When he was elected mayor in 2000, Dick Murphy thought he had his hands full dealing with a troubled ballpark project and sewer spills that were shutting down San Diego's beaches. But then Murphy, 62, a state superior court judge, became embroiled in an even bigger mess: a $1.35 billion deficit at the city's public-employee pension fund. The crisis has so discredited him, he almost lost his job last November to Donna Frye, a last-minute write-in candidate who runs a surf shop. She actually won more votes, but some 5,500 people who wrote in her name failed to shade in an oval box, and the courts ruled the ballots invalid.
It was Murphy's predecessor who first approved underfunding the pension fund. But when a balloon payment became due in 2002, Murphy dodged it by fashioning another underfunding plan, winning the pension board's acceptance with a promise to hike pension payouts and give special benefits to the union presidents. Now the FBI, the U.S. Attorney and the SEC are investigating the deal. --By Terry McCarthy. With reporting by Jill Underwood/San Diego