San Fernando City officials believe they face no lingering liability in the wake of disgraced former police officer Sgt. William Bailey having to pay back more than $200,000 to the California Public Employees’ Retirement System (CalPERS) for filing a fraudulent disability claim in 2014 — a claim, CalPERS said, was enabled by a settlement devised by former San Fernando City Manager Brian Saeki to end an appeal by Bailey from being fired.
But the door opened to further litigation, civil or otherwise, is not yet completely closed after CalPERS representatives loudly suggested that Saeki and City officials had knowingly okayed a fraudulent claim by Bailey, and therefore turned its findings over to other law enforcement agencies. The City of San Fernando, as a public agency, is contracted with CalPERS for disability and retirement benefits for its eligible employees.
Saeki left San Fernando in 2016 to become the City Manager for Covina. Last November, he accepted the same position for the city of Whittier, where he is currently employed. He did not respond to repeated calls from theSan Fernando Valley Sun/El Sol seeking comment.
A spokesman for LA County District Attorney Jackie Lacey’s office, via email, said the matter is being reviewed by its Public Integrity Division. The state Attorney General’s office could also be reviewing the case, although a spokesperson for Xavier Becerra’s office — also via email — said the AG would neither confirm or deny “to protect the integrity” of a potential or ongoing investigation.
“I don’t know if either body will take any action — that’s up to them,” said current San Fernando City Manager Nick Kimball. “At the end of the day…if there is any further investigation we will obviously cooperate. The City doesn’t have anything to hide; everything we did was in accordance with CalPERS’ law at the time.”
Saeki was delegated the authority to determine Bailey’s fate after the council changed its form of government in 2014 from a city administrator system to a city manager system. The change enabled the council to have one person — the city manager — able to remove or settle with employees rather than city department heads or the council. The only local governmental authority the city manager answers to is the council.
“It’s been the city manager’s job to decide on industrial disability retirements,” Kimball said. “The council is a policy-making body. They’re not here to run the day-to-day operations of the City. The City Council doesn’t get involved in personnel decisions, especially when it comes to people’s health.
“This is a pretty common thing statewide. The City Council members are not necessarily H&R people. That’s why cities tend to designate the manager to be the final arbiter of industrial disability retirements.”
Bailey, who joined the police force in 2003, filed an Industrial Disability Retirement (IDR) claim with CalPERS in 2014. At the time, Bailey was facing termination from the police department for having lied on a promotion application, claiming he had a college degree, to advance in rank to Sergeant. Bailey was appealing the termination order when the settlement crafted by Saeki was reached.
The settlement enabled Bailey to file the IDR claim, citing disabling injuries from a 2009 training incident while on a motorcycle. He also received a one-time $10,000 award.
CalPERS officials, during an internal audit, discovered two years later that Bailey was to be fired for “cause” before being able to file for disability retirement due to injury. According to its regulations, a person must have the ability to be reinstated to his or her former position if they recover from their injury, to be eligible for a disability retirement. When they are terminated for cause, the option of returning to work is extinguished.
Bailey, who now resides in Florida according to his Facebook Page, is now repaying $230,938.66 to CalPERS for fraudulent benefits received. And CalPERS officials, following the decision overturning the claim, all but accused Saeki and City officials of conspiring to defraud it.
“It seemed to us to be such a clear case of conspiracy, really, between the police officer and the City on a false disability claim, which is very detrimental to the whole thing we’re trying to do here, the whole idea of why this disability retirement benefit was established,” said CalPERS attorney Matthew Jacobs, in discussing the case with the San Fernando Valley Sun/El Sol.
“It’s unusual in the brazenness, if I might, with which it was undertaken,” Jacobs said. “It’s just a flat-out deal. It’s documented in the settlement agreement between the City and Mr. Bailey that this is what’s gonna happen. It’s pretty crazy.”
Kimball’s response was measured, yet prickly.
“Those words that were used by CalPERS — ‘conspiracy’ and fraud’ — all of that requires an intent to mislead or intent to lie. I’m pretty confident that all of our documentation shows that everything we did, we did in accordance with the law at the time,” Kimball said.
“Now, laws have changed since then. And just like any action, if you look at things that happen today through the lens of today’s laws, instead of the context of when it happened, you can judge things differently. But, at the time, the City relied on professional advice, and it’s not like we did something opposite of that advice. That’s why I’m confident in it.”
Sylvia Ballin and Joel Fajardo were both on the council — along with Jessie Avila, Robert Gonzalez and Antonio Lopez — when the settlement was approved in 2014.
When asked why Bailey’s appeal process wasn’t played out if he was going to be fired, Fajardo — who is now mayor — replied, “That would have to be something you get from either Nick or from the City Attorney, because it’s a personnel matter and that’s something I’m not able to address.” At the same time, Fajardo insisted, “the question seems to be, was this done specifically for the purpose of facilitating the situation with Mr. Bailey, and the answer is no.”
Ballin —who was the mayor in 2014 — said she doesn’t remember Bailey or the case. “That was six years ago,” she said. “The first time I heard about it was — well not the first time — when I read about it in the Sun and it was a surprise to me; As I said I had no idea what the guy looked like.
“Do we have a responsibility? I need to know the whole story for me to give you that kind of an answer. I would like to actually speak to Brian and find out what happened, how did this happen. I don’t understand. I really just don’t understand. I have no memory of it. I wish it was one of those officers that…you know, someone I talked with or interacted with. But this is just some guy; I never interacted with him. I just have no recall about this guy whatsoever.”