Reed Pulls Plug on State Pension Reform, Wins Appeal of $1 Fine

After losing an appeal over ballot measure language, Mayor Chuck Reed decided to drop his 2014 state pension reform campaign and delay it to 2016. The effort would have had to collect 807,000 signatures to make it on the ballot, with little time between now and the filing deadline.

"It’s a judgment call at this point," Reed told San jose Inside, adding that, realistically, signatures would need to be turned in by mid-April. "I don’t know if it's impossible, but it’s certainly impractical."

He added that he was "disappointed" about the "inaccurate and misleading summary produced by the Attorney General."

While Reed will term out of the mayor's office at the end of this year, he vowed to continue working on the issue so it goes to California voters in 2016.

"I'm not going to run for elected office, but I'll probably stay in politics in some fashion, on a part-time basis," he said. "It's an important issue to me; it's an important issue to the state. The one thing I've learned as mayor is issues are hard, and you can’t quit just because they're hard."

Reed and other proponents of his reform measure sued California Attorney General Kamala Harris over the way her office worded the ballot description of the initiative. The sentence in question said that the measure "eliminates constitutional protections for vested pension and retiree healthcare benefits for current public employees, including teachers, nurses and peace officers, for future work performed."

Reed called the wording "false and misleading," adding that it "creates prejudice" against the initiative. But Sacramento Superior Court Judge Allen Sumner said a line-by-line reading turned up "nothing false or misleading" about the description.

The loss comes a day after Reed celebrated a victory in a separate case appealing a $1 fine from the state's political watchdog.

The Fair Political Practices Commission (FPPC) fined Reed $1 in October, saying he violated campaign contribution rules by channelling $100,000 from his fiscal reform committee to one supporting Councilwoman Rose Herrera in her re-election bid. State rules bar "candidates," which has included elected officials, from giving political funds to independent committees that aim to get another candidate elected.

But Reed appealed the judgment, arguing that he was an officeholder—not a candidate—when he made the donation in September 2012. In his appeal, Reed's attorney argued that the state's campaign contribution laws are unconstitutional, citing the Supreme Court's ruling on the controversial Citizens United case.

Following the tentative ruling, which the FPPC chose not to appeal, Reed maintained that contribution standards should be consistent, whether the committee is led by a union, corporation, PAC or candidate.

“I’m glad that the Judge agreed that the FPPC unfairly applied a different standard to my committee than it has for other independent expenditure committees," he said. "As I’ve said many times before, I’d like to see Citizens United overturned. However, until that day comes, the FPPC has to treat all independent expenditure committees equally.”

The problem with FPPC's argument, Reed stated in his writ of mandate, which also went before Judge Sumner, is that it focuses on the wrong type of donations.

"[State law] does not limit contributions to candidate-controlled committees," he wrote. "Rather, it bans contributions from candidate-controlled committees."

Candidate-run committees can accept unlimited donations, the writ continues.

"The question is whether government may ban those committees from then contributing to other committees which make independent expenditures. Following Citizens United, the answer is 'no.'"

Josh Koehn contributed to this report.

Jennifer Wadsworth is the former news editor for San Jose Inside and Metro Silicon Valley. Follow her on Twitter at @jennwadsworth.


  1. Congratulations to Chuck Reed on getting his dollar back. It’s the only thing he’s won in quite a while. I wish him many more losses in the future.

  2. Thanks for destroying San Jose! How many more loses in court will it take. MLB will be the next one to kick you in the behind. For being a so called lawyer, I would never go to you for representation.

  3. Funny….Reed’s upset about the false and misleading summary. Just like the false and misleading Measure B campaign you were able to deceptively get passed in San Jose by lying and misleading the residents of San Jose. Your deceptive politics won’t work at the State level and thank goodness the judge had common sense to shoot down your lawsuit and present your ballot measure for what it is. Wake up everyone and realize what a horrible mayor Reed has been and how he has destroyed the City of San Jose. I’ve been a resident for 40 years of San Jose and it has never been this bad. The City is unsafe, not enough police officers, now we are finding out the Fire Department has been cut so badly they can’t make it to calls in the required timeframe, violent crime is rampant, roads are a mess, homeless population is out of control, parks have no bathrooms or maintenance. Yet we have money to pursue a baseball stadium with no major league team, and we have money to remodel the convention center. Why does Reed continue to pursue a baseball stadium? Why do we remodel our convention center when there is no demand to use our convention center? Reed has to pay back his wealthy developers and construction buddies who paid for his Measure B campaign. Who do you think will be awarded the construction contracts ? Follow the money. December can’t get hear soon enough. Don’t let the door hit you on the way out and please take your cronies Nguyen, Licardo, Oliverio, Constant with you. Continue to align yourself with the biggest thief of corporate pensions in American history, the ex Enron cronie. Get out of our City!

  4. To all of the above posters…. I couldn’t have said it better! You guys stole my thunder regarding this jackass and his clown side show that he runs. Just look at his picture, he is soulless old man. I bet he sells his house no less than 6 months after leaving office. All I can say is WHAT A JACKASS!

  5. 2005: 1,841 retirees pulling down more than $100,000 a year in pension checks from the CalPERS.

    2009: the “$100K club” has tripled, to 6,133 members.

    At the end of 2012, membership more than doubled yet again, to 14,763.

    700% increase in less than a decade (inflation rate over the same period: 38%)

    Would you agree that this is the “biggest theft of public pensions in American history”?

    • It depends, but you would also have to assume that much of this was actually earned. It is pretty shocking what those in the medical profession earn, and if they work for CA or county government, then they too would pull in over $100k in annual pensions.

      However, if officials from the towns of Bell and Vernon were involved in illegal activities andt set their salaries at unreasonable levels, then any pensions they were pulling would be theft.

  6. In keeping with Reed’s time-tested strategy…spare no expense to save a buck. One Buck Chuck continues to destroy this once nice city.

  7. Reed’s agenda is to help his Arnold foundation pals and other money mangers wrest control of every pension fund in the state. Why? Because billions are at stake in management fees and commissions. Which is exactly what he’s doing by ensuring his favored friends now sit on the boards of San Jose’s pension funds, and direct the fund’s investments toward their aligned funds, even though private equity firms are vacating these same losing funds. His ballot measure is a statewide play on the same goal.
    Read for yourselves here: an independent source not affiliated to Wall Street:

    • Californication, try to stay on topic. We are discussing San Jose. In case you have difficulty with comprehension, it’s the city named in the title of this blog. If you want to draw comparisons with Vallejo, the domain name is available for your purchase where you’re free to make your illogical comparisons. Thanks for visiting. Good luck with your blog.

      • By the way, the article was published by Al Jazeera. Not any mouthpiece for Wall Street billionaires or the minions that watch their CNN shows. CNN’s abandonment of news to climb in bed with the tea party has turned into an epic disaster as the network has lost 52% of its viewers. My, how they love the cable TV sheeple. Reread the Al Jazeera article the ask yourself what their “agenda” is. They don’t have any skin in the San Jose game

  8. Who are you “discussing” San Jose with? Yourself? Just scroll up a bit — you can do it.
    Now do you see a boldly lettered title that starts with: “Reed Pulls Plug on State Pension Reform…”?

    State [steyt] — A state is one of the 50 constituent political entities that shares its sovereignty with the United States federal government.

    Feel better now?

  9. this just goes to show what a cesspool San Jose has become . The Fact that this 8&%&$%^@!!#! Mayor can break the law by illegally contributing funds to a mad cow , get fined $1.00 and get that same dollar back , is seriously criminal

  10. The problem with Chuck Reed getting his dollar back is that as long as the fine…even 1 dollar was in place it prevented him from funneling money from outside sources I to campaign s as he did in the transfer of $200,000 from John Arnold to the campaign to eliminate pensions. Now that the fine has been reversed this can once again start up.

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