SJ workers claim Reed is guilty of ethics violations

SAN JOSE, Calif.

A number of protesters showed up outside the Civic Auditorium. Reed and the employee unions have a long and bitter history of not seeing eye-to-eye. The mayor calls the latest accusations a political stunt. The unions say the mayor is guilty of fraud.

A news conference held Thursday afternoon, announcing an ethical complaint against the mayor, was as dramatic as they come.

"These violations could lead to criminal sanctions," said union attorney Christopher Platten.

Hundreds of city workers are accusing Reed and others of intentionally inflating the cost of future retirement benefits.

"I am saying that Mayor Reed lied, mislead, and deceived the public and members of the San Jose City Council concerning the true fiscal condition of the pension plans in San Jose," said Platten.

An often-used city chart, plotting skyrocketing pension costs shows the estimated $250 million figure now is projected to climb to $400 million by 2015 and in a worst case scenario the mayor contends pension costs could be as high as $650 million.

"I knew it was not an estimate from the actuaries from the retirement board, but it came as an estimate from our professional staff," said Reed.

That professional staff is retirement director Russell Crosby. The ethics complaint includes an email from Crosby saying the $650 million number which he first threw out has no back up and damage control was needed.

For months though, during heated and contentious budget debates, the mayor continued to cite the $650 million figure which he stands by today.

Reed: It is my job as mayor to make sure that people understand the risks that we're facing and we're taking action to avoid those risks which is what we've been doing.
Rusk: And you felt that was a real risk, 650 million?
Reed: I did and I still do.

Reed says exploding pension costs are preciously the reason for citywide layoffs and service cuts. He says those actions were based on real numbers, not projections or worst case scenarios.

The unions say they do see a need for pension reform, but are calling for an independent third-party investigation.

"We want to know what people knew, when they knew it and we want to know what the truth is. We think we cannot get started on meaningful progress in this city until people are held accountable to telling the truth," said Robert Sapien, the firefighters' union president.

It will be up to the elections commission to investigate and determine if these allegations have any merit. The public may also weigh in on this debate. The City Council is expected to put the pension reform measure before voters in June.

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