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What do you get when you cross Little Mary Sunshine with the Abominable Snowman? You get an email newsletter named Wolverine Network, sent to a list of prominent San Diegans, some still powerful. The publisher is John Kaheny, who as the second-highest official in the city attorney’s office advised the San Diego City Council in 1996 when it increased pension benefits and decreased pension contributions — a move that started the City on the way to financial perdition. Kaheny did not tell the council to reject the deal, charges City Attorney Mike Aguirre. Kaheny says he was in no position to do so. Their mutual contempt grew. Kaheny, after retiring as Chula Vista’s city attorney, is running this newsletter that drips with both pathetic naïveté and seething hatred.

Get this: on May 5 of this year, Kaheny sent to his network some opinions penned by a Wolverine member. The member wailed about the “false theories of bankruptcy and the pension ‘crisis.’ ” By putting the word crisis in quotes, the Wolverine correspondent was saying the pension debacle was fabricated. This is a conclusion that one investigator after another has thoroughly rejected. Opined the writer, “No one in City hall had ever uttered the word bankruptcy in a meeting.” (Is that a surprise?) The Wolverine Network writer went on to bemoan “the savage raid on San Diego’s good name and reputation…orchestrated, manipulated, and fueled by Shea, Shipione, Lam, and Aguirre’s greed.” (That’s lawyer Pat Shea, pension whistleblower Diann Shipione, former U.S. attorney Carol Lam, and Aguirre, the main target of the Wolverine Network’s venom.)

By now, most San Diegans know that in 1996, the council and pension board voted to increase pension benefits and decrease funding. The idea was to raise money for the Republican convention, which was to be a vehicle to tout then-Mayor Susan Golding for higher office. Then the council went on to add more pension goodies for employees and stated that if the pension ever got below 82.3 percent funded, the City would have to kick in more money. By 2002, it was clear that the pension deficit would be crashing through that 82.3 percent safety net. So in 2002, the council and pension board voted to ignore that threshold — and further boost benefits to appease the labor unions. Shipione, a member of the pension board, complained loudly, calling the move “almost corrupt.” Two years later, the pension fund was not even two-thirds funded.

Shipione pointed out that the City was putting false information about the pension deficit in its bond prospectuses. When Aguirre got into office, he wanted to see the wrongdoers punished. The Wolverine Network lamented that the bad publicity began with “Pat Shea and his Bush/Republican/back east NY Times connections.” Ulp! Such nonsense. Any number of publications cocked an eyebrow at the San Diego scandal: The Wall Street Journal, Fortune, Forbes, Business Week, the Financial Times, not to mention local publications including the Reader, Voice of San Diego, and even the Union-Tribune. The book While America Aged: How Pension Debts Ruined General Motors, Stopped the NYC Subways, Bankrupted San Diego, and Loom as the Next Financial Crisis, by best-selling author Roger Lowenstein, devoted several excellent chapters to San Diego’s scandal. Some investigative entities spent months studying what happened: Kroll Inc., the Securities and Exchange Commission, accounting firm KPMG, the district attorney, the U.S. attorney, as well as Aguirre. Importantly, the media and investigative entities in essence came to the same conclusion: fraud was rampant as the City cooked the books, drained the pension fund while raising benefits, and concealed the illegal activities from the citizenry and bond investors.

But John Kaheny still doesn’t get it. Consider his statement of January 26 of this year: “Granted some things went very wrong in 1996 and 2002, but they could have been easily fixed by real changes until the Emperor [Aguirre] decided it was better to have a witch hunt and a lynching party.” Kaheny is saying that the politicians and bureaucrats of San Diego, blessed as they are with high intelligence and impeccable personal integrity, would have smoked out the pension deficits, honestly addressed them, and set San Diego’s books in order — presumably keeping the populace and bondholders completely informed. If you believe that, you should see a psychiatrist — immediately. You are too gullible to be walking the streets or opening emails from Nigeria.

But Kaheny thinks Aguirre should see the psychiatrist. In his writings, Kaheny refers to Aguirre’s “paranoid mind (or what’s left of it).” He says that Aguirre is “seditious against his clients.” Seditious?

Now, who receives these emails? Kaheny says the list originally went to friends and alumni of the city attorney’s office. The list “grew by word of mouth.… No one is on the list who has not asked,” says Kaheny. The Reader was able to get the Wolverine Network list. To be sure, being a recipient of an email doesn’t mean one believes all the contents. But of the more than 500 recipients, most appear to be San Diegans who, pathetically, believe that the City is clean and its critics are wrong. Of course, Jan Goldsmith, the establishment toady opposing Aguirre in the upcoming election, is a member of the Wolverine Network. Not surprisingly, the former bureaucrats who are under indictment in the pension fraud are members: Cathy Lexin, Mary Vattimo, Terri Webster, and Lori Chapin. Other hate-mail recipients are ex-bureaucrats cited for wrongdoing by the Securities and Exchange Commission: Ed Ryan, Pat Frazier. And those criticized in the Kroll report: councilmembers Scott Peters and Jim Madaffer and former city manager Jack McGrory.

Getting the hate messages are Mayor Jerry Sanders aides: Kris Michell, his political manipulator; Jay Goldstone; Greg Levin; Maureen Stapleton; Patti Boekamp; along with his former real estate czar, Jim Waring, who left in a hurry. There are former councilmembers: Michael Zucchet, Barbara Warden, Judy McCarty, Harry Mathis (the last three approved the 1996 deal and Zucchet approved the 2002 arrangement). And officials of the pension system involved in the controversies: Keith Enerson, Doug McCalla, Fred Pierce, Roxanne Parks. And Bruce Herring, former deputy city manager who retired at age 56 at $144,000 a year. And former officials of the city attorney’s office who ran for Aguirre’s job, Leslie Devaney and Deborah Berger. And former district attorney Paul Pfingst, who was instrumental in getting Padres majority owner John Moores off the hook after he showered gifts on a former councilmember. And Tom Story, former top city bureaucrat who became an official of the notorious Sunroad, and his lawyer, Pam Naughton, along with Sunroad lawyer Steven Strauss. And, of course, establishment darling Alan Bersin and Sheriff Bill Kolender.

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Anon92107 Oct. 29, 2008 @ 12:25 p.m.

Great documentation of San Diego Corruption Politicians Inc. Don.

This really should have been the cover story for this pre-election edition, with pictures of corrupt politicians and judges like Sanders and Goldsmith et al. displayed on old west style Wanted posters.

Would have been nice to show Aguirre in contrast as the lone San Diego High Noon style Lawman who is out to rid San Diego of the corrupt Wolverine politicians and judges who have caused so much death and destruction already with no end in sight.


politicalsanity Oct. 29, 2008 @ 12:37 p.m.

What is amazing is that none of the so-called legitimate news stations either can or will cover the amount corruption inherent in our political machines.

Thanks for the list, Don. It will be kept and compared to the endorsement list of various candidates and issues. If any of these names appear on the endorsement sheet, that will ensure my vote against it.

There was an old saying (paraphrased) that a man is known by the company he keeps. That being said, being one of the Wolverine Network means that you are NOT a standup citizen and should NOT be considered for public office.


SanDiegoParrothead Oct. 29, 2008 @ 1 p.m.

"Bill, Dan, Tim, and Mark Mitrovich, whoever they are."

more of the same ...

Tim & Mark - sons of George Mitrovich, founder City Club of San Diego; TIm is Senior Information Technology Specialist at United States Senate; Mark - executive director city club of san diego

Dan - incumbent, Valle De Oro Planning Group back in '97, he and Linda Brannon closed escrow on the former Police Officers Association building at 619 Kettner Blvd. at Market Street, paying $950,000; back then, owned public affairs firm, Solutions Strategies Inc.,

Bill - retired teacher


Justice4all Oct. 29, 2008 @ 1:43 p.m.

While many on the list and recipients ar worthy of indictments on various issues (Ed Ryan, the Pension 6, Tom Story, Steven Strauss, Bruce Herring, etc.) I dont know if everyone on the list should be bunched in.

Tom Blair at San Diego Magazine for instance has run several stories on the pension scandal without establishment angles or any agenda.

As for Chris Reed at the U-T, not sure what his story is but his slanted reporting is right up there with The National Enquirer.


JohnnyVegas Oct. 29, 2008 @ 3:42 p.m.

Jack McGrory said that if the pension dropped below the 82% threshhold the City would simply make a "ballon payment" of $25 million to move it above the threshhold. No problem he said.

That whopper belongs right up there with the "Iraq war will pay for itself" with the oil reserves line. That "ballon payment" turned out to be $500 million, or a factor of 20 above Jack's BS line.

Jack McGrory is lucky he is not in prison, in fact if he did in the private sector what he did in San Diego government he would be in prison.

Ed Ryan is about 2 steps behind Jack in culpability for the financial mess.

As for Carl DeMaio's comment that the retirement system may face bankruptcy-it is a foregone conclusion IMO.

Even if Mike Aguirre prevails on the 1090 pension lawsuit I think we will only have a 50/50 chance at avoiding BK.

We are just TOO FAR behind the 8 ball now. KFC Sanders did NOTHING about the 90% pensions at age 50, and those are simply NOT sustainable- with or without Mike winning the 1090 lawsuit.

BK is coming, I guarantee that.

Sanders won't file on his watch, he will just pass the buck while San Diego's deficits grow bigger and bigger.

Bottom line, BK is coming, the only hope to ecape BK is Mike winning the 1090 lawsuit and even then it will still be a 50/50 shot at BK and going broke.


Rick Oct. 29, 2008 @ 11:44 p.m.

.....check out District 3...Gay Smear....Gay Politics...Scarey...."CLAWGATE"........Rick Wilson....Hillcrest.....


JF Oct. 30, 2008 @ 8:26 a.m.

Interesting story, Don. But I'm not sure I agree with your assessment about the list. I often disagree with what you have to say, but I still read your posts.

I'm not so sure that DeMaio will end up on the hit list. Go look at the list of his campaign donors. Most are downtown business interests. I wonder what they have to do with his district up in Rancho Bernardo?

Mike Conger is the lawyer behind the Corbett settlement, which created 3% at 50. (I'm still waiting for Johnny Vegas to read the settlement and admit that) However, he's also the lawyer behind settlements (McGuigan) requiring the city to pay more into the pension system.


JohnnyVegas Oct. 30, 2008 @ 10:48 a.m.

Mike Conger is the lawyer behind the Corbett settlement, which created 3% at 50. (I'm still waiting for Johnny Vegas to read the settlement and admit that) However, he's also the lawyer behind settlements (McGuigan) requiring the city to pay more into the pension system.

The "settlements" are not going to be worth Jack Sheet if the City files BK JF.

BTW JF-Rio Vista, about 20 miles form Vallejo will ALSO be filing BK. As this depression carries on and more and more muni's get behind the 8 ball, the more BK's we will see.

BTW-San Diego' penion, ccroding to newly released information is between 50%-60% funded.

"US - City attorney Michael Aguirre has claimed an email from a San Diego City retiree shows the managers of the city's pension system knowingly overvalued pension assets in official documents.

The attorney’s office said managers of the pension system were aware it suffered an additional US$300m in stock losses, resulting in a total asset value of $3.92bn as of 14 October 2008.

It added the funded ratio of the city’s’ employees’ system would be at the lowest level ever, between 50-60%, if the $3.92bn figure was accurate."


Orange County has lost $1 biliion in the last 90 days of their $6 billion dollars pension funding, which has liability of $8 billion dollars;

Our retirement system has experienced 12.5 percent in losses since January 1. A 12.5 percent reduction of an $8 billion portfolio represents a loss of $1 billion. (Translated: Our unfunded liability was $2.7 billion, it is now $3.7 billion.)



Fred Williams Oct. 30, 2008 @ 11:16 a.m.

Have you seen Todd Gloria's smear against Stephen Whitburn?


It's really insulting. How can anyone believe this trash at this point in the election.

I think it's just blown up in Gloria's smug face. Now everyone is talking about how much Gloria is taking from the developers, including Sudberry who helped pay for this attack mailer.

We live in interesting times, my friends.

Let's help elect Stephen Whitburn to City Council and Change San Diego.


JohnnyVegas Oct. 30, 2008 @ 11:22 p.m.

Dont forget the unfunded retiree healthcare. Add another $1.3 Billion to that $1.1 Billion unfnded pension.

I imagine with the huge stock market downturn those unfunded numbers are MUCH higher now.

San Diego's pension fund has lost 800 million this year.

The fund is currently at 50-60% of full funding.


Anon92107 Oct. 30, 2008 @ 12:22 p.m.

Yesterday Sanders decreed decimation of the police and fire departments’ public safety budgets. This is even after his criminally negligent acts of failed leadership during his 2007 firestorms where he failed to coordinate the fire resources we had at the time and directly caused excessive death and destruction as consequences.

Instead of providing leadership, Sanders and other U-T Wolverine puppeticians held frequent photo-ops during the firestorms and thus committed high crimes and misdemeanors as documented in: “County had no voice in firestorm meetings” http://www.signonsandiego.com/news/metro/20080312-9999-1n12meeting.html

Sanders is most certainly taking Murphy’s “Worst Mayor In America” title to a new low thanks to our failed courts that continue to overrule Aguirre’s efforts to protect the public from U-T Wolverine puppeticians’ larceny with the consequential threats of out of control public safety failures we are experiencing due to budget failures they have created with their larceny.

How much more are the voters of San Diego going to put up with of U-T Wolverine court supported larceny that is destroying public safety in San Diego?


JF Oct. 30, 2008 @ 2:17 p.m.

You did say Aguirre is a "Certified Fraud Examiner", didn't you? Then he should know that the CAFR that was certified was the 2007 CAFR -- for the FY ending June 30, 2007. He's jumping up and down screaming fraud -- that's all the board did was certify that the CAFR was correct as of that date. Of course the fund has dropped since then. As Aguirre said of his own budget, "Who knows, it's a moving target". Funny how he can't keep track of his own budget, but fancies himself the expert on the pension system.

The unfunded liability was $1.1 Billion on that date, not 2.7 Billion.

What you don't seem to realize, is that the system is in it for the long term. Yes, it's dropped now, but it will come back up in the long run. Heck, I couldn't pay my mortgage off cash tomorrow, but I will pay it off when it's due.


JohnnyVegas Oct. 30, 2008 @ 3:11 p.m.

Heck, I couldn't pay my mortgage off cash tomorrow, but I will pay it off when it's due.

By JF 2:17 p.m., Oct 30, 2008

Yes, but your mortgage is at a fixed rate for a fixed period of time-it does not change, go up exponentially or flucuate with the market, which the pension does, with every retroactive raise.


Justice4all Oct. 30, 2008 @ 3:39 p.m.

Dont forget the unfunded retiree healthcare. Add another $1.3 Billion to that $1.1 Billion unfnded pension.

I imagine with the huge stock market downturn those unfunded numbers are MUCH higher now.


JF Oct. 30, 2008 @ 6:02 p.m.

The pension deficit changes minimally with retroactive raises in retirement benefits. Let's look at the situation now. Everyone who retires right now contributed at the new rate for MP1 benefit for 1/3 to 1/2 of their career. And that's only 12 years into MP1. That percentage will go up as the years go by. By the time I retire, I will have contributed at the updated rates for most of my career.

What is important is the assumed rate. You're using a few months of bad returns to try to eliminate the whole system. But that's not how it works. Once again, those losses are spread over many, many years. The 10 year average of SDCERS is around 10%, though that may be lower now. Nonetheless, the system isn't going broke. Incidentally, the board lowered the assumed rate recently to better reflect current reality.

Justice, retiree healthcare is funded -- the bills are being paid. However, there is a better way. The mayor set aside a chunk of money in this year's budget ($25 million) to start building a fund which will eventually pay for retiree healthcare. It will be a slow process, but eventually it will be funded. I'm not adverse to kicking in some ourselves, but I don't think you'll see the union agree to that.

I imagine those numbers are much higher as well, at least the retirement system underfunding. But these are volatile times. I also imagine that at some point it will turn around and we'll see huge gains.


Burwell Oct. 30, 2008 @ 8:13 p.m.

At the present time the Dow is at least 50% overvalued, and is fairly valued at around 4,500. Solid stocks with good track records should sell for no more than 6 to 8 times earnings. Stocks with exceptional track records and prospects should sell for no more than 12 times earnings. Current stock pricing is out of whack and is going to recalibrate to historical P/E ratios. The Dow will decline to about 4,500 within the next year. It will take at least 10 years to reach the 8,000 level again. The DJIA lost almost 60% of its value in 1973 and did not reach 1973 levels until 1985. The city pension fund will go broke long before the Dow recovers from the 2008 crash.


JohnnyVegas Oct. 30, 2008 @ 11:28 p.m.

The pension deficit changes minimally with retroactive raises in retirement benefits.

JF, where do you get this nonsense from?? Sometimes I wonder if you're for real.

Retroactive pension increases add hundreds of millions of pension liability with the stroke of a pen. It added $500 million to Orange County's pension liability. I would hardly call half a billion as "minimal". The retroactive increases caused two MAJOR problems;

1) It created a HUGE multi million/billion dollar short fall instantanseously, and

2) It caused huge numbers of public safety to retire at an ealry age when public safety was not prepared for it.


Anon92107 Oct. 31, 2008 @ 3:18 a.m.

You know, while The Reader and Don Bauder give us a great place to discuss current events, what we prove above all else is that No One Gives A S***, not in San Diego nor throughout America. Indeed, that’s the bottom line for American Democracy today, at least not until we really, really get ourselves into one hell of a lot of trouble.

We have no one to blame but ourselves, because after all this is a Democracy, so now it is time to face the consequences of our own failures to accept responsibility and accountability.

The first Democracy began as an attempt to prevent the rest of us from overthrowing the powers that be who were taking advantage of us in Athens BC. Yet we are still letting the PTBs take advantage of us, and nothing changed except our toys.

Indeed, humanity has not evolved at all since Athens BC.


JohnnyVegas Oct. 31, 2008 @ 9:15 a.m.

We have no one to blame but ourselves,

Sorry, but I cannot take the 'we" blame.

I have railed agaist the biggest and most abusive scams-and if not for dirty politicians on the take and public unions bribing said politicians then we would not be in this mess.


inactive Oct. 31, 2008 @ 10:26 a.m.

15: The Dow will decline to about 4,500 within the next year. It will take at least 10 years to reach the 8,000 level again."

Whatever you're smokin, I think you need another bowl.


Anon92107 Oct. 31, 2008 @ 11:14 a.m.

Response to #19:

Our worst failure is allowing a corrupt judiciary to destroy our education system by overthrowing the Rule of Law with criminally arrogant impunity and the result is a NOGAS electorate that allowed a firestorm celebrity like Sanders to be re-elected BuffoonMayor even after the excessive firestorm deaths and destruction he caused because his total failures in leadership.


Visduh Oct. 31, 2008 @ 11:26 a.m.

Back to the smear of Aguirre. (These comments do get into tangential issues, don't they?) Just because someone is receiving the email newsletter he/she may not share the beliefs. In fact, Mike should get on the list himself so that he'll know of the things being said about him as soon as they are released.

Don't assume that all the recipients are anti-Aguirre. I suspect that more than a few of those "establishment" people are really rooting for Aguirre, although they dare not say so publicly. That could be true of the figures from the 80's and 90's who really were, in their own way, trying to do their best for the city and region.

It's just too bad that Mike's worst enemy is often his own mouth.


Anon92107 Oct. 31, 2008 @ 12:04 p.m.

Response to #22:

OK, no one is perfect, but if you had to deal with a corrupt judicial system like Mike does having one of the most corrupt judges in San Diego like Goldsmith shoved in your face, plus a NOGAS electorate, we might all get a little more than irked once in a while.


Anon92107 Nov. 4, 2008 @ 12:09 p.m.

It appears that Smear Machine is a NOGAS issue.


inactive Nov. 4, 2008 @ 12:34 p.m.

Actually, I believe Anon92107 is a non issue.


Don Bauder Nov. 4, 2008 @ 1:09 p.m.

Response to post #1: Both Aguirre and Donna Frye are elected officials fighting corruption. Best, Don Bauder


a2zresource Nov. 4, 2008 @ 11:39 p.m.

Thanx for naming the names.

The ONLY reason I have for seeing our City Attorney not getting re-elected is that I know some people who just might have a job for him... something that Mike might like.


Russ Lewis Nov. 4, 2008 @ 11:58 p.m.

Fumbler, tell us how you became such an authority on other people's motives.


MsGrant Nov. 5, 2008 @ 7:48 a.m.

Fumbler is a d-bag. Quit lowering to the bait. All of you.


JohnnyVegas Nov. 5, 2008 @ 8:16 a.m.

Fumbler is a d-bag. Quit lowering to the bait. All of you.

By MsGrant




JohnnyVegas Nov. 5, 2008 @ 8:21 a.m.

The ONLY reason I have for seeing our City Attorney not getting re-elected is that I know some people who just might have a job for him... something that Mike might like.

By a2zresource

Wow, cough up the 411!

BTW, since Mike lost I am going on record today, right here right now = San Diego will never be able to dig out of the unfunded pension and retiree healthcare liabilities and will file BK, sooner or later.

It is now, at this point, a preordained conclusion.


Portofinoan Nov. 5, 2008 @ 8:49 a.m.

Don...When the new Obama administration takes office in January, 2009, I was wondering whether you think they might take criminal/civil actions against San Diego officials responsible for the pension-fund debacle?

This might help to make up for the loss of Mike Aguirre.


JohnnyVegas Nov. 5, 2008 @ 3:37 p.m.

johnny vagASSMUNCH you have been spouting this same drivel forever so now you are going to go on record?...what was it before, just whimsical statements?..im an idiot? BUH-BYE mikey.....atoshebarfsource has a job for mikey....suing the voters next ill bet.

By fumber == =======================

As has already been posted;

"Fumbler is a d-bag."

And Fumbler, you have "cut and pasted" your Fred Williams parody 6 different times now-give your poor keyboard a rest-we have seen it already-it does not keep getting "funnier" everytime you "cut and paste" it.


JohnnyVegas Nov. 5, 2008 @ 3:39 p.m.

When the new Obama administration takes office in January, 2009, I was wondering whether you think they might take criminal/civil actions against San Diego officials responsible for the pension-fund debacle?

Too late. Limitations period has run.

BK is the only option left for San Diego.

We are "Enron by the Sea", or "Vallejo of the South", either Title fits us perfectly now.


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