Baseball Crank
Covering the Front and Back Pages of the Newspaper
January 9, 2006
BUSINESS: Pension Scandal in San Diego

Public pension fund corruption surfaces again, this time in San Diego:

A federal grand jury indicted the former top executive of the San Diego pension system, its lawyer and three former trustees on conspiracy and fraud charges yesterday in the opening salvo in the federal government's latest corruption probe at City Hall.

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Lawrence Grissom, the former administrator of the San Diego City Employees Retirement System, and Loraine Chapin, the system's general counsel, were indicted along with firefighters union president Ronald Saathoff, former city human resources director Cathy Lexin, and former acting city auditor Teresa Webster.

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The indictment said the defendants conspired to illegally obtain enhanced retirement benefits for themselves - in one case as much as 35 percent higher - in exchange for allowing the financially strapped city to underfund the pension system.

And, the indictment said, they did so in secret, concealing information from other pension board members and the public.

The form is different this time - usually, the corrupt administrators of these big pots of money get in trouble for investing it with their cronies, maing politicized investment decisions or selling the opportunity to manage public pension money to the highest bidder. But the underlying problem is the same - all that money under the influence of just a few people, rather than distributing control over investments to the people who benefit from them. Until that structural flaw is repaired, it will be exploited by the unscrupulous.

Posted by Baseball Crank at 8:45 AM | Business | Comments (0) | TrackBack (0)
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