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Charges dismissed

Shipione: Ethics charges were effort to silence critics

Pension whistleblower Diann Shipione received a bit of vindication last week when the San Diego Ethics Commission dismissed a complaint levied against her by the pension board.

Following an investigation, the commissioners decided at their Dec. 19 meeting that no administrative penalties or fines were warranted in the case.

Stacey Fulhorst, executive director of the Ethics Commission, would not elaborate further on the reason for the claim's dismissal.

"The records in our investigative file are confidential," she said when contacted Thursday. "When the commission does pursue administrative remedies, then we think it's important for the public to understand why. We don't see the need to release information when we conduct an investigation that does not result in a stipulation or fine."

Shipione is regarded as the first official to shed light on the problems surrounding the pension system, which has now accrued a deficit estimated to be near $2 billion.

In November 2004, the San Diego City Employees' Retirement System filed a complaint against then-trustee Shipione for allegedly releasing confidential information regarding attorney's fees that was protected by attorney-client privilege.

Shipione claims she had no knowledge of what the fees were and was never provided with any of the fee agreements.

"I always thought that the complaint was meant to scare other people into silence," she said Thursday. "The real ethical issue has always been the immoral reality of promising a secure retirement to thousands of people but not paying for it, and that's just wrong."

SDCERS administrator Lawrence Grissom and the system's legal counsel Lorraine Chapin could not be reached for comment.

Shipione served as a pension trustee from July 1997 to this past April. In late 2002, she expressed her concerns over the passage of what has become known as Manager's Proposal II, which allowed for the continued underfunding of the pension system.

SDCERS was subsequently sued by a group of retirees, forcing the pension board to hire "a battalion of law firms" to defend itself, Shipione said. "Over the course of three to four years, many people were wondering how much the board was paying to outside counsel."

Shipione said she relayed inquiries she received to system officials via e-mail but was never given information back regarding the retainer because it was privileged.

She hopes that her exoneration by the Ethics Commission will persuade others with information to come forward.

"If it brings a sense of encouragement or some sense of safety to others who want to speak out -- that the commission won't be used as a tool against them -- that would be a great outcome," she said. "There are so many decent people who have been compromised ethically because they've been sent this message that if they speak out and do the right thing, they'll be punished.

"Anything that can be done to provide a safe environment for people who notice wrongdoing and want to fix it would be a positive step for our community."

The Ethics Commission typically receives between 70 and 90 complaints a year with an average of 10 to 15 bringing stipulations, according to Fulhorst.

Stipulations can range from fines and remedial action to requiring the offender to file certain documents.


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