denounced Shipione to Murphy. The then-head, Frederick W. Pierce IV, also declared, "the retirement system is operationally and financially sound." Typical San Diego.

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