Dishonest Pension Attack: Peters Never Faced Charges

San Diego Council Votes In 1996 And 2002 Set Up City For Underfunded Pension. The San Diego Union-Tribune reported: “San Diego approved deals in 1996 and 2002 to increase worker benefits despite a lack of funds, creating a pension deficit that grew as large as $1.4 billion. The city didn’t properly disclose the problem when it borrowed money. […] The Securities and Exchange Commission has filed fraud charges against five former city staffers involved in the borrowing. The staffers face hefty fines.” [San Diego Union-Tribune, 4/8/08]

In 2002, Peters Voted With San Diego City Council To Underfund Pension System. The San Diego Union-Tribune reported: “In 2002, Peters and his colleagues voted to underfund the city’s pension system while boosting employee retirement benefits — therefore increasing pension liabilities in two ways.” [San Diego Union-Tribune, 10/26/12] 

SEC Charged Five Former San Diego Officials With Fraud Over Underfunded Pensions. The San Diego Union-Tribune reported: “Five former San Diego city officials were charged with fraud yesterday in a federal complaint that says they misled bond investors and Wall Street analysts in borrowing $262 million in 2002 and 2003. The Securities and Exchange Commission accused a group that included former City Manager Michael Uberuaga of recklessly omitting details of ballooning pension and retiree health obligations in five bond offerings. […] In addition to Uberuaga, the former officials charged yesterday are auditor Ed Ryan; his deputy, Terri Webster; treasurer Mary Vattimo; and Patricia Frazier, deputy city manager for finance.” [San Diego Union-Tribune, 4/8/08]

• Members Of City Council Said They Got Bad Advice From Officials, And Were Not Charged. The San Diego Union-Tribune reported: “[City Attorney Michael] Aguirre has been trying with little success in court to set aside the benefits that he believes to be illegal. He said the SEC charges shore up his case. The council members who have borne the brunt of Aguirre’s criticism — Scott Peters, Toni Atkins, Brian Maienschein and Jim Madaffer — have long maintained that they merely received bad advice from city officials and private advisers. Peters and Maienschein are challenging Aguirre’s re-election on the June 3 ballot along with two other candidates, Jan Goldsmith, a Superior Court judge on leave for the campaign, and Amy Lepine, a former Aguirre deputy. Asked whether he felt vindicated by yesterday’s SEC charges against other officials, Peters said, ‘Yeah, I think you could read it that way.’ He also said he believes the investigation is over and that no council members will be charged.” [San Diego Union-Tribune, 4/8/08]

SEC Announced It Was Not Investigating Peters And Later Said Pension Overhaul Peters Championed “Could Be A Model For Other Governments.” The San Diego Union-Tribune reported: “Peters, 54, said the pension problems began long before he took office. He acknowledged his vote was a mistake, but said he helped lead the charge for changes to the pension system at City Hall. It was not his call to seek outside representation during a broad federal probe, costing taxpayers more than $600,000. The city attorney wouldn’t represent him and others involved. The SEC, which examined the pension debacle, eventually stated that Peters was not under investigation. When much of the dust cleared in March 2010, the SEC’s outside monitor said San Diego’s financial overhaul could be a model for other governments.” [San Diego Union-Tribune, 10/26/12]

Lawyer Involved In San Diego Pension Litigation: Attacks On Peters Are “Rife With Misinformation And Blatant Falsehoods.” In a letter to Rep. Brian Bilbray, Frank T. Vecchione, a lawyer who represented a city employee in the pension case, wrote: “I recently received some materials and mailings disseminated by your campaign which are negative ‘hit’ pieces directed at Scott Peters. I understand negative campaigning is part of politics. However, the allegations continued within the material which your campaign has directed at Scott Peters is so rife with misinformation and blatant falsehoods that I consider it appropriate to respond. I am not responding on behalf of Scott Peters, but out of deep concern that the false allegations that were used to ruin many good people’s lives, and were proven untrue, are now rearing their ugly head again in your campaign materials.  […] No court has ever found the action taken on MP2 to be illegal. In fact, courts have uniformly found the opposite – the action taken was legal. No member of the City Council, including Scott Peters, was ever charged criminally with regard to MP2 or the ‘underfunding’. Scott Peters was never the subject of an investigation regarding fraudulent activity or criminality. These allegations are false.” [Frank T. Vecchione Letter To Brian Bilbray, 6/1/12]

Peters Wasn’t Informed Vote Was A Conflict Of Interest

Peters Says He Did Not Know Wife’s Investment Owned Subsidiary That Got Government Contract. From the San Diego Union-Tribune article cited in the ad: “Lynn Peters, who owns Cameron Holdings Corp., a private equity company in La Jolla, holds stock in a slew of companies, which her husband listed in his 35-page filing. One of those companies is Marsh & McLennan, an international insurance and investment management firm based in New York. Kroll is one of the firm’s six major operating units. Scott Peters said neither he nor his wife knew that Marsh & McLennan owned Kroll until Monday. He voted to approve contracts with Kroll five times in the past year, and his wife held between $68,000 and $116,000 Marsh & McLennan stock at the time of those votes, he said. As of yesterday, she owned about $78,000.” [San Diego Union-Tribune, 4/5/06]

Peters’ Wife’s Investment Was Not Listed As Company Affected By Vote To Approve Contract, So He Did Not Know To Recuse Himself. From the San Diego Union-Tribune article cited in the ad: “Council members typically receive a list each week of companies that will be affected by their votes so that they can recuse themselves if a conflict exists. Scott Peters said that Marsh & McLennan was never listed on those documents before Kroll votes. ‘If we even sniff a conflict, I don’t vote,’ Peters said. ‘As long as it’s listed we always catch it, so I’m not quite sure what else we can do. I can’t ask my wife to quit her job.’ His wife’s investments change frequently, Peters said, and he checks regularly with her to ensure there are no conflicts. As for the timing of the purchase on Feb. 14, 2005, he said, ‘I just think that’s coincidental.’” [San Diego Union-Tribune, 4/5/06]