California Supreme Court Decision Lifts Restrictions on Retiree Representatives In a welcome unanimous decision the California Supreme Court has ruled that members of public sector retirement system boards are not guilty of having a criminal conflict of interest when they participate in a board decision which benefits all or many of a system’s members even though the board members may also benefit by virtue of their own membership in the system. Thus Bill de la Garza, the retiree representative on the LACERA Board of Retirement, will no longer be legally barred from discussing and voting on matters such as retiree health insurance contracts. The Supreme Court found that board members who benefit only insofar as they are members of the system, and who would not receive any special individual benefit, are exempt from the provisions of the state’s conflict of interest law. The underlying principle appears to be that almost anyone who serves on a representative governing body will be called upon to participate in decisions which confer a benefit upon her or him. An example that comes to our mind is that of the legislators who vote for a tax reduction for their constituents are going to be eligible to receive that reduction. What are the Facts of the Case? The case decided by the California Supreme Court, Lexin vs. The Superior Court of San Diego County, arose out actions by the governing board of the City of San Diego’s Retirement System. Labor contracts provided that when the ability of the city’s retirement fund to meet its future liabilities fell below a specified level, the city was required to make a extra large contribution to the fund. This was at a time when the city itself was experiencing financial problems. An agreement was reached which would relieve the city of its obligation to add to the retirement fund in exchange for enhanced future retirement benefits for then active employees. In approving this arrangement six members of the board who voted on this matter were city employees who would benefit from the larger pensions. The six were prosecuted by the District Attorney for violation of the conflict of interest statute. Both the Superior Court and Court of Appeals supported the prosecution. The Supreme Court decision overturned the decisions of the lower courts with respect to five of the defendants, finding them exempt from the conflict of interest statute. The sixth defendant is alleged to have received special individual consideration with respect to his future pension and will be required to stand trial.