Well, thank you to my Local Facebook friends who saw fit to send along the recent breitbart.com/Big-Government posts detailing the IAFF decision making process to hire Mr. Ron Saathoff as their “pension czar”. I had no idea I had such conservative acquaintances.
The Breitbart pieces are mostly sensational trash full of right-wing anti-union blather. The interesting part is the memorandum written by the IAFF’s General Counsel Tom Woodley discussing the feasibility of hiring Mr. Saathoff to be head of the new pension effort.
The memo’s stated purpose is to “provide…advice as to whether there would be legal problems or risks for the IAFF if you decided to hire Ron Saathoff…” There were no legal problems since Mr. Saathoff had not been convicted of a crime and the only risks were of an ethical nature which would seem not to have been a concern, in appearance or in fact. But over the course of ten pages the facts largely make their own case as to why the hiring is an ethical disaster for an international labor union. Though it’s hard to miss the ethical sledgehammer, it seems that is exactly what occurred.
The memo mentions a high level IAFF meeting where Mr. Saathoff brought along his two criminal defense attorneys, an occurrence which would seem to pretty much sum up the ethical situation.
The memo also references, in a very discrete and extremely under-stated footnote, the Kroll Report, an independent study of what occurred in San Diego. Mr. Woodley summarizes the Kroll findings by saying, “the Board breached its fiduciary duty…by acting imprudently and contrary to the best interests of the system and its participants.” In fact, the Kroll Report finds Mr. Saathoff’s backing of MP2 (the plan to under fund the pension system) as being “particularly egregious.” It goes on to say “It appears the City effectively “bought” Mr. Saathoff’s support for MP2 by providing him with the generous Presidential Leave benefit enhancement package…” (http://www.sandiego.gov/mayor/pdf/05partiesresponsible.pdf)
There is inescapable irony here: the Breitbart pieces, which are viciously anti-union, condemn actions by Saathoff and others on the San Diego pension board which were also effectively anti-union. The Kroll report states, “The Board failed to live up to its responsibility. …The City was able to contribute to SDCERS (the pension system) at less than the actuarially determined rates which, in conjunction with increased unfunded benefits and poor investment returns, caused SDCERS to become actuarially unsound.” It was rank and file union members who were dis-advantaged so that the City could continue to under fund firefighter pensions.
The IAFF found it necessary to construct a tortured defense that would allow them to hire someone whom the California Supreme Court found, “could… reasonably be suspected of having obtained a unique, personalized pension benefit…” The Court went on to say, “Such individually tailored benefits pose genuine conflict problems and do not fall under any statutory exception.”
Here, from page eight of the memo, is the closest Mr. Woodley would come to an endorsement, in a sentence collapsing under the weight of double-negativity, “Because Saathoff has not been convicted, he is not presently disqualified from employment with the IAFF.”
There, in a nutshell, is the new IAFF hiring standard, apparently.
Mr. Woodley requested that the ten-page memo be closely held and not even distributed to the IAFF Executive Board in order to maintain “attorney-client privilege.” A careful reading of it reveals no bombshell or important legal strategy. Was it effectively secret because the information is embarrassing and ethically indefensible?
Mr. Saathoff may be and probably is a jolly, fine fellow. He is also an easy target since the California Supreme Court decision and the Kroll report are so unsparing, but the truth is that neither Mr. Saathoff nor those findings are the real issue.
The real issue is that his ethical record around public pension work has been very seriously damaged by the San Diego scandal. Based on that fact, how he could be chosen to lead the pension program of the IAFF is a curious and vexing question–but only if you happen to care about ethics.
(Disclosure: I am both a member of, and retiree from the IAFF.)