Susan Golding and the council voted themselves juicy pension benefits

San Diego — The City is going to sell a slug of land. What's to keep a councilmember from buying some at a cheap price and later dumping it at a fat profit? Well, there's California Government Code section 1090, which bans public officials at state, county, city, and other levels from having a direct or indirect financial interest in any contract made by them in their official capacities.

Unfortunately, "in the history of 1090, the only community in which it has not been strictly enforced is San Diego," says Mike Aguirre, city attorney. Happily, there are some exceptions: for example, the district attorney is using 1090 to prosecute former members of the pension board who voted themselves fat retirement emoluments.

Although the law is clear-cut, it has been interpreted loosely in San Diego, making way for some shenanigans. For example, on September 12, 2000, then-mayor Susan Golding and the council voted themselves juicy pension benefits, including a reduction of the eligibility age from 60 to 55. Daniel M. Beeman, a former candidate for city council, challenged the move in court. Then-city attorney Casey Gwinn spent the city's money to defend these self-dealt benefits. Hardly surprisingly in San Diego, the suit got nowhere. A year later, the enhanced benefits were extended to Gwinn.

On August 7, 2003, Gwinn's office issued a paper declaring that the mayor and council could vote on measures regarding the San Diego City Employees' Retirement System, even though they could benefit greatly from their votes. The reasoning was tortured: neither a councilmember's salary nor the right to a pension can be called "income," said Gwinn's office. Moreover, the so-called rule of necessity let councilmembers off the hook. This concept, which evolved out of common law, permits public officials to take actions if any disqualification would make it impossible for the body to fulfill its public functions.

This was clearly self-serving sophistry, because there is a legal way for legislators to consider such matters: they can vote on the salaries and benefits of their successors, not themselves. But that's too easy and honest for ethically challenged San Diego.

In spring of 2005, word got around that the new city attorney, Aguirre, was going to reverse the Gwinn rationalization and make councilmembers follow 1090. In April, District Attorney Bonnie Dumanis, aided by Sheriff Bill Kolender and Police Chief William Lansdowne, went to the city council and argued that the city attorney's ability to prosecute misdemeanors should be taken away. It was a naked attempt to shut off his investigation of the pension mess and forestall any attempt to force councilmembers to follow 1090.

On May 17, 2005, Aguirre told councilmembers not to rely on the old Gwinn advice; they should retain their own counsel on 1090 matters. On May 24, Councilmember Scott Peters wrote a panic letter to then-attorney general Bill Lockyer seeking his intervention. The next day, he told Councilmember Jim Madaffer that "Kehoe is writing." Sure enough, that very day, state senator Christine Kehoe wrote to Lockyer, enclosing Peters's letter. She took Peters's position, saying that councilmembers "are being placed in a precarious legal position" and need legal advice.

As a councilmember, Kehoe had voted for the enhanced benefits on September 12, 2000, and had also voted for Managers Proposal I, the 1996 measure permitting the City to siphon money from the pension fund and appease labor unions by raising future benefits -- thus opening the door to horrendous deficits.

On June 3, Lockyer's office wrote back and said it would not intervene. On June 8, Peters wrote again, begging for a reversal. Sure enough, on June 9, Kehoe again wrote to Lockyer, taking up the cudgels a second time for Peters. "As responsible public servants, [members of city council] want to make sure that they are complying with the law, and they cannot wait for the resolution of matters before the court which will not directly respond to these questions," she wrote.

On June 22, Lockyer's office wrote an identical letter to both Peters and Kehoe: sorry, the answer is still "no."

So why did Peters enlist Kehoe to carry his water? The attorney general will respond only to the governor or members of the legislature, says Peters. "Senator Kehoe is my senator, and she understands the need for councilmembers to have reliable legal advice," says he.

And why did Kehoe use her muscle to argue for Peters's case? Says she, "This is a courtesy that I would extend to any elected official or constituent in my district." Oh? She was not just passing on a letter. She was strongly taking Peters's position. Following her logic, if you write the state lottery demanding a winning ticket, she will tell the lottery officials you deserve to be a winner.