San Diego City Attorney Michael Aguirre keeps up pension crusade

The San Diego Union Tribune reports:

For 3½ years, San Diego City Attorney Michael Aguirre has waged a courtroom battle to take back $900 million of employee pension benefits he thinks were granted illegally.

So far, not one penny has been awarded to the city. But Aguirre marches on and has appealed a judge's firm ruling against him.

He sees his June 3 re-election effort as a referendum on the case: If outraged city voters want him to keep fighting benefits that embarrassed and almost bankrupted the city, they will vote for him.

As poorly as the case has gone so far, that's fine with his challengers. They say it is already a lost cause.

All four of his challengers – Superior Court Judge Jan Goldsmith, private attorney Amy Lepine, and Councilmen Brian Maienschein and Scott Peters – have said the pension problem must be solved in negotiations with city unions, not in a courtroom.

Don McGrath, who as executive assistant city attorney has fought the pension case alongside Aguirre, said it's clear what will happen if Aguirre isn't in office after November.

“If he doesn't get re-elected, where does that go? That'll die,” McGrath said of the case.

Aguirre agreed, but added, “The reports of my death have been greatly exaggerated.”

The pension case stems from a lawsuit filed by the San Diego City Employees' Retirement System to block Aguirre's attempt to become the system's attorney after he took office in December 2004.

Aguirre later countersued to eliminate pension benefits granted in 1996 and 2002 in an underfunding plan that has left the city strapped for cash ever since. He says the benefits are illegal because pension board members violated state conflict-of-interest laws.

The benefits have left the city owing $1.2 billion more than it can pay.

In December 2006, Superior Court Judge Jeffrey Barton ruled that the city, in legal settlements in 2000 and 2004, gave up the right to contest most of the benefits. The decision reduced the amount of benefits Aguirre could go after from $900 million to about $30 million.

Then, in August, Barton ruled that the one-year statute of limitations had expired before Aguirre made his conflict-of-interest argument.

But the city attorney filed an April 18 appeal, citing a new state law that extends the statute of limitations to four years.

“The Legislature clearly intended to apply (the extension) to pending cases such as this one,” Aguirre argued. Barton had previously ruled that the legislation did not affect pending litigation.

Lawyers for four employee groups have until June 2 to respond to the appeal. A hearing is likely to be scheduled for late summer.

The case has been one of several hot-button issues in the city attorney's race and frequently comes up in debates, either directly or in quick jabs at Aguirre.

Peters regularly points out that Aguirre hasn't made even a slight dent in the pension deficit after more than three years of litigation. He typically follows up with the many financial fixes enacted by the council under his leadership.

“That didn't come by suing people, by laying blame. It came from working the problem in a very, very difficult environment,” he said.

Peters has said the council should decide whether to proceed with the pension lawsuits, not the city attorney.

The council doesn't appear eager to pursue the case. Five of the members, including Peters and Maienschein, voted for the 2002 pension deal and have been called “negligent” by independent investigators for their roles in approving financial documents that didn't properly disclose the massive deficit created by their vote.

Aguirre said that the City Attorney's Office was a rubber stamp before his election, and that Peters and Maienschein want to turn it back into that to cover up their mistakes.

Maienschein, who has acknowledged he made a mistake in approving the disclosures, said that Aguirre's “repeated losses on this matter show the courts are not persuaded by his arguments.”

Goldsmith believes the city must negotiate a global settlement of all outstanding pension issues “to stop the bleeding of these costly lawsuits.” He also said the city should have asked state lawmakers to apply the longer statute of limitations to pending litigation. Since that didn't happen, the city faces “a difficult legal hurdle” in its case, he said.

Lepine said she would continue the case if elected but only to attack benefits for individuals who negotiated or voted for the underfunding plan. Striking benefits for former employees who were not involved in the transactions would violate their constitutional rights, she said.

“A lot of time and money have been spent on it, and we should not let those efforts go to waste,” said Lepine, a former deputy city attorney who was part of Aguirre's team of pension lawyers.

The lawsuit has cost taxpayers nearly $1 million, not including staff salaries. The city could also be on the hook for a far greater sum if it loses and the unions seek reimbursement for legal costs.

If re-elected, Aguirre said he has no plans to stop, because if he wins, the windfall for taxpayers would far exceed the legal expenses incurred.

He acknowledges that it took him several attempts to get the lawsuit worded correctly because it is a unique case. He also casts blame on the City Council for not supporting his efforts because the council majority is heavily supported by labor unions.

Aguirre's legal defeats have led his opponents to deride him at nearly every opportunity.

Aguirre criticized Goldsmith at a debate for touting his work as a sitting judge during his campaign. Goldsmith shot back: “I don't blame Mr. Aguirre for not wanting to run against a judge. He hasn't had much success in front of them.”