Charges against former city retirement board members dismissed

A federal judge Wednesday dismissed charges against five former members of the San Diego retirement board, saying the honest services fraud law under which they were charged was a “model of vagueness.”

Ronald Saathoff, former head of the city firefighters union, was originally indicted in January 2006 on wire fraud, mail fraud and conspiracy charges, along with pension board members Cathy Lexin and Teresa Webster, former pension system administrator Lawrence Grissom and ex-pension board attorney Loraine Chapin.

A superseding indictment in 2008 alleged the five schemed to have the retirement board pass a plan in 2002 to underfund the pension system.

Prosecutors contended the defendants supported a city plan to put less money into the retirement system for enhanced benefits and a special retirement benefit for Saathoff.

The judge overseeing the case, U.S. District Judge Roger Benitez, ruled Wednesday that the defendants were charged under a “novel, untested” application of the vague mail and wire fraud honest services statutes for carrying out pension fund business.

“A reasonable person of ordinary intelligence would not have known that what the defendants were doing violated the federal mail and wire fraud statutes,” the judge wrote in his 28-page ruling.

“Under our Constitution, people are not to be punished for `violating an unknowable something,’” he said.

Earlier this year, the California Supreme Court dismissed conflict-of interest charges against several former pension board members, including Lexin and Webster. The state’s high court, however, did not dismiss charges against Saathoff.