Welcome, GOP Convention Delegates, to San Diego, City of Shame

Top row, left to right: C. Arnholt Smith, Richard Silberman, Roger Hedgecock, M. Larry Lawrence, Susan Golding, Pete Wilson. Center Row: Nancy Hoover, Helen and David Copley, Terry Cole-Whittaker, Herb Klein. Bottom Row: Tom Metzger, Bill Mitchell, Steve Garvey, Ray Blaire, J. David Dominelli.
  • Top row, left to right: C. Arnholt Smith, Richard Silberman, Roger Hedgecock, M. Larry Lawrence, Susan Golding, Pete Wilson. Center Row: Nancy Hoover, Helen and David Copley, Terry Cole-Whittaker, Herb Klein. Bottom Row: Tom Metzger, Bill Mitchell, Steve Garvey, Ray Blaire, J. David Dominelli.
  • Image by Sandy Huffaker, Jr.

Cover collage: from top row, left to right: C. Arnholt Smith, Richard Silberman, Roger Hedgecock, M. Larry Lawrence, Susan Golding, Pete Wilson, center row: Nancy Hoover, Helen and David Copley, Terry Cole-Whittaker, Herb Klein, bottom row: Tom Metzger, Bill Mitchell, Steve Garvey, Ray Blair, J. David Dominelli.

THE GOVERNOR AND MAIDGATE

Pete Wilson - From Those of Us Who Knew Him

Pete Wilson hatched his political career in San Diego, and it is here that it's likely to die. The rise of the city's dull ex-mayor to presidential candidate ("dour," "a great campaigner," "not interested in governing," "never underestimate him," "really fun when you get him one on one") was stalled last year by San Diego characters and circumstances that gained national notoriety. It is ironic that Wilson, who fancies three-piece suits, imported silk ties, Italian shoes, expensive cigars, and wealthy friends, would be brought down by a pair of Mexican maids and their La Jolla employers. But to those who know San Diego well, it is a kind of closure, the running of Wilson’s full circle, from ambitious boy mayor, a so-called GOP “moderate” favoring what he called “managed growth” — supported by friendly real estate money and the local pro-growth newspaper — to self-designated “neo-conservative,” alienbashing governor and presidential candidate regarded, even by some friends, as a flip-flopping opportunist.

Pete Wilson campaigns for president in San Diego, November 1995

Pete Wilson campaigns for president in San Diego, November 1995

Thus did a scandal called Maidgate come to be seen as the essence of Pete Wilson. It began a year ago last spring in Washington, where the Post had uncovered the hottest story of Pete Wilson’s 30-year career. The day before the story broke, word had already leaked across California: Wilson, the champion of 1994’s most fashionable state ballot measure, the aliencurtailing Proposition 187, had employed an illegal alien from Tijuana as his housekeeper.

Hours before the Post's presses rolled, reporters from the Sacramento Bee and Los Angeles Times worked the phones to San Diego, eager for any confirmation of the story and desperate to avoid being scooped by the East Coast newspaper. One enterprising Times reporter based in San Diego but posted to Oklahoma City to cover the bombing even made a late-night call to a San Diego-based Wilson watcher, begging him to go to the home of Wilson intimate John Davies to ask for Wilson’s unlisted phone number.

Actually, the scandal’s first big revelation was that the state’s big newspapers had been caught flat-footed on Maidgate. They were, after all, fresh from months of covering Wilson’s triumphant reelection comeback against the inept Katherine Brown. They never admitted it, of course, but the papers had long ago cut back their Sacramento coverage, saving money on reporting payrolls but leaving the citizenry victim to an electoral system dependent on $20 million advertising campaigns filled with 30-second TV spots of misinformation. Both Brown and Wilson had raised their money from an unsavory bunch — gambling professionals (Brown: Indian casinos, Wilson: thoroughbred owners), insurance companies, lawyers, and corporations, each pushing a special-interest agenda.

With few exceptions, the California newspapers failed to investigate any of Wilson’s or Brown’s financial ties or political histories. And some of the newspapers themselves, like the Los Angeles Times, even had their own agendas. Times owner the Times-Mirror corporation, along with the company’s controlling Chandler family, owns big stakes in agribusiness and thoroughbred operations in the San Joaquin Valley. As governor, Wilson has been more than kind to both industries. Though the paper denied anything untoward, very few embarrassing revelations about Wilson ever appeared on its pages during the gubernatorial campaign. Maidgate would have to wait.

Wilson had led the same journalistically charmed life as mayor of San Diego. Helen Copley inherited both the city’s newspapers, the Union and the Tribune, in 1973 from her husband, a rock-ribbed Republican conservative who often used them to his political advantage. A year or so after her husband’s death, Copley announced in an interview in the now-defunct New West magazine, that she had slain all the “sacred cows” the papers had long protected, including the U.S. Navy, the San Diego Zoo, and miscellaneous politicos. It was the height of the city’s antigrowth movement. Old-timers wanted the influx of outsiders stopped, and the newly arrived agreed. Copley said she believed in Wilson’s vague concept of “managed growth.”

Elected in 1971, Wilson surfed the anti-growth wave like a champion. He opposed coastal oil drilling and endorsed clean-air laws. He promised a magic bullet to stop the onslaught of development and set up a string of commissions to study the problem. Four years later, opposed for reelection by a concrete contractor who held that growth was inevitable, Wilson turned his hapless foe into the perfect foil. Copley, by now a close friend of the mayor’s, used her papers to summon visions of the concrete wasteland that awaited if the contractor was elected. In particular, Copley columnist Neil Morgan, who lunched regularly with Wilson and attorney John Davies at the Grant Grill, waxed poetic about the natural wonders of San Diego and how it was in danger of being overwhelmed by unwashed masses from the East.

Wilson won handily in the fall of 1975. But after the election he began to change his position on growth. A top aide soon left city hall to become chief lobbyist for the region’s biggest developer. And Wilson began to water down the bold anti-growth measures he had proposed during his first term. As his attention turned increasingly to the several statewide campaigns that would eventually land him in the U.S. Senate in 1982, Wilson was more interested in raising money from the city’s real estate interests than in his utopian promises to curtail them. The Copley newspapers turned their eyes away from the problems of growth and Wilson’s flip-flops. Freeways were built, subdivisions were laid out across North City West, a district Wilson had once pledged to protect for eternity. Copley papers reported that the city was growing up, finally.

The papers also avoided the tender subject of Wilson’s estrangement and eventual divorce from his first wife, Betty, and the fallout of their separation on the mayor’s lifestyle. Married in 1967, during Wilson’s first term as an assemblyman from San Diego, the Wilsons had been portrayed by the Copley papers as the perfect political couple. The stories highlighted the Wilsons’ happy home life in a modest condo in Clairemont. Betty was so busy with her new job, said one 1973 account, that she hired a housekeeper to come in twice a week. The paper carefully ignored questions raised by the mayor’s political opponents, who pointed out that Betty’s occupation, selling La Jolla real estate to wealthy executives, some of whom did business with the city, might create a conflict of interest.

When the couple separated in 1981, Wilson moved into the first of a series of rent-free condominiums near downtown, arranged for him by his friend John Davies, whom Wilson had appointed as chairman of the city’s planning commission. Davies claimed Wilson was virtually broke as a result of the separation. News of the free rent, provided by developer friends of Davies, was not to be found in the Copley papers. The Los Angeles Times broke the story in the fall of 1982, as Wilson’s battle against then-Govemor Jerry Brown for the U.S. Senate heated up.

Wilson easily beat Brown and was soon remarried, to bakery heiress Gayle Graham. She bought a townhouse for them in Washington. Wilson would return to San Diego only for token campaign appearances.

By the time Republican power brokers convinced Wilson to return to California and run for governor against Democrat Dianne Feinstein in 1990, his ties to San Diego were fading. He had purchased a two-bedroom condo in the Sports Arena area as his legal address, but he rented it out. He still enjoyed the support of Helen Copley and her editors, but word inside the paper was that the new governor was not as deferential to the “old woman named Copley” as he once had been. Even so, both she and her 38-year-old son David, president of her publishing empire, gave generously to Wilson’s ultimately successful reelection campaign in 1994.

But then came 1995. For the first time ever, the Copley papers found themselves on the wrong side of Pete Wilson, who had promised during the ’94 campaign he wouldn’t run for the presidency. Word came from inside the papers that Copley, along with most of the state’s GOP elite, wanted Wilson to stay put in Sacramento. Bob Dole, with his long-time links to Copley’s friend Richard Nixon, was her sentimental favorite. Sources say Copley expected the same fawning respect she had always gotten when she called Wilson to advise him of her wishes.

They add that she was surprised when he was less than deferential. That January, Wilson announced he was a candidate in the presidential primaries.

Eight months later, on a Friday afternoon in late August, a week after Wilson pulled out of the presidential race, John Davies picked up the phone and arranged a conference call with selected reporters — none from the Copley papers — to announce the results of his “investigation” into Maidgate. A few weeks after the scandal had broken that April, Wilson, claiming lack of knowledge, assigned Davies to look into the matter of how the maid had been placed on the Wilsons’ household payroll and whether she was working in the country illegally. Davies’s findings became the campaign’s epitaph and launched an orgy of speculation among San Diego politics and media watchers.

The maid, reported Davies, had been referred to the Wilsons by Neil Morgan’s wife. The legality of her work status was still not known, said Davies. He said Wilson’s ex-wife Betty had handled all of the other details and kept Wilson in the dark. The case, he added, was closed. When Davies hung up the phone, he left old questions unanswered and raised many new ones. Had he done so deliberately? That’s what some Wilson watchers think.

If Davies was right about the referral of the Wilsons’ maid, Morgan, by now associate editor of the Union-Tribune, would likely have known for years about the situation. If so, he never reported it to his readers, even during the heat of Maidgate that spring.

The Copley papers never interviewed Morgan after Davies’s disclosure. Copley watchers speculate that others at the paper besides Morgan knew of the maid and may even have employed her, along with the many other local establishment figures who came forward to say they had also used her services. Thus, throughout 1994, as Wilson battled Brown using the anti-immigration hammer, the Copley papers remained silent.

Maidgate remained in the governor’s closet, waiting for an opportune moment to emerge. That moment came after Wilson challenged fellow Republican Bob Dole for the party’s presidential candidacy. Observers note that Helen Copley and the Washington Post's Katherine Graham have long maintained a professional friendship, the kind of clubby relationship only two wealthy publishing widows can fully understand. That Pete Wilson’s little Maidgate secret suddenly emerged in the Washington Post only weeks after his conversation with Helen Copley is, some say, no accident.

— Matt Potter

NIXON’S LUCKY CITY

Did a San Diego-Linked Scandal Lead to the Watergate Break-in?

In the late spring of 1972, when the Republicans announced they would hold their national convention, not in San Diego as had been announced, but rather in Miami, the official explanation emphasized such things as the shortage of local hotel rooms and convention floor space and the threat of labor unions disrupting the proceedings. But another factor also underpinned the decision — the scandal provoked by Washington lobbyist Dita Beard.

Dita Beard: a chain-smoking, hard-drinking, salty-tongued agent for ITT

Dita Beard: a chain-smoking, hard-drinking, salty-tongued agent for ITT

Beard was a chain-smoking, hard-drinking, salty-tongued agent for the International Telephone and Telegraph company, a multi-billion-dollar conglomerate. “She was...a large woman in her mid-fifties [with] gray hair that showed traces of having once been red or blond, or dyed one of those colors,” wrote investigative reporter Brit Hume, who helped prepare columns for muckraker Jack Anderson and who met with Beard at ITT’s Washington offices one day in February of 1972. “Her skin was leathery and puffy, and she wore no makeup,” Hume later recalled in an article for Harper's. “A paper clip held her horn-rimmed eyeglasses together where one of the hinges had broken. She had on a chartreuse, short-sleeve sweatshirt and a pair of soiled yellow cotton slacks.... The impression she gave, though, was not of a broken-down woman but of a middle-aged tomboy. She moved and spoke with self-assurance, and it occurred to me as we shook hands that she must have considerable influence in that office to get away with being dressed as she was in the middle of the week.”

Hume had confronted Beard to ask her about a memo that had come from a secret source. The document appeared to have been written by Beard on June 25, 1971, to the head of ITT’s Washington office. It seemed to refer — obliquely — to the fact that the Sheraton hotel chain, an ITT subsidiary, had pledged to give the Republicans up to $400,000 in cash with the understanding that one of the San Diego Sheratons would serve as the presidential headquarters during the San Diego convention. But the fateful memo also revealed Beard’s anticipation that the contribution would also influence the Justice Department’s handling of an antitrust suit against the conglomerate. “1 am convinced,” it read, “that our noble commitment has gone a long way toward our negotiations on the mergers eventually coming out as [ITT’s president] wants them.

"Certainly the President has told [Attorney General John] Mitchell to see that things are worked out fairly.... Mitchell is definitely helping us but cannot let it be known.” The antitrust suit in fact had been settled just a few weeks before in a manner that was relatively favorable to ITT. The memo seemed to be that rare phenomenon: documentation that the Justice Department case had been fixed. Beard, moreover, didn’t at first deny writing it, and when Hume met with her again at her home in South Arlington, she admitted the authorship, according to Hume. A few days later, Anderson’s column, “The Washington Merry-Go-Round,” then carried by some 700 newspapers, announced the “evidence that the settlement of the Nixon administration’s biggest antitrust case was privately arranged between Attorney General John Mitchell and the top lobbyist for the company involved.” Coverage of the revelations quickly spread, and the reaction to it was manifold. ITT insisted that its San Diego contribution was “purely in support of a local situation” and that the company had made no deal of any kind to settle the antitrust action. Richard Kleindienst, who’d been nominated to replace John Mitchell as attorney general, asked the Senate Judiciary Committee to review the charges. The subsequent hearings dragged on for weeks (holding up Kleindienst’s confirmation and threatening to kill it altogether). Not long after the first column appeared, Beard was hospitalized with a heart ailment and she released a statement asserting that the memo was a forgery and she had been the victim of “a cruel fraud.”

For months, reporters and senators continued to ask tough questions about the antitrust case settlement, ITT’s funding pledge, and the company’s reaction to the Anderson column (which included shredding “many sacks” of documents after reporter Hume’s initial visit to the Washington offices). Amidst this furor, Nixon began questioning the choice of the convention site — though he had strong-armed the Republicans into picking San Diego in the first place. “Could we have a situation where we have a break with [Peter Graham, the operator of the Sports Arena]?” Nixon asked John Mitchell April 4, 1972, in a conversation captured on one of the infamous White House tapes and later transcribed and released. The president continued, “Create a conflict with them and then go out and announce it.... Go to the damn stupid [Miami Beach] again.” Thus San Diego lost the convention. Later such former Nixon staffers as John Dean and H.R. Haldeman alleged that the San Diego-linked scandal led directly to the Watergate break-in. Democratic Party chairman Lawrence O’Brien had harped on the apparent case-fixing so insistently that it drove Nixon to demand revenge, Haldeman theorized. According to this view, Nixon gave the word to White House counsel Chuck Colson to get the goods on O’Brien, a directive that resulted in the Democratic Party headquarters being targeted for the ill-fated burglary.

— Jeannette De Wyze

WHAT A LONG. STRANGE TRIP IT’S BEEN

Susan Golding's Rise to the Top

The view from the bar on the 40th floor of downtown’s gleaming Hyatt Regency hotel sweeps almost 40 miles, from the slums of Tijuana to the manicured hills of La Jolla and the golden suburbs beyond. In between lies Southeast San Diego, built mostly between the two world wars, and the similarly blighted Mid-City, the city council district where Susan Golding began her political life.

Golding - "exceedingly ambitious"

Golding - "exceedingly ambitious"

There, far below the hotel’s sparkling windows, ethnic gangs shoot at each other and at hapless bystanders, tagging their turf with spray-painted graffiti. Streets have been in disrepair for decades, and decaying wood-frame houses are crammed with the families of immigrants, legal and illegal, from Mexico and other Third World nations.

But viewed from the Hyatt bar, a gauzy yellow haze settles comfortably over the town around dusk. It is in these quiet confines the city’s Republican movers and shakers are known to congregate, Susan Golding among them. Elected mayor four years ago, Golding is said to have sealed the deal to bring the Republican convention to San Diego in the Hyatt bar, over a drink with the GOP’s Haley Barbour and George Gorton, Golding’s one-time boyfriend and California governor Pete Wilson’s top political operative.

That night, less than two miles from Southeast’s streets, Golding agreed that the city would pay whatever it cost to subsidize the convention. The bill to taxpayers would be sizable and is still not completely known. The mayor could disguise expenses by tucking them in corners of the city’s budgetary labyrinth. No true convention budget was ever to be made public, no real itemization of costs ever to be provided. Her rationale for the secrecy? Financial benefits of the convention would trickle down in the form of increased hotel bookings and taxi fares.

Millions of tax dollars would be spent covertly to subsidize a political party that called itself a champion of conservative values. With no public record, all involved could later deny any funds were wasted or misappropriated. The plot could succeed in part because the city’s daily newspaper had agreed to look the other way, its publisher having long wanted to host a party for the media elite at a Republican convention in San Diego.

It was all so disingenuous, Golding’s critics said, so brilliantly disingenuous and therefore so perfectly Susan Golding.

She was born in Muskogee, Oklahoma, in 1945 to Brage Golding, a conservative chemistry professor who was then in the Army, and his wife. Later, her father went into college administration. Susan was raised in Indiana, where her father was head of the chemistry department at Purdue University. Her official biographies say she was a straight-A student and a cheerleader. She graduated from Carleton College in Minnesota and got a master’s in romance philology from Columbia. She met Stanley Prowse, her first husband, the old clips say, sometime during graduate school.

He was a Harvard law student. They had two children. They moved to Atlanta, then came to California in 1974, where her father was president of San Diego State. Susan became active in politics, serving on the San Diego Unified School District’s Citizens’ Commission on Racial Integration. It was there she linked up with George Gorton, the first of two men who would mold her fledgling political career.

Gorton was a protege of Ken Rietz, the leader of Richard Nixon’s “kiddie corps,” the young political saboteurs made famous by Bob Woodward and Carl Bernstein in All the President's Men. During the 1972 Nixon campaign, Gorton, then 25, became national college director for the Committee to Reelect the President and hired college student Ted Brill to spy on a Quaker prayer vigil outside the White House. Brill later told Woodward and Bernstein that he had been hired to “set up” protesters on phony drug charges. Gorton later denied the charge, saying, “Woodward and Bernstein hurt me.”

A political pariah in the wake of Watergate, Gorton left Washington in 1973 and came to California, at first wholesaling records for Mike Curb, a Hollywood music producer and Republican party insider who would later become the state’s lieutenant governor. A year or so later, Gorton turned up in Del Mar.

Gordon Luce, chairman of the now-defunct Great American Bank and one of San Diego’s biggest political power brokers of the era, hired Gorton to raise money for the state Republican Party, which Luce chaired. Although officially cast out of Republican politics in 1974 by then-national party chairman George Bush, Gorton managed in 1976 to become press secretary to Jack Ford, a Gorton contemporary with a reputation as a hard-to-manage party boy, who was campaigning for his father, President Gerald Ford.

With Jimmy Carter’s victory that fall, both the younger Ford and Gorton returned to California. In 1977, with $50,000 in reported backing from Gerald Ford, they bought the tiny and foundering Del Mar News-Press. Soon, the paper’s biggest advertiser was John Mabee, a friend of the ex-president, who owned a supermarket chain and happened to be one of the county’s most generous Republican patrons.

Golding’s official biography says she was the paper’s associate publisher. Some sources say she also became Gorton’s live-in girlfriend and full-time political protegee. Former News-Press employees later told the San Diego Union-Tribune that Golding had mismanaged the paper. “It is hard to be a reporter when your paper never paid its bills,” one said. “The staff mostly blamed it on Susan, though it was equally the fault of Jack and George. The budget was totally out of control.”

Replied Golding, “I managed the News-Press, but I could only take what I was given. Within two or three months after I took over, the News-Press began to show a profit for the first time. Running a newspaper is a very risky business, but I was not an owner. I sweated blood, sweat, and tears over that place, counting paper clips to make it work.”

Less than two years after Gorton and Ford bought it, the paper was sold to a buyer who later complained that the supermarket ad money that had been coming in so regularly suddenly dried up. The Del Mar News-Press soon folded. Meanwhile, Gorton had gone back into politics. Again he was partnered with Ken Rietz and Jack Ford, as well as Bill Lowery, another ambitious young Republican. Their firm’s clients included Mike Curb, then-San Diego mayor Pete Wilson, and, in 1977, Lowery himself, who, with Gorton’s professional assistance, won election to the San Diego city council.

Through it all, Gorton and Golding remained close. Then in 1980, Lowery ran for Congress and was swept in by the Reagan landslide. Golding was soon presented with her first big political opportunity. After the News-Press was sold, she had dabbled in a series of part-time jobs and failed business ventures, including work as an executive assistant to Nathan Shapell, a Southern California housing developer, and raising start-up money for a cable television guide that was never published. But her real goal soon became the Third District city council seat Lowery was vacating, and Gorton was the key.

“Susan is exceedingly ambitious,” David Lewis, a San Diego political consultant who had worked with both Lowery and Gorton, told the Union-Tribune in June of 1981, several months after Golding was plucked from a field of 16 candidates and appointed to fill Lowery’s council seat by an eight-member city council dominated by Pete Wilson. “Her credentials are no worse than a lot of people in office. But it was Gorton’s influence that got her that seat. If she thinks any differently, she’s kidding herself.”

Golding responded, “So who didn’t have somebody lobbying for them?” She said she had moved into the district less than a year before getting the appointment. Charges by critics that she falsely registered to vote at an address in the Second District while contemplating running for an open seat there were dismissed by the district attorney as insubstantial.

Meanwhile, Golding’s marriage to attorney Stanley Prowse had long been troubled. Estranged for years, the couple finally divorced in 1979. She had taken custody of the children, Sam and Vanessa, then aged eight and five. A single mother and rising politician who lived in a Spanish-style bungalow across the street from Lowery in an upscale section of Kensington, the Third District’s most affluent neighborhood, Golding confided to friends she found it difficult to make ends meet on her $35,000 city council salary. Clothes were costly, as was the requirement to see and be seen at major social and political fundraisers. Politics, she concluded, was a rich man’s game.

As Golding geared up for her first city council campaign in the summer of 1981, she told a reporter that her two-year relationship with Gorton had ended and that she was “beginning her election campaign without his efforts.” About the same time, according to later court records, Golding and her ex-husband feuded over Prowse’s child-support payments. In one letter to her, Prowse blamed his “automotive excesses” for his financial difficulties.

Money was rumored to be an issue when, in February 1983, 14 months after voters elected her to a full council term, Golding suddenly announced she was resigning and moving to Sacramento to take a political appointment in the administration of newly elected Governor George Deukmejian as deputy secretary for housing in the department of business, transportation, and housing. The pay was $50,784 a year.

Union-Tribune reporter Anthony Perry wrote that Golding left because she was “eager to run for higher office,” but “felt trapped behind young, apparently well-entrenched o incumbents.” Replied Golding, * “I rule nothing out, but I’m certainly not going to Sacramento to run for something.” Though not admitting money was a factor, her decision to depart city hall, she said, “was hard, because I had no desire to leave. I had every intention of serving a full term.”

By most observers’ estimates, Golding’s city council legacy had been meager. She had begun her tenure less than two years earlier on an optimistic note, telling the Union-Tribune, “Midcity urban areas have always attracted me. I’ve lived in New York and Boston and Atlanta. They all had central cores that are absolutely rotted and still rotting. It’s a cancer that spreads through the whole city.” Then she proclaimed, “What’s exciting about San Diego — and I think this is why I got so interested in it when I moved here— is that the decay is minimal compared to these other cities. It may be the one major city in the country where, with the proper leadership and imagination and guts, we have a chance of stopping what is happening in those other cities.”

The Mid-City district Golding left behind for Sacramento, however, flashed every warning of incipient blight, from rising crime to decaying housing. Golding was an avid supporter of Wilson’s downtown redevelopment plans, which poured hundreds of millions of tax dollars into a roughly 20-block segment of the inner city, where office towers, hotels, a novel shopping mall, and the convention center received handsome subsidies. But a few miles away, in Southeast and Mid-City, in Golding’s own third council district, levels of blight and poverty crept upward.

Whatever her true reasons for heading north in those early winter months of 1983, Golding had embarked on yet another journey. She confided to Prowse that she was in love with Richard Silberman, an influential Democrat, reputed to be fabulously rich and an intimate associate of ex-governor Jerry Brown.

Silberman was involved in an unorthodox venture to extract gold from the gravel bed of Northern California’s Yuba River. He’d also quietly become a lobbyist, attracting a roster of Japanese corporate clients eager to trade on his connections with Brown and other state Democrats. A longtime San Diego-based wheeler-dealer, Silberman was then spending most of his time in Sacramento.

The Golding-Silberman affair had, according to a court document later filed by Stanley Prowse, begun the year before, while Golding was still on the city council. “On occasion I also picked up and delivered the children to Dick’s house in Balboa Park when I visited from Los Angeles after Susan and Dick started dating in 1982,” he wrote. “The house was big and full of art and likewise impressive,” he recalled.

“Susan talked to me on the phone about marrying Dick shortly after she moved to Sacramento in the spring of 1983,” continued Prowse. “She told me she thought she loved him and that they were talking about getting married but that she was nervous about it, particularly in light of their age difference and the fact that she was building her political career as a Republican while he was a prominent Democrat. I told her her fears were justified and that she should ask him to settle a substantial sum on her when and if they married, so that she would feel secure and not dependent on him. She told me she thought my advice was sound. I did not doubt that she had followed it when she and Dick were married the following year.”

Nineteen eighty-four was fateful for Golding. That April, a year after taking her job in the Deukmejian administration, she was suddenly on the move again, to the well-to-do San Diego neighborhood of University City. Gone were Golding’s praises for life as an inner-city denizen. A seat for county supervisor had opened up, and Golding, with Silberman’s personal attention, political expertise, and money, vowed to win it. Some later claimed the candidacy was Silberman’s idea and that certain of his Japanese clients would reap a bountiful harvest.

It was a bitter and expensive campaign, pitting Golding against Lynn Schenk, herself a former Silberman protegee in Jerry Brown’s administration. County law limited campaign contributors to $250, but the law exempted personal loans from the candidate. Silberman’s assets were Golding’s under community property laws, she said. After Golding married Silberman on July 22, 1984, she pumped almost $250,000 into the race in the form of personal “loans” from the couple to the campaign — 43 percent of the campaign’s total budget, the Los Angeles Times reported.

For months the two candidates wrestled in the political mud, and then, after Golding’s narrow triumph, they went to court, each charging the other with mailing libelous hit pieces to voters. Schenk eventually won that battle, but Golding claimed the prize, for herself as well as her new husband: the seat on the county board of supervisors she would hold for the next eight years. Together they would make policy — and controversy.

A few years before Brown left office, Silberman had become a lobbyist for a series of Japanese multinational corporations, which were seeking to abolish the state’s so-called unitary tax, which took a small percentage of each company’s total income, whether or not it was derived from doing business in California. For years the Japanese and other foreign interests had sought without success to change the law. In the fading days of the Brown administration, Silberman began selling his purported influence over the governor on behalf of that cause as well as others dear to the manufacturers. His new wife would also play a key role.

To act as fronts, Silberman had set up two groups, the California Unitary Coalition and the California Investment Environment Coalition. The address of the latter was the Kearny Mesa headquarters of the Kyoto-based ceramics giant Kyocera, an early and lucrative Silberman client. “We got connected with Dick in the late ’70s,” William Everitt, a Kyocera vice president, told a reporter in a 1992 interview. “He was a great guy, very supportive of us. And we got verbal commitments from [Jerry] Brown, too, that he would support our efforts to abolish the [unitary] tax because he felt it was very unfair.”

To help get its message across, Kyocera and other foreign companies funneled hundreds of thousands of dollars in gifts and campaign contributions to California politicians, including Brown, during the early and mid-1980s. In 1984 alone, reported the San Jose Mercury News, the Silber-man-run California Unitary Coalition handed out $178,000. In 1985 the Cdifornia Investment Environment Coalition spent $370,000, according to the Mercury News.

Silberman’s new wife was among the beneficiaries. Campaign contribution disclosure records showed Golding collected money from Kyocera’s Everitt and from Rodney Lanthorne, listed as a Kyocera vice president. The new county supervisor accepted meals and “transportation” from both Kyocera and Sony and traveled frequently to the Far East with Silberman. In 1985 she reported that the two Kyocera-backed lobbying groups run by Silberman each provided the couple with “over $10,000” a year in income, the maximum reporting category.

In May 1985 Golding convinced her fellow supervisors to set up the San Diego International Trade Commission. In a letter to her colleagues, she said the new board was needed to demolish “existing trade restraints.” An accompanying list of commission members included Kasey Hasegawa, president pf Kyocera International.

The commission touted the benefits of Tijuana maquiladoras that benefited from low Mexican wages but avoided U.S. customs duties under a special loophole in federal law. Japanese manufacturers, including Kyocera, flocked to the new maquiladora zone and began lobbying to expand it.

Golding became known as the free-trade supervisor, traveling to Washington and various states, talking up the “miracles of the maquiladoras” and eagerly lobbying congressional committees for the incipient NAFTA treaty. She wanted to create even more jobs, she told her audiences. Free trade with Mexico was the way of the future, she said. And with it, her own future looked bright indeed. She and Silberman were planning her next move up the ladder. “She’s a terrific woman,” proclaimed Kyocera’s William Everitt. “And for what it’s worth, I support her for mayor.”

Golding’s free-trade agenda dovetailed neatly with that of Silberman. In 1987, Everitt recalled later, the company wanted to buy a new maquiladora site in Tijuana, owned by Silberman’s close friend and longtime business associate Carlos Bustamante. The wealthy Tijuanan often figured in Silberman’s moneymaking schemes. In 1979 the New York Times broke a story alleging that Bustamante had given Jerry Brown $40,000 of unreported campaign contributions. Said Everitt of Silberman, “He was always trying to make deals.” Kyocera’s factory was completed in early 1989. That April, Silberman was lured to a room at the Hyatt Islandia hotel on Mission Bay by the FBI and arrested for money laundering.

Golding’s political dreams seemed at an end. She and Silberman were photographed in tearful embrace on the courthouse steps after his arraignment. The big-spending political couple, it was revealed, was virtually broke. The Yuba gold mine had gone bust, and San Diego’s former financial wunderkind had been snared in the FBI sting when he embarked on a desperate and irrational scheme to launder money for what turned out to be an imaginary drug lord. Wiretaps that became public during the trial confirmed suspicions that Silberman hadn’t hesitated to trade on his wife’s political position.

In numerous conversations recorded in early 1989 and summarized by the FBI, Silberman would refer callers to Golding’s office and seek favors and influence in return. He talked county business frequently with Jerry Zanelli, a former lobbying associate on behalf of the Japanese, for whom Silberman had helped arrange a county lobbying contract. Larry Stirling, a municipal court judge, called Silberman to lobby for a bigger courthouse and jail. An “unidentified male” called to talk about a “Keough meeting in Mexico that D.S. and S.G. will attend.”

On February 13, according to the FBI notes, Silberman said he “talked to Bustamante this weekend. Bustamante told R.S. about his deals, and in two weeks ‘Inamuri’ [a wealthy ceramics tycoon] is coming to town. Inamuri is pushing the idea of a twin plant so he can bring his buddies in.”

On February 15, a caller identified as Bustamante said, “I turn over the factory on the last day of the month. It’s about $400,000 plus the contract.”

That same day, according to an FBI summary of the taps, a Kyocera vice president called to confirm a reception on February 24 at the county supervisors’ building. The supervisors were “holding a reception for city and state officials for T.J. business.” The vice president said he “feels honored of recognition.” Silberman then said he “needs the resources of Inamuri.” Moments later, Silberman called Golding’s executive secretary “re: reception plans. They discuss inviting some prorpinent Japanese businessmen from Sony [and] Panasonic.”

Later in the day, a man identified as Peter Ayleward of the Strategic Property Co. called and said he “was a friend of Dick. He wants an intro to Mitch Burnham (phonetic), Susan’s new assistant. They discuss pending action by one of Susan’s committees. D.S. wants to patch him to Susan’s office.”

In other conversations, Silberman was caught talking to female friends about what seemed to be non-business-related topics. “R.S. says he has told C.M. what he wants to do with her. R.S. says he doesn’t want to wear her body out. C.M. says she can’t take it. They discuss lunch and the fact that C.M. left depressed. C.M. doesn’t want to give up yet on their relationship.” Later the same day, Silberman was back to business and on the phone to Golding’s campaign treasurer. “D.S. for Bob Miller. Discuss letter about funds left in S.G.’s account paying for the deficit. R.S. asks B.M. to get the balance in the account.” Still later, Silberman was on the phone to. a woman identified as Nadine. “D.S. wants her to give him and Susan a massage tomorrow afternoon.”

In the summer of 1990, Silberman was convicted. His tearful wife said she would stand by him, come what may. Less than a year later, Golding filed for an uncontested divorce. Making the announcement was George Gorton, who had risen to become one of Pete Wilson’s most intimate and powerful insiders. While Silberman was bused off to do two years in a federal prison in the Mojave Desert, Gorton and Golding planned her next move.

Golding’s political career had been strangely unaffected by the revelations of the previous year and a half. If Golding herself had ever been recorded on any of the wiretaps, they were never released by the government. The federal investigation ended with the conviction of Silberman and several other co-conspirators, including local mafioso Chris Petti, who ended up doing a harsh ten-year stretch in a maximum-security prison outside Denver. Any embarrassing questions raised by the wiretaps remained unexplored.

The Union-Tribune had run numerous exposes on the hapless Silberman, who had once courted and later spurned its publisher, Helen Copley. But the paper claimed that Golding was an innocent bystander, and it never reported the couple’s Kyocera connection or any of Silberman’s other strange dealings. When she ran for mayor against environmentalist Peter Navarro in the fall of 1992, Golding was reborn: a moderate Republican pledged to “revitalize” the city’s sagging business climate, hard hit by the end of the Cold War and the bursting of the savings and loan-backed real estate bubble of the Reagan era. Though the race was close, Golding pulled it out.

After the turmoil of the Silberman years, Golding’s stint as mayor has been placid, if ineffectual. She vowed to cut taxes and water rates for businesses, such as Sony and Kyocera. She promised to build a downtown sports arena, which didn’t happen. She brought the Republican convention to town. She claims to be responsible for the drop in the city’s urban crime statistics, a trend that has also been noted across the nation.

She championed the move to expand the stadium without first getting voter approval. The project’s chief beneficiary, Stockton developer Alex Spanos, who owns the San Diego Chargers, has given huge sums to the campaign treasury of Governor Wilson and was also a key player in the move to bring the convention here. He has also provided Golding with free rides on his corporate jet and is said to be paving the way for her run for the U.S. Senate in the Republican primary two years hence. But earlier this year, the stadium controversy led to an intersection with her past, and she was forced to choose among patrons.

A group led by ex-city councilman Bruce Henderson challenged the stadium proposal in court, arguing that the city charter required the $70 million bond debt be submitted for a public vote. Henderson’s challenge, still pending, so infuriated members of the city council that they voted to punish him by stripping already-budgeted money for expansion of the city’s Japanese garden in Balboa Park, one of Henderson’s pet projects.

When backers of the garden, a tranquil Zen-like place far from the politics of city hall, pleaded with the council to reconsider its action, they brought along Kyocera exec William Everitt to make their case. The council was not placated. The motion to restore the money was defeated on a 7-2 vote. Golding voted in the minority, on Bill Everitt’s side.

— Matt Potter

SUSAN GOLDING’S EX-HUSBAND’S RISE TO THE TOP

Tarnished Gold and Glory

One hot summer evening in 1982, Jerry Brown was inside a cramped private jet bound for San Diego in what most of his staff already knew to be a futile pursuit of a seat in the United States Senate.

Silberman and Golding on the eve of her election to the board of supervisors

Silberman and Golding on the eve of her election to the board of supervisors

The two-term Democratic governor, the quirky populist champion of less-is-more government, so full of promise less than a decade before, had performed disastrously as a presidential candidate in 1980. Two years later — his attention span questioned, his utopian penchants ridiculed in “Doonesbury,” his liaison with Linda Ronstadt the butt of political commentators’ jokes, and his poll numbers plummeting — Brown decided to forego a reelection bid in favor of a race for the senate, hoping he could more easily reinvent himself for a cynical electorate.

By the time Brown’s plane landed in San Diego and taxied to the private Jimsair terminal at the east end of the runway where a small contingent of reporters awaited, it was clear the strategy wasn’t working. Brown’s Republican opponent, San Diego mayor Pete Wilson, was virtually certain to prevail.

But there remained a few diehard believers aside from Brown himself. One was Richard T. Silberman. He was out in the Jimsair hangar that night, planning strategy behind the wall that separated groups of waiting reporters and incoming dignitaries. The problem of the hour was an embarrassing disclosure made at a campaign dinner by one of Brown’s appointees. In the panic of the campaign, Silberman had inflated the story to fatal proportions.

Tall, thin, intense, immensely self-important, Silberman paced the hangar out of sight of the reporters, plotting a strategy of denial, even though it was clear from the context of the aide’s remarks that Brown had known of the problem for months. When the plane pulled up to the terminal, Silberman, frantically waving a copy of the small wire service story that had appeared only hours before, beckoned Brown’s party into the hangar and away from the reporters. Consumed by the relatively minor revelations, Silberman outlined his simple strategy. “Just deny it,” he told the governor in the presence of his bodyguards and a few very junior campaign aides looking on in amazement. “Deny, deny, deny.”

Brown, a seasoned campaigner, glanced at the trembling Silberman and the scrap of paper he was holding. “We’ll see,” he said. “Now let’s get going. Open that door.” Brown and his small retinue, state police in the lead, Silberman at the rear, emerged to face the reporters. In the glare of TV lights, the local press contingent lobbed a few softball questions. No mention was made of the story. Brown and company swept through the small waiting room and into a rented limousine for the trip to the fundraiser. Silberman took out a handkerchief and mopped his brow. Another bullet dodged.

Today, Brown and Silberman live across San Francisco Bay from each other, Brown in a high-tech commune of sorts in a remodeled Oakland warehouse, Silberman in a $450,000 condo in San Francisco. In the interim, Brown has run twice for president, threatened to start an independent party, and hosted a radio talk show, and he remains a political novelty. Silberman bought a gold mine, married a rising San Diego Republican political star, and served two years in federal prison for money laundering.

Now, according to news reports, Silberman works part-time as a consultant for a pizza chain owned by one of Brown’s old San Diego financial backers. He attended the funeral this spring for his old friend and business partner, M. Larry Lawrence, owner of the Hotel del Coronado. Otherwise he has been out of public sight, with no visible means of support and thousands of dollars of tax liens against him.

Silberman moved to San Diego with his family when he was seven. His father, Isadore, was a rag dealer. Richard attended Hoover High and went on to what was then San Diego State College, from which virtually every powerful — and crooked — San Diego personality has graduated. Legend says he began his business career fixing television sets, but by the 1950s he had switched to selling his self-proclaimed financial genius. San Diego was a wide-open town in a get-rich-quick era. The dawning space age would make everyone rich, Silberman told all who would listen. His electronics genius was the key, he said.

He had teamed with La Jollan Charles E. Salick, who owned the KFMB television and radio stations, and by 1962 the men were getting glowing write-ups in the local press. “Investors have put combined market values of some $150 million on three electronics-oriented companies headed by two young San Diegans,” the San Diego Union wrote that year. A few years later, the paper reported that Silberman was “one of eight San Diego-area men whose biographies will appear in the 1965 edition of Outstanding Young Men of America. ” There was no description of exactly what sort of electronics Silberman dealt in.

Silberman, married and with a young family in Mission Hills, told the paper, “I spend half my time on airplanes. I get back to San Diego every five or six weeks. I’m working harder than ever now — about ten hours a day. I guess work is what keeps me where I am.” The paper seemed to record his every deal with Salick. “$75 million bank purchase readied,” declared one Union headline in 1962. The accompanying story reported that Salick and Silberman had “obtained exclusive right to purchase the 93 percent stock interest in First Western Bank.”

For years, Silberman seemed to be made of Teflon; bad news never stuck, and the Union and Tribune always looked the other way when circumstances might have tarnished his image. In 1967, when Salick suddenly pulled up stakes and moved his operations to the Bay Area, the Union didn’t even mention the Silberman connection or why he was leaving town. Instead it simply quoted Salick, “San Diego is a great place to live. I have nothing against this city at all. In fact, I’m one of San Diego’s biggest boosters.”

Years later, in September 1970, Business Week reported that Salick had in 1968 been barred by the Securities and Exchange Commission “from further violating certain securities laws” after consenting to an “injunction without admitting to the SEC’s charge that he had violated the laws.” The magazine’s Salick profile was occasioned by news that a Swiss bank he had owned — the Bank of Salick — and later sold to United California Bank, had suddenly reported a large loss due to “unauthorized commodity trading.” Paul Erdman, a Silberman confidante, resigned as chairman and president of the bank and would later end up in a Swiss jail, where he began a career as a novelist. The bank subsequently folded, costing UCB millions of dollars.

By then Silberman had begun his own new career, as the “boy genius” financial partner behind Bob Peterson, another San Diego State alumnus, who had started the Jack in the Box fast-food chain. After trying to syndicate the restaurant company in various forms, the pair finally convinced Ralston-Purina to buy it for $58 million worth of Ralston stock in January 1968. The two San Diegans joined the Ralston board, but not for long. After a scandal said to involve insider trading in the stock of a rival fast-food outfit, both Peterson and Silberman departed the board, millions of dollars richer. Their next conquest San Diego’s Southern California First National Bank.

In mid-1968, the pair acquired a 22.8 percent controlling interest in the bank, which until then had been a bastion of old-line, country club WASPs. In 1979, four years after Silberman and Peterson sold out to the Bank of Tokyo, the old executives came back to haunt Silberman during his state senate confirmation hearing as Jerry Brown’s secretary of business and transportation.

A July 1979 story in now-defunct New West magazine claimed that under Peterson and Silberman the bank made millions of dollars in loans to friends, associates, and even themselves, and that many of the loans ultimately went bad, costing the bank more than $20 million. One of the loan recipients, New West reported, was the notorious John King, a Denver wheeler-dealer later convicted of fraud. Supposedly, said the magazine, Silberman and Peterson were working in cahoots with King to take over the mutual fund operation of Bernie Cornfeld, another high-flying mogul of the era who eventually crashed. The magazine also accused the pair of hiring Silberman’s old friend Diane Powers to redecorate the bank and its branches. Silberman denied he profited from the deal.

None of it hurt him. Not accusations of conflict of interest and improper dealings in liquor licenses with his partner Diane Powers at Bazaar del Mundo, the Old Town shopping complex she and Silberman built on land cheaply leased from the state. Not the $10,000 he had raised in campaign contributions from La Jolla’s Allen Glick, the mob-linked Las Vegas casino owner. Not the $5000 for Lieutenant Governor Merv Dymally he collected from Moe Dalitz, an owner of the La Costa resort and a well-known racketeer and organized crime associate. Not the bizarre love affair with the town’s Republican newspaper doyenne, Helen Copley, who was said to be crushed when he abandoned her to marry Susan Golding, a much younger, rising Republican political star. Not even the end of Brown’s fluky reign as champion of counterculture politics.

Silberman turned his experience with Brown into a lucrative lobbying operation. He worked for Japanese companies that wanted —and were willing to pay Silberman big money for — everything from bullet trains along the coast to tax-free transactions on color televisions and computer chips. He set up a gold mining operation he said was an idiot-proof way to make a fortune in the stock market. He hung out with rich chums like Tijuana millionaire Carlos Bustamante, whom The New York Times reported had used his relationship with Silberman and campaign contributions to get financial favors from Governor Brown. Silberman escorted his new wife, a newly elected county supervisor, to Sacramento, where they dropped hints about her interest in running for lieutenant governor and touted new trade freedoms for Japanese imports. So smooth. So smart. He had always seemed born to success.

And then, suddenly, it was over. The rich, famous, wellloved Richard Silberman got caught in an FBI sting. He was overheard on a wiretap of a small-time local mobster offering to launder drug money for a percentage. Set up by the bureau, he spent months as a would-be money courier, arranging with another old political chum to funnel money through the back channels of Swiss banks. When busted in a Mission Bay hotel, he broke down and offered to finger half of San Diego’s establishment.

But the feds weren’t interested in anyone else. Found guilty after a trial full of pathos— he and his wife were photographed in tearful embrace each day of the trial at the courthouse door — Silberman was shipped off to federal prison in the high desert near Boron. His wife soon divorced him and ran for mayor. When he was paroled two years later, he slipped off to live quietly near San Francisco in a house belonging to a nephew from his first marriage.

His public career over, the old stock speculator had time to reflect on the fact that the shell of the gold company he had assembled had since been taken over and used by others, among them his wily old friend Larry Lawrence, to buy up water rights in desperately parched western states. Within five years after Silberman’s downfall, the stock of the company had rocketed from pennies to more than $30 a share. Silberman sued the company for a debt he said was owed, and he lost.

— Matt Potter

DEAR DICK

Nixon's Lackeys in the Local Press

Richard Nixon called San Diego his lucky city and for a good reason. He had the newspaper in his pocket.

Klein: wrote on the newspaper’s stationery to Rose Mary Woods, Nixon’s secretary, advising her on how to handle public relations for Pat Nixon

Klein: wrote on the newspaper’s stationery to Rose Mary Woods, Nixon’s secretary, advising her on how to handle public relations for Pat Nixon

Chances are, if you wrote a letter to Richard Nixon when he was vice president in the 1950s, it has ended up in the National Archives, housed in a concrete building in the Orange County town of Laguna Niguel. Based on the trivial nature of much of the material, Nixon seemingly saved every scrap of correspondence from his durable career, from his 1946 congressional campaign through his White House years.

Every letter, every memo, every Dictograph recording, every reel of tape was indexed and filed away for posterity. Just how complete a collection he handed over to the government in the early 1960s, after leaving the vice presidency, was known only to him and a few close associates. But the letters to Nixon from James Strohn Copley, adopted scion of San Diego’s premier newspaper family — and Nixon’s responses to his fawning correspondent — have survived. They tell a tale of a relationship between two young men, one who had inherited title to a growing and powerful newspaper chain, and the other, a cunning politician who appreciated the value of friendly propaganda served up under the cover of “news.”

Nixon’s most famous media mentor was Kyle Palmer, ostensibly the “political editor” of the Los Angeles Times, but actually the chief political operative for Times publisher Harry Chandler.

“Kyle Palmer and the Los Angeles Times created Richard Nixon,” wrote David Halberstam in his book on the Times, The Powers that Be. But Copley, and many of his top editorial employees, also played an important, if less recognized role in Nixon’s early career, as his correspondence with the future president makes clear.

As the presidential race between Nixon and John F. Kennedy went down to the wire in the fall of 1960, Jim Copley knew, perhaps better than Nixon himself, that a big Republican vote in San Diego might ,make the difference in a close election. In a letter dated September 13, 1960, Copley made an oft-repeated vow:

Dear Dick:

As you know, I am going to do everything possible through the Copley Newspapers to assist you in your campaign. I feel so vehemently that we need you as the next President of the United States.

In your campaigning, I certainly hope that you will not overlook San Diego. It is now the nineteenth [sic] city in the country. I believe I can swing a lot of the votes into your column. However, I feel it is imperative that you include this city on your schedule to be sure you will get the full support you deserve. I discussed this with [ Union editor] Herb Klein. He assured me you were going to come here, but I thought I would take this opportunity to personally give you my sentiments on the subject....

When in response Nixon did schedule a campaign stop in San Diego that fall, Copley immediately wrote him, “The San Diego Union and Evening Tribune will do everything they can to help get an excellent turn-out for you.” Although he lost narrowly nationwide, Nixon routed Kennedy in San Diego and thereby carried the state. Years later, Copley reminisced about his role in the election. “In 1960, California went for Nixon by 23,000 votes, and an interesting comment on that is that San Diego gave him a margin of 53,000.”

Nixon’s letters to Copley show that he well recognized the influence of the Copley newspapers over San Diego voters and the slant of the news coverage in his favor. “I want to thank you for your letters of September 22 and tell you how much I appreciate your efforts towards ensuring a big turnout on October 11,” Nixon wrote.

“The all-out assistance you are giving us — ranging from the loan of [San Diego Union editor] Herb Klein and [Union reporter] Peter Kaye to the help on the San Diego programs — is most gratifying. I only wish I had more like you!”

After the election, Nixon wrote a long letter of thanks to Copley, “The support of the Copley newspapers was absolutely magnificent. We had the support, as you know, of a majority of the publishers and editors of the country but what distinguishes your papers, as I have often told you, is that you don’t stop at the editorial page— you see to it that the coverage on the front page is fair and objective.

“Finally, I want to tell you again how much I appreciate your having made it possible for

Herb Klein to be with us during the campaign. As I am sure you know, he had a terrible assignment, working with a press corps that was 80 percent hostile.” Nixon’s praise for Klein had become a routine of each Nixon campaign. Copley would “lend” the editor to Nixon; at the end of the campaign, Klein would invariably return to the Union.

Four years earlier, in the fall of 1956, after the presidential campaign that year, Nixon had written Copley, “This is just a note to tell you what an excellent job Herb Klein did for us during the campaign. I want you to know, too, how much we appreciated the sturdy, never-wavering support we received from the Copley newspapers in California and Illinois. My only regret is that you don’t have a paper in every one of the 48 states! Also I don’t know what we would do in a campaign if we didn’t have Frank Kuest along with us. He is not only a hard-working and able reporter, but he never fails to buck our spirits up when the going is tough.”

And in 1958 Nixon wrote, “I deeply appreciate your kindness in releasing Herb Klein to us during the campaign period. As usual, he did a superb job, and he was of invaluable assistance throughout the entire time he was with us. You can indeed take pride in the good showing of the Republican candidates in the San Diego area, as I am convinced that a great measure of the credit for this result lies at the door step of the Copley papers which you so ably head.”

In fact Klein was always a Nixon insider, whether employed as an editor at the Union or officially on Nixon’s campaign payroll. In 1959, while still running the Union, Klein wrote a letter to Nixon, advising him on various media strategies for the coming campaign. “If time will permit, while you are in Los Angeles, it would be a good gesture to invite up for a brief talk Rafer Johnson, who recently was named California athlete of the year and is president of the UCLA student body. He is a very fine young colored lad who, you will recall, won fame by beating the Russians in the decathlon. I think this could be arranged very easily and again would make an interesting picture. A clipping on him is enclosed.”

The year before, Klein, then associate editor of the Union, had written on the newspaper’s stationery to Rose Mary Woods, Nixon’s secretary, advising her on how to handle public relations for Pat Nixon, the vice president’s wife. “It should be made standard operating procedure that coffee will be served to the girls during Pat’s press conferences and that she will be available for such a conference at any time the Vice President has one.”

Klein also volunteered to plant negative stories about the opposition in newspapers, using the press connections he had developed in his position as San Diego Union editor. In 1958 he wrote Woods on Union stationery, “I would like to know if the boss [Nixon] would be interested in having me leak it to two or three Washington pundits who seem to think that the election results came as a surprise. I am thinking especially of [New York Times columnist] Scotty Reston. I think it would not be advisable to leak any of the other sheets.”

In the same letter, Klein also asked Nixon for cash to reimburse Bob Wilson, a Republican congressman from San Diego, for political expenses run up on a trip to Alaska. “Bob, I know, is rather shy about mentioning money, but I know from talking to him that he has spent seven or eight hundred dollars out of pocket on expenses and plane tickets and the like. I believe also that there was some understanding between him and RN over the fact that the national committee would provide some sort of a fee for his work there.”

Woods cryptically replied two weeks later, “Bob Wilson did receive a check — I hope he felt it was adequate — it was the best we could do.” The rest of the letter was deleted from public review under terms of Nixon’s gift to the National Archives.

Even after Nixon lost the presidency to Kennedy in 1960 and Klein returned to the Union, he was still sending his old boss intelligence missives. “While I was at the UPI Conference, Kennedy was on the program just prior to me. I had prepared a speech attacking his press policies which I proceeded to give. Spot coverage of my comments also was good. Editor and Publisher on its front page last week ran an account of the two Kennedy comments and some of my comments.”

In early 1962, as Nixon was preparing to challenge incumbent California Governor Pat Brown for reelection, Klein remained busy with his double duties as newsman and Nixon mole. He wrote Nixon, “Enclosed is a copy of two of the Field Reports, which show you stronger than ever against Brown. The second is particularly interesting regarding 1964. We will give this good display and I intend to send copies of it to a number of newsmen in Washington.”

About a year earlier, Nixon was still avoiding most contacts with the press. Except the Copley Press. When Copley columnist Neil Morgan sought to interview Nixon for Esquire magazine, Herb Klein ran interference, assuring the reluctant Nixon that Morgan was friendly.

“As I said earlier,” Klein wrote Nixon, “Neil is an admirer of yours and is rapidly winning

attention as one of the leading biographers of the new West. He currently is writing a book on the West and has a twelve-page article in Esquire this month on the same area.”

Morgan also wrote Nixon, assuring the ex-vice president that “I would submit my draft of the piece to Herb Klein or you to be read for accuracy. As for point of view, I can assure you of my friendliness. One reason Clay Felker at Esquire tapped me for the assignment must be that I lost an election bet to him. You may be interested that this week he refused to renew his bet on Kennedy in the event that the two of you meet in 1964.”

Nixon finally wrote Morgan saying, “Both Herb Klein and my secretary have told me of your willingness to come to Los Angeles on a few hours’ notice and interview me at my convenience. You may be sure that as soon as my schedule permits such an appointment, I will have Miss Woods give you a call to work out the arrangements.” After the interview was done and the story published in early 1962, Morgan wrote Nixon, “Thank you for your gracious letter about my Esquire article. And congratulations on the loud clear voice you already have raised on California affairs. Your position on the John Birch Society is statesmanship of a level to which California is unaccustomed.” The columnist concluded his letter to Nixon with a reference to the gubernatorial candidate’s new book, “I look forward to a copy of your book and will do what I can to make San Diego sales smashing!”

— Matt Potter

THREE THAT COULDN’T

Homegrown S&L Failures

From small, conservative beginnings, San Diego-based Great American Bank grew into the country’s seventh-largest publicly held savings institution under the direction of Gordon Luce, a high-profile Republican who joined the thrift in 1969, when it was called San Diego Federal Savings and Loan Association and had four branches and assets of $300 million. In 1989 Great American counted $16.2 billion in assets and 214 branch offices spread throughout the West, most in California.

Luce: helped kick off Pete Wilson’s career and was an early booster of Ronald Reagan

Luce: helped kick off Pete Wilson’s career and was an early booster of Ronald Reagan

With his aggressive branch building and marketing -— ATM network, standardized branch design, employee uniforms — Luce helped establish the idea of a statewide S&L. Further expansion came in the mid-’80s, when Great American began to acquire or merge with other thrifts, primarily in Arizona, Los Angeles, Colorado, and Washington.

Prominent in local business, political, and social life, Luce descended from a pioneer San Diego family (his grandfather founded the law firm that is now Luce, Forward, Hamilton & Scripps; his father, second cousin to Time magazine co-founder Henry Luce, was a judge and state senator). Luce helped kick off Pete Wilson’s career and was an early booster of Ronald Reagan’s political ambitions, becoming both fundraiser for and close advisor to the ex-actor. As California governor, Reagan appointed Luce state secretary for business and transportation. Sixteen years on, as president, he made Luce a United Nations alternate delegate, and his administration found posts for three other current or onetime Great American officers.

This was later taken as evidence for one of 11 criminal allegations against White House counselor Edwin Meese III when, in 1984, Reagan nominated him for U.S. attorney general. Former La Mesa resident Meese was accused of conferring government jobs in exchange for personal loans. Great American had lent him $400,000 and took no action when his repayments lagged 15 months in arrears, except to lend him more money so he could “catch up.” A special prosecutor noted that Meese “was involved in varying degrees” in the four Great American-related appointments, but couldn’t find grounds for an indictment.

At the close of the ’80s, in step with S&L failures nationwide, Great American suffered a speedy decline. Bad loans, mostly in Arizona, had proliferated with recession and collapsing real estate prices, which also devalued the thrift’s own several thousand properties, held by its development subsidiary. In 1990 Luce retired. Trying to stay solvent, Great American sold its California branches and deposits to Wells Fargo Bank, but it wasn’t enough. The Resolution Trust Corporation (RTC), the federal agency that liquidated failed S&Ls, seized the thrift’s remaining assets in August 1991. Depositors’ money was federally insured, but in 1993 shareholders won a $15 million settlement to be shared with the RTC, which therefore agreed not to sue Great American insiders in connection with the failure. The RTC sold the Arizona and Washington branches in 1994, the coda to Great American’s 109-year history. Taxpayers would be tapped for more than $1 billion to settle accounts.

San Diego’s two other large S&Ls, HomeFed Bank (formerly Home Federal Savings & Loan) and Imperial Savings, also toppled. Once the nation’s fifth-largest thrift — $18 billion in assets, 210 branches — HomeFed was the largest to fail. Like Great American, it was fatally vulnerable when property values plunged, losing more than a billion dollars by 1992, when the RTC took over. In 1993, at a special House Banking Committee hearing held in San Diego at the city council’s request, an RTC vice president disputed charges by local officials and real estate professionals that the agency was unloading seized HomeFed properties too cheaply, thereby further depressing the San Diego market. Chatsworth-based Great Western Bank later bought HomeFed’s San Diego County branches and deposits, despite the wishes of Mayor Susan Golding and HomeFed employees, among others, that local ownership be retained in some form. Last February, a federal judge dismissed felony fraud and conspiracy indictments against three onetime officers of HomeFed’s real estate development subsidiary.

At its 1988 peak, Imperial Savings listed $12 billion in assets, employed 3000, and ran 78 California branches. Regulators took over in 1990, after the thrift reported huge losses from its high-risk portfolio of auto, consumer, and mobile-home loans, equity investments, and junk bonds (in which its stake was once the second largest among S&Ls). At the time the RTC sold off Imperial’s branches and deposits, it put the cost of the bailout at $1.6 billion. Last year, a federal jury acquitted a former Imperial vice president and two principals of a failed Orange County thrift of tax fraud, bank fraud, and bribery charges. The indictments implied that the defendants had contributed to both institutions’ demise.

— Mani Mir

GOING BROKE

Notable San Diego Bankruptcies

1973—U.S. Financial real estate development

1974—Westgate-California C. Arnholt Smith’s conglomerate

1984—J. David & Company commodities investment

1985—Amtel Communications pay-telephone operator

1987—Plaza International Hotel (in Mission Valley)

1989—William French Smith III son of former U.S. attorney general

1990—Kaypro microcomputer manufacturer

1975—Royal Inns of America motel chain

1991—Pioneer Mortgage trust-deed lender

1982—Wickes Companies general retailing

1992—Intermark (and subsidiary Triton Group) holding company

1982—-Nucorp Energy oil and gas exploration

1993—Wadie Deddeh (now former) state senator

BALD-FACED LIES

Rolls-Royces, Jaguars, Ferraris, Maseratis

With only three and a half years left in the decade, it seems the.’90s won’t yield a San Diego financial scandal more entertaining than that of J. David. That affair, which climaxed in 1994, was a more provincial circus than the O.J. murders, but it had a kindred luridness and similar made-for-TV-style plot twists. If no one was slashed to death, J. David’s victims had more in common with Nicole than do the average dupes of the average Ponzi scheme. Many were minor-League celebrities — wealthy, prominent fixtures in San Diego and Orange Counties’ political and social establishments — who took a big risk to satisfy big greed.

Dominelli: had a glass jar in his office filled with $50,000 worth of rare coins.

Dominelli: had a glass jar in his office filled with $50,000 worth of rare coins.

The saga began in 1979, when an awkward, bespectacled stockbroker named Jerry Dominelli set up office in the basement of a Mexican restaurant in La Jolla. Dominelli’s stock-trading record had been mediocre, but J. David (as he called his new venture) was to invest its clients’ money in gold, financial futures, foreign currencies, and other commodities. To launch his business, Dominelli distributed a document that described how in 1977 he had parlayed $5000 into more than $52,000 worth of Swiss francs, British pounds, and other financial instruments. In 1978 he’d transformed $10,000 into almost $85,000, the document testified, adding that even in 1979’s bear market, Dominelli had more than doubled his money.

These were bald-faced lies, but no one caught them at the time, and funds began to trickle in. Implementing Dominelli’s vision of how the money should be invested was Nancy Hoover, a former Del Mar mayor and city councilwoman who had worked as a broker alongside Dominelli at Bache Halsey Stuart Shields (now Prudential Securities). After Dominelli left Bache and founded J. David, Hoover handled his orders at the brokerage house. By then she had also become his lover (both were married to other people), a coupling that struck the limited number of people who knew about it as absurd.

Hoover: made no secret of her desire to see San Diego’s “reactionary” political establishment overthrown by a new class of liberals

Hoover: made no secret of her desire to see San Diego’s “reactionary” political establishment overthrown by a new class of liberals

Glamorous and golden-haired, Hoover towered over Dominelli. A liberal with cravings to reform San Diego’s political establishment, she also aspired to be a big-time philanthropist and arts patron, and she had the vivacious sociability to fill that role. Dominelli, in contrast, was crude-spoken and introverted. But as the months passed, others too began to feel that his awkward eccentricity masked extraordinary talents. “He would abruptly walk out of a tense meeting in midsentence, mumbling as he stared into space,” writes San Diego Union-Tribune financial editor Donald Bauder in his 1985 book Captain Money and the Golden Girl. By 1981, Bauder says, people all over San Diego were discussing Dominelli, and “the word most people used was ‘genius.’ ”

By 1981 Hoover had left her husband and resigned from Bache to work full-time for J. David. She wasn’t one to toil in a basement for long, however, and soon the growing firm moved across the street into tony quarters made much tonier as Dominelli and Hoover poured a million dollars into improvements. They bought the adjoining building, too, and began remodeling it with all the restraint of an Arab prince. “There was a private bath with shower, adorned with gold-plated fixtures,” recounts Bauder. “In his office, Dominelli had a glass jar filled with $50,000 worth of rare coins. An enormous deck surrounded the second floor; the brass would regularly dine there on catered food. And there was an extremely expensive, state-of-the-art electronic security system, replete with electronic beams and motion detectors.”

Around the middle of 1981, J. David made some other critical moves. For one thing, Dominelli paid $40,000 to acquire an offshore bank in Montserrat, an island in the British West Indies, and on paper he moved his firm’s assets there. He also decided to abandon the regulated trade in U.S.-registered commodities in favor of investing in foreign currencies in the unregulated “interbank” market.

Among other consequences, the move to Montserrat shielded Dominelli’s investors from any IRS scrutiny. Furthermore, the investors soon began receiving very good news on their monthly statements: notice that their money was increasing by 3 to 5 percent every month. The statements didn’t contain much conventional trading information; there were no confirmations of when trades had been made or any other details about the transactions. When pressed for specifics, Dominelli would retort that if he disclosed them, others would be able to steal his investing secrets.

Intoxicated by the returns that J. David seemed to be earning, few investors pressed the point. Instead, the money flowing into Dominelli’s hands increased steadily throughout 1982 and most of 1983. An aggressive sales force dominated by handsome former military men and athletes and a far-flung corps of money-finders helped turn the income stream into a flood.

Hoover and Dominelli reinforced the image of fabulous success. They dripped money, breezing through stores and scooping up jewelry, furniture, Italian shoes, and more. Often they paid for their acquisitions with huge rolls of cash. Dominelli loved fast, expensive cars, and he bought dozens of them — Rolls-Royces, Jaguars, Ferraris, Maseratis, and the like, most of which he would drive briefly then give away or sell at huge discounts. He acquired airplanes too: a $600,000 Lear 24 jet, a leased Lear 35, a $5 million Grumman Gulfstream II. He and Nancy moved into a $2.2 million estate in Rancho Santa Fe, where they hosted lavish parties.

They by no means confined their extravagance to their own delectations; indeed, Hoover all but wriggled with the pleasure of giving away money. At her urging, “Almost $200,000 went to the San Diego Symphony,” Bauder records, “about $100,000 to the San Diego Opera, and about $100,000 to the La Jolla Museum of Contemporary Art.” J. David gave almost $60,000 to KPBS and a third of a million dollars to UCSD. Sports beneficiaries included various race car drivers, a triathlon team, and the San Diego Crew Classic. Hoover and Dominelli even dabbled in horseracing, starting an enterprise called Hoover Farms and in 1983 paying more than $650,000 for four race horses.

They also indulged in striking acts of personal generosity, sometimes waving their wands over ordinary folk, other times targeting key political figures. Hoover for years had made no secret of her desire to see San Diego’s “reactionary” political establishment overthrown by a new class of liberals, and with access to the millions flowing into J. David, she could begin to realize her vision. According to later government allegations, J. David began covertly funneling money to Roger Hedgecock, then an ambitious young politician who, though nominally a Republican, shared many of Hoover’s views. Hedgecock wanted to be mayor, and his campaign advisor, Thomas Shepard, eventually moved into J. David’s La Jolla offices. Hoover and Dominelli also poured money into the left-wing Newsline, which touted Hedgecock’s virtues in print almost every week. When Hedgecock won the mayor’s office in May of 1983, Dominelli threw a victory party for a thousand guests at the Hilton Hotel.

Hoover and Dominelli turned their new wealth into political clout in other ways — most conspicuously by hiring George Mitrovich, an ardent Democrat and public relations consultant who shared Hoover’s political vision for San Diego. (He moved into the J. David headquarters and began drawing a salary of more than $70,000 a year, driving some of J. David’s hot sports cars, and living rent-free in one of Dominelli’s numerous properties, an expensive house in Del Mar.)

Besides writing a column for Newsline, Mitrovich also chiseled away at public opinion by founding a forum called the City Club. Under its auspices, speakers such as Jimmy Carter, Gloria Steinem, and other internationally prominent liberals brought their insights to the hinterlands.

With that kind of exposure in political circles, it’s not surprising that a number of politicians and judges were among those who joined the J. David bandwagon. Less clear, even today, is to what extent the political connections helped to shield the high-flying investment firm from aggressive scrutiny by government regulators. Had any number of state and federal authorities launched a serious investigation, they would have found evidence that things were not right. J. David employees and even some casual observers had seen plenty of it. Dominelli never devoted the time or attention to the foreign currency markets that he would have needed to perform as fabulously as he claimed, for one thing. For another, Dominelli and Hoover’s egregious inattention to such standard business practices as recordkeeping sounded alarms that some people heard clearly.

Government attention finally did apply some serious heat to J. David’s operations in London, where Dominelli and his cohorts had established an office. By October of 1983, the pressure there had grown so intense that the J. David crew decided to move the London activities to Lugano, Switzerland. Back in La Jolla, checks began to bounce in the fall of 1983, and J. David stopped paying some suppliers. By December, a number of employees and favored investors began pulling their money out. The insiders’ run accelerated in January of 1984, and it wasn’t long before local newspapers began to report on it. Within days, the remaining slower-witted investors were all but pounding down the doors.

The saga hardly ended there. For months, Dominelli continued to deny any significant guilt, all the while concocting stories about how he would rectify everything. New investors had pledged $40 million or $50 million to help him relaunch his operations, he claimed at one point. At another, he actually raised a $125,000 “financing fee” intended to enable him to borrow $125 million from two shady characters, one of whom was Joe Bonnano, Jr., son of the famous New York mafioso. (Later the U.S. attorney would assert that Dominelli himself had been fleeced by this loan promise.)

In April, with a pack of reporters in pursuit, Dominelli fled to Montserrat. Two weeks later, however, he was kicked off the island by its government, and after a botched attempt to escape to neighboring Antigua, he finally was arrested in Miami.

Once home, he continued to obfuscate but eventually admitted what some had long suspected: that he had been running a Ponzi scheme. The 50 to 60 percent annual profits were a fiction. Dominelli in reality had traded very little with the money entrusted to him. Instead he’d turned around and spent it.

In October of 1984, while in jail, Dominelli suffered a stroke. Nonetheless, he was declared competent to stand trial, and in March of 1985 he confessed to fraud as part of a plea-bargain agreement. Sentenced to 20 years’ imprisonment, he served just under 11 and was released this past January.

It took longer for justice to catch up with Nancy Hoover — and then it did so much more briefly. For her role in the affair, Hoover was sentenced to ten years in prison; but in exchange for cooperating with the government in connection with another J. David case, she served only 30 months. She then went home to the wealthy Montecito businessman whom she married shortly after Jerry Dominelli went to jail.

Roger Hedgecock, now a successful talk-show host, never spent any time in jail as a result of his illegal receipt of the J. David funds, though he was tried for conspiracy and perjury. Although the first jury deadlocked, the second convicted him, and he was forced to resign from the mayor’s post. (The state supreme court eventually overturned 12 perjury convictions, but the felony conspiracy conviction stood.)

The 1500 investors who poured more than $90 million into J. David’s coffers — everyone from comedian Joey Bishop to Olympic long-distance runner Frank Shorter to Las Vegas casino owner Allen Glick — suffered a fair amount of embarrassment. But by the time the bankruptcy trustees completed their work and the deep-pocket lawsuits against law firms and banks all were settled, Dominelli’s victims recouped about 82 cents on every dollar they had lost.

— Jeannette De Wyze

THE $100 MILLION RESORT WITH CRIMINAL CLIENTELE?

Ten-Year Dogfight between La Costa and Penthouse

Glossy. Self-satisfied. Tidy. Staid. Such words spring to mind roaming the grounds of La Costa today. In the spa at the Carlsbad resort, matrons give themselves over to total body exfoliation, natural spirulina wraps, “Moor Mud” therapy, and massage. Their husbands huddle in the armada of golf carts before venturing onto one of the two famous courses. The only blatant sin on the premises nowadays is profligacy. (Rooms cost between $225 and $2100 per night; one hour with the Moor Mud is $95 — plus an 18 percent service charge.) You have to stifle a yawn, slap yourself, and stretch the imagination to conjure what the atmosphere here must have been back in March of 1975.

That was the month the infamous Penthouse article about La Costa appeared under the subheadline “The Hundred-Million-Dollar Resort with Criminal Clientele.” In the illustration, pistols pointed to inflammatory quotes pulled from the story, such as one from an unnamed “California policeman,” which said, “These people are really powerful.... They run their own show. Someone could get killed out there and you would never know it.”

Not that the article documented any murders on the well-groomed fairways or offered much documentation for many of the charges with which the article bristled. Providing most of the emotional wallop instead were the ful-minations about La Costa’s role as a “power center” oozing crime and corruption.

A few basic allegations underpinned the ominous, if confusing, implications. For one thing, the article pointed out that La Costa had been built (in the early 1960s) with more than $50 million in loans from the scandal-ridden Teamsters Central States Pension Fund. (This was hardly a scoop, having been reported in other publications.)

The article’s authors (two freelancers named Lowell Bergman and Jeff Gerth) also alleged that in addition to the prominent politicos and celebrities who gave Rancho La Costa “a veneer of respectability” (everyone from New York Senator Jacob Javits to Frank Sinatra to Sandy Koufax to Henry Ford), numerous “mobsters” and “underworld heavyweights” also frequented the premises. Among those mentioned were Meyer Lansky, “the dark eminence of organized crime and the financial brain of Lucky Luciano’s original organization”; Anthony Spilotro, “a notorious thug from Las Vegas”; John (Jake the Barber) Factor, “a notorious international confidence man and stock swindler”; and Louis “the Tailor” Rosanova, “a Chicago mobster now headquartered in Georgia.”

Moe Dalitz during trial. Penthouse stated that at La Costa’s helm was “the Moe Dalitz mob.”

Moe Dalitz during trial. Penthouse stated that at La Costa’s helm was “the Moe Dalitz mob.”

The Penthouse story also claimed that by the early 1960s, “organized crime had a working relationship with San Diego’s power elite” — namely banker C. Arnholt Smith and businessman John Alessio. Finally, the authors stated that at La Costa’s helm was what the writers referred to as “the Moe Dalitz mob.” Dalitz, they wrote, was a “senior mentor among the criminal aristocracy” and a “prime mover in transforming organized crime into a financial powerhouse” who had persuaded Jimmy Hoffa to finance various Las Vegas casinos with the Teamsters’ pension fund. His “mob,” according to the investigative reporters, included Allard Roen, the former executive director of the Desert Inn, who had had to plead guilty “to a felony rap in what turned out to be one of the largest stock frauds on record,” and two television executives named Merv Adelson and Irwin Molasky. (They had helped found Lorimar Productions and launched such shows as The Waltons and Dallas.)

The reaction from the four co-owners of La Costa was swift. First they demanded that Penthouse retract its charges in print. Then in May (of 1975) they filed a legal action seeking the largest libel damage award ever requested up to that time — $630 million.

The battle that followed was both protracted and titanic. La Costa’s owners hired litiga-tional superstar Louis Nizer to head their legal team, while Penthouse publisher Bob Guccione chose a flamboyant New York attorney named Roy Grutman as the magazine’s principal defender. One of the most significant pretrial skirmishes revolved around the question of whether Dalitz, Roen, Adelson, and Molasky were public figures (a critical issue, since the standards for proving libel against high-profile individuals are much tougher than those for nonpublic figures). A judge eventually ruled that Dalitz and Roen were public figures and could not prove actual malice. But a jury would have to decide the “public” status of Adelson and Molasky, the court said, and Penthouse would have to prove the truth of the article as it related to the two TV producers.

Penthouse and Guccione received a more crippling blow just as their case was ready to go to trial, when authors Bergman and Gerth announced they were, abandoning the magazine’s defense team. Nizer had negotiated a settlement with the journalists, part of which involved a written expression of their “regret” for the article. Although Penthouse's legal team managed to get Nizer and a co-counsel kicked off the case for this maneuver, an appellate court reinstated them, and the trial finally got underway.

For its star witness, then. Penthouse had to rely on a character mentioned only briefly in the original article: Aladena “Jimmy the Weasel” Fratianno. Described by Bergman and Gerth as “an infamous hit man,” Fratianno had filed his own libel suit against Penthouse, but according to Michael Zuckerman, the author of a 1987 book about Fratianno called Vengeance Is Mine, mobster bosses had ordered Fratianno to file that action. Later, after Fratianno became a government informant, his first private visitor at San Diego’s Metropolitan Correctional Center would be Guccione, “who brought Jimmy a pile of Penthouse back issues,” Zuckerman writes. Guccione also took the opportunity to offer Fratianno $250 an hour for any help he could provide with the libel defense.

So it was that Fratianno was scheduled to testify in the Compton court where the trial finally unfolded in late 1981 and the early months of 1982. Roughly 100 other witnesses also took the stand, and many of them competed with Fratianno in their level of fame or flashiness or both. Testifying to the good reputation of the plaintiffs were such figures as actor Mike Conners, pitcher Don Drysdale, and football coach Sid Gillman. Penthouse, on the other hand, called everyone from ex-convicts to investigative journalists to support its allegations of a connection between La Costa and the underworld. When Fratianno’s turn finally came, the judge rejected Penthouse's argument that Jimmy the Weasel should be considered an “expert witness” on organized crime. In fact, the judge refused to let Fratianno say much of anything — to Fratianno’s surprise and angry dismay. In one of the more startling turns taken by the case. Penthouse wound up asking the California Supreme Court to declare a mistrial on the grounds that the judge had personal links to both Fratianno and other organized crime figures that he had failed to disclose (and that the defense lawyers had only learned about at the eleventh hour).

Rather than act, the high court waited for the jury to sift through what it had heard: some 5 million words, transcripts of which later filled 96 volumes. After deliberating for three weeks, a majority of the jurors proclaimed that Penthouse had not libeled Adelson, Molasky, La Costa, or any of the resort’s subsidiaries. Guccione was jubilant — but not for long. Less than two months after that decision, the controversial judge threw out the jury verdict and granted La Costa a new trial.

That never came to pass, although it threatened to do so for another three and a half years. The presiding judge of the state superior court finally stripped the trial judge of any jurisdiction over the retrial, and the case took another surprising turn in September of 1985, when the California Supreme Court upheld an appellate court ruling that Dalitz and Roen were not, in fact, public figures. That meant the entire lawsuit could start afresh, without any of the four owners having to prove malice and reckless disregard for the truth.

But after more than ten years and with well over $14 million having been spent on legal fees, all the fight had dribbled out of both sides. On December 27, 1985, Penthouse and the La Costa principals filed a letter of settlement that took mealy-mouthedness to new comic heights. “During the course of the trial and subsequent thereto, we have learned things about each other which were not known to us before the litigation,” the document stated. Penthouse... did not mean to imply nor did it intend for its readers to believe that Messrs. Adelson and Molasky are or were members of organized crime, or criminals. In addition, Penthouse acknowledges that all of the individual plaintiffs, including Messrs. Roen and Dalitz, have been extremely active in commendable, civic, and philanthropic activities which have earned them recognition from many estimable people.”

The plaintiffs, in turn, acknowledged that they had “learned things about the defendants which were not known to them before they initiated the lawsuit. They have learned of many personal and professional awards and distinctions that have been conferred upon Penthouse and its publisher, Robert C. Guccione.” One sentence sounded sincere. “Continued litigation will only further torture and cause more expense to all parties.”

In its original would-be expose, Penthouse had noted, “Rumors that La Costa was to be sold to Japanese interests for $200 million have circulated regularly in the last few years.” Those rumors finally reached fulfillment in 1987, when Roen, Adelson, and Molasky unloaded the resort for $250 million to a large Osaka company called Sports Shinko. (Dalitz had sold out his ownership share in 1981.)

Reporting on the sale, the Los Angeles Times alluded to the persistent allegations about organized crime ties to La Costa. But the newspaper noted that despite “innumerable investigations...launched by the FBI, the state, the local authorities” and law enforcement officials who at one time “boasted of having undercover officers stationed in the resort’s locker room, as well as informants in the rubdown room and at the hotel switchboard...ultimately...none of the investigations resulted in any charges being filed against the resort’s owners.”

— Jeannette De Wyze

FALLBROOK’S MOST HATEFUL AVOCADO

Godfather of American Skinheads

“I have never advocated violence. I am not a military-oriented person. If I were to be involved in a conspiracy, it would surely end up like a Woody Allen movie.”

Metzger: the ex-Grand Dragon of the KKK has now ditched his toupee

Metzger: the ex-Grand Dragon of the KKK has now ditched his toupee

An odd scenario comes to mind, if you know anything about Tom Metzger, San Diego’s most hateful avocado from Fallbrook. Picture him in the back row of the Ken at a showing of, say, Stardust Memories, warbling, “Woody, oh, Woody.” And picture him as a revplutionary leader declaring, like the charismatic guerrilla that he is — his persona based on the power-mad moron in Bananas — “From this day forward, underwear will be worn on the outside only!”

The ex-Grand Dragon of the KKK has now ditched his toupee and has shaved what remains from his follicles in sympathy with his skinhead followers. This is a relief to those of us who had to endure that roadkill, which never quite disguised his resemblance to Mussolini, Aleister Crowley, and Mr. Clean.

Tom Metzger’s qualifications as social reformer, ethnic cleanser, or any sort of political leader can be summed up simply. He was a television repairman.

Other items on Metzger’s resume include his stint as office manager of Fallbrook’s headquarters for George Wallace’s presidential bid in 1968. “[A]t the time,” said Metzger, “I didn’t consider myself a racist. I was just upset with the government, upset with what a lot of black people were doing, but I had not evolved into what I am today.”

Cut to seven years later, after a flirtation with the John Birch Society and stint as a “tax rebellion activist,” Metzger joins the Ku Klux Klan, where his abilities are recognized and he quickly becomes grand dragon. He was still a Catholic at the time, he says, according to a Union-Tribune story dated November of last year. But then, he complains, “they put that Cesar Chavez stuff all over the church.”

When the KKK no longer amused Metzger, he formed his own organization, the White Aryan Resistance, WAR, to spread his racist message.

While it is dangerous to dismiss moral pygmies like Metzger as clowns, the temptation is almost overwhelming. Certainly he is not harmless. A young follower named Greg Withrow dropped out of Metzger’s organization after eight years. His former playmates corrected his error in judgment by cutting his throat, breaking several bones (jaw, nose, wrists), and then nailing him to a board.

In 1980 Metzger got the Democratic nomination but ran unsuccessfully for Congress, soundly trounced by Republican incumbent Clair Burgener. Metzger was accused of campaign law violations.

In 1984 leaflets designed to look like $100 bills turned up at high schools in San Diego County, including Point Loma and Clairemont. The leaflets contained racist propaganda challenging historical accounts of the Holocaust, for example. The pamphlets were distributed by the White Student Union, which shared a post office box with the White American Political Association and Tom Metzger. “Most of our students took the position of considering the source and laughed at [the pamphlets],” Point Loma principal James Gauntlett was quoted as saying.

That same year Metzger launched his public-access cable show, Race and Reason. Morris Casuto, executive director of the Anti-Defamation League of B’nai B’rith, commented on this television milestone, “You could put all the interest and information of that show on the head of a pin and still have room for thousands of angels.”

In 1988 undercover police officer Douglas K. Seymour sued the City of San Diego and Police Chief Bill Kolender among others for hanging him out to dry when he was recruited by police to infiltrate the Klan and then failed to act on information he was contracted to provide. This resulted, according to Seymour, in a mock trial held in Tom Metzger’s basement involving Klan members holding guns to Seymour’s head and playing Russian roulette. Metzger denied this.

Both Tom and his son John were permanently deported from Canada in 1992, charged with entering the country illegally to attend a white supremacist rally and “likely to commit an indictable offense,” which violates Canadian hate-crime laws. John Metzger has been a staple of television talk shows for years. His “Troy Donahue meets Dennis the Menace” master-race looks have inspired millions of viewers to want to kick his ass.

In December of 1994, according to an article in the San Francisco Examiner, Metzger was accused of video piracy when he sold, via mail order, copies of the Australian film Romper Stomper, the skinhead hate epic. Metzger defended himself by saying, “We have never handled more than a dozen of them.”

Surprisingly, considering his resume, Tom Metzger has served only six weeks of a six-month jail sentence in ’92 for a cross-burning incident. However, Metzger and his son were found liable for the death of an Ethiopian immigrant who was beaten by Metzger-inspired skinheads. Metzger had to sell his home and possessions to begin paying the $12.5 million settlement awarded the victim’s family.

The last we’ve heard from Metzger was his recent comment on the O.J. Simpson trial. Metzger imparted his I-told-you-so wisdom with relish, saying, “It’s bad genetics. Those types of marriages are just not meant to be.”

— John Brizzolara

METH CAPITAL OF THE WORLD

Less Complex Than a Chocolate Chip Cookie Recipe

San Diego seems to relish its status as a conservative burg, bastion of ye elusive Family Values, definitely the place to hold the Republican National Convention. Yet San Diego has had another more dubious distinction, one that Mayor Golding probably hasn’t trumpeted: the international rep as the Meth Capital of the World. Say it ain’t so, Susan.

“During the late 1980s, the lab guys found out how easy it was to convert ephedrine."

“During the late 1980s, the lab guys found out how easy it was to convert ephedrine."

Sadly, it apparently is so, although “as far as laboratories go, locals involved with the manufacture, it’s not the focal point it used to be,” says SDPD Lt. Adolfo Gonzalez. “Over the last three to four years, it seems that organized drug cartels run by Mexican nationals have taken over the actual manufacturing to a great extent. The methamphetamine still moves through here from Mexico, and once in a while we’ll stumble across a lab out in East County or hear about one after the fact —- after it’s blown up.”

Gonzalez emphasizes that “I only deal with the city. We have gone a whole year without finding any new labs. Interestingly, our records indicate that Clairemont was San Diego’s methamphetamine lab capital at one point. Why there? I really don’t know.”

Heidi Landgraf, eight-year veteran special agent with the local office of the U.S. Drug Enforcement Administration, says, “California Department of Justice statistics show both deaths related to methamphetamine use and lab seizures had been increasing dramatically, but over the past few months there’s been a sharp decline.”

Landgraf was featured recently on television and in magazines for her role in an international drug-money-laundering sting operation. A movie reportedly in the works will star Michelle Pfeiffer as Landgraf.

According to Landgraf, “The decline in numbers could simply indicate that it’s gone more underground, but it’s true that meth production these days is totally dominated by Mexican traffickers—they’ve driven out the Colombians and completely taken over in this area.”

She explains, “There are various different recipes for manufacturing meth, but the two basic methods are first, a reduction process using ephedrine, and second, using other chemicals such as Freon, trichloroethylene [a solvent used for floor wax and in dry cleaning], and toluene [used for making dyes and explosives], or other chemicals.

“During the late 1980s, the lab guys found out how easy it was to convert ephedrine and began converting to the reduction method of production. When we began finding ephedrine in bulk quantities, it was regulated in the U.S., with the aim of controlling domestic meth production. Unfortunately, California had a loophole. Ephedrine was regulated, but not pseudo-ephedrine, {he type used in antihistamines and allergy and cold pills.... In 1994 the [law] was amended again after the DEA found companies exporting huge quantities of Sudafed tablets.

“In Mexico they don’t regulate pseudo-ephedrine or ephedrine production, so it was easy for them to take over on the production end and use the [drug] routes already in place to ship the finished product through San Diego, which is still the meth capital as far as distribution goes.

“After the ’94 regulations, the DEA expected things to quiet down, but we had a benchmark case where an airplane bound from Switzerland to Mexico with no scheduled stops had to touch down in Dallas, and 3.4 metric tons of ephedrine was found onboard. Now, there’s about a 1:1 ratio with ephedrine to meth, so this was a huge seizure. We estimate that about 150 to 200 metric tons of ephedrine are exported to Mexico every year.”

Of U.S. producers, “San Diego still ranks very high up there,” says Landgraf. “Most of the U.S. labs are still located in California, with a fair percentage in Texas as well. The Southwest border is credited with about 70 percent of the U.S. trade. The usual route is through San Diego to L.A., from where it’s dispersed throughout the rest of the country.”

Landgraf is “unable to confirm or deny” Lt. Gonzalez’s statement that Clairemont had been the hot spot for local labs but does say “North and East San Diego Counties are obvious good locations, because they contain so many rural-type areas. We’ve had avocado growers and farmers calling to report stumbling over lab sites. That’s not a prerequisite though. You can manufacture meth in a trailer, in your bathtub in an apartment building.”

Profits are enormous. A $500 investment in ephedrine yields approximately a pound of meth, which sells for $ 10,000 to $ 12,000 per pound — statistically, mostly to white males.

“Yes, the average user is still a white male, although over the past year, Latin American usage statistics have roughly doubled. We’re seeing an increase in female users as well. In treatment centers, meth has now exceeded alcohol as the substance people are checking in for help with.”

Says Landgraf, “[The ingredients] are very easy to come by, and as far as difficulty, it’s probably less complex than the average chocolate chip cookie recipe.... It’s crazy! People are using while they’re cooking, they’ve been Up for three days, they’re accidents waiting to happen. A couple of people died recently in an East County explosion. You have people with no knowledge [handling the] chemicals. The explosions are no surprise.”

She emphasizes also that “these chemicals are extremely corrosive to the land, destructive to the environment, and when you’ve got a tweaker or a profiteer, they obviously don’t care.

“The resources go to where the problems are,” says Landgraf. “[California’s DEA] has an entire division of lab-certified experts in dismantling meth laboratories.... Our agents recently attended a huge conference in D.C. on methamphetamine, to bring the rest of the country up to speed — no pun intended. The San Diego agents train other agents throughout California, then pass the info along to local law enforcement.

“I think we really need to get messages out to young people that this really isn’t cool. Some kids start so young. Meth is seen as a party, recreational drug, and it virtually always turns into a whole screwed-up life. It’s extremely addictive. Kids start out doing lines, and they end up injecting it. We’re seeing a lot more IV meth use lately. It causes an increase in violence that you would not believe. Lack of sleep, and the way the drug itself interacts with the brain, suppressing the natural production of brain chemicals, induces paranoia, and you’ve got young people carrying weapons, feeling as though someone’s after them. It’s a tragedy. How many old meth users do you see? How many with even a semblance of good health? We need to work with the community, each of us, to let kids know how destructive this is, so hopefully they won’t take the first step down that road. Believe me, it’s not going anywhere you want to be.”

— Rose Dawn Scott

MR. SAN DIEGO

C. Arnholt Smith Finishes His Life in Murietta

August 6, 1968, must have been one of the happier days in the long life of C. Arnholt Smith. It was the second day of that year’s Republican national convention, held in Miami. At a delegates’ reception, Smith and his wife were ushered to the front of the line where Pat and Dick Nixon were to greet some 5000 well-wishers. The San Diego business tycoon got hearty handshakes from the First-Couple-to-Be, the San Diego Union gushed the next day, while Mrs. Smith received kisses. “What did the Smiths and the Nixons talk about in the receiving line?” the newspaper asked. “They were telling us...that we would be their first guests in the White House,” the paper quoted Helen Smith as replying.

Smith: owned National Steel, U.S. National Bank, the Padres, Yellow Cab, Westgate Tuna, developed Fashion Valley, Shelter Island

Smith: owned National Steel, U.S. National Bank, the Padres, Yellow Cab, Westgate Tuna, developed Fashion Valley, Shelter Island

To help ensure Nixon’s victory, C. Arnholt Smith gave $250,000 of his own money to the campaign and reportedly raised an additional $750,000. On election night, he attended the private party in the candidate’s suite at the Waldorf Towers in New York. Later, Amie and Helen did visit the White House on Pennsylvania Avenue and Nixon’s “Western White House” in San Clemente. But as he returned from those visits, Smith might have indulged in that most self-satisfied of reflections: he wouldn’t want to change places with the president of the United States.

San Diego wasn’t a very big pond in 1968, but it was a pristine and paradisiacal one. And no bigger fish, before or since, has ever cruised its waters than C. Arnholt Smith. He loomed over the city’s other business leaders. No one pulled more political strings or built moreimpressive landmarks.

Smith seemed the archetypal self-made man. His working-class parents had moved here from Walla Walla, Washington, in 1907, when Smith was about eight. Young Arnie went to Florence Grammar School and attended San Diego High for a while but dropped out before graduating and went to work as a roustabout for Heller’s, the big grocery store downtown. After a few years, he got a job as a clerk at the Merchants National Bank and advanced there, becoming teller, then chief clerk. When the Bank of Italy acquired Merchants and two other local banks, Smith oversaw the consolidation. Eventually his work for the organization (which would become the Bank of America) exposed him to the operations of little banks all over the Southwest, and Smith began to think that he could do at least as well as most of them were doing, were he to acquire his own bank.

So it was that in 1933, with about $50,000 in borrowed money, he took control of San Diego’s U.S. National Bank, a modest one-branch operation. Despite the Depression, USNB thrived. Some of the elements upon which Smith based his success were classic ones. He worked long hours, hustled business from the wide network of contacts he had made throughout his 20s, and was innovative. Sometimes opportunities fell into his lap. He entered the steel-fabricating business, for instance, because USNB’s previous owner had made some bad loans to National Iron Works. After foreclosing on the company, Smith tried to salvage its business. The advent of World War II abetted him, bringing orders to repair damaged Navy ships. After the war, Smith renamed the enterprise the National Steel and Shipbuilding Company and steered it into building tuna boats, which led him to start acquiring tuna canneries. Other twists of fate shot him off in dozens of directions, and as the ’50s gave way to the ’60s, all Smith’s trajectories seemed golden.

By 1960, the year the Grant Club named him the city’s tenth “Mr. San Diego,” Smith’s bank boasted 21 branches in three counties, and he’d announced plans to build one of the first new skyscrapers downtown to house the headquarters. He owned the San Diego Padres and had erected the city’s first major stadium, Westgate Park (which, in partnership with Ernie Hahn, he later developed into Fashion Valley). He also had been the moving force behind the creation of Shelter Island, where he’d built his swanky Kona Kai Club. Nixon, then vice president, sent a congratulatory message to the Mr. San Diego luncheon, as did close chum Jim Copley, publisher of the San Diego Union and Tribune.

Throughout the 1960s USNB expanded on a staggering scale, with corresponding growth in the scope of operations of Westgate-Califomia, the publicly held conglomerate Smith controlled. In 1962, for example, he bought the Yellow Cab Co., and within a decade it boasted “a virtual stranglehold on taxi service in Los Angeles, San Francisco, Oakland, and other California cities,” according to Forbes magazine. (Yellow had “the exclusive right to pick up passengers at three of the state’s largest airports.”) Smith branched into airline ownership. And he continued to indulge his penchant for creating landmarks, erecting the 25-story USNB headquarters building at Broadway and Second Avenue, the 9-story Executive Hotel, and the $14 million, 20-story Westgate Plaza Hotel (furnished by Smith’s wife to the tune of nearly $2 million).

By 1969, when he was featured in a frontpage story in the Wall Street Journal, Smith had “accumulated more than the usual trappings of a personal fortune estimated at $20 million,” the Journal reported. It elaborated, “Besides four homes and four cars, he has his ‘own color, a shade of light tan his associates call ‘Smith beige' It shows up in everything from his office stationery to his suits.”

That Wall Street Journal article would be the first significant public warning that something within Smith’s financial kingdom was rotten. Under the headline “Self-Dealing Tycoon — How a Californian Uses Publicly Owned Firms to Aid Private Ventures,” it presented evidence that Smith “and certain relatives and associates” in essence were looting the publicly owned Westgate-California and U.S. National Bank.

Here’s one example as described by the Journal article: Smith in 1956 had invested $25,000 to start a small Arizona insurance firm that he later transferred to a subsidiary owned by him and some family members. In 1963 this subsidiary sold the insurance company for $610,000 to another subsidiary owned by Smith’s brother John. Just months later, John’s firm sold the company to the Westgate-California Corporation for $1,260,000. Arnholt told the Journal's reporter that “there must have been something” to account for the jump in price, but he didn’t elaborate upon what that might have been.

The article recounted several other shady-sounding deals that Smith also failed to explain in print. But at the annual meeting of the Westgate-California’s Corporation’s stockholders — which had been scheduled for the day after the Journal article ran — Smith was urbane and confident. The price of Westgate’s stock had declined, he suggested, not because corporate funds were being used to pay inflated prices for properties held by him and other corporate insiders, but because “not enough people are aware of the [stock’s] intrinsic value” and “there’s not enough retailing of [it].”

More than four years would pass before a government agency would charge Smith and his associates with fraud; but in the interval, storm clouds gathered. One of the biggest and blackest appeared in the early months of 1971, with the appearance of West-gate-California’s 1970 financial report. Smith had fired his previous auditors and hired the national accounting firm of Haskins & Sells. But the new auditors’ final report contained 17 pages of footnotes listing objections to profits and figures provided to them by Westgate-California. Furthermore, the auditors forced Westgate-California officials to rescind $52.6 million in transactions because they were “not in the best interests of Westgate.”

Smith fired Haskins & Sells, but serious damage had already been done. Later in 1971, both the Federal Bureau of Investigation and the Securities and Exchange Commission quietly began probing into Smith’s affairs. In early 1972, Smith fired Touche, Ross & Co., successors to Haskins & Sells. Once again, “[W]e were unhappy with the type of footnotes they put together,” Smith was quoted as saying. (The Westgate-California Corp. reported a net loss of $2,621,000 for 1971.) Smith faced worse publicity in March of 1972, when a Life magazine article titled “Tampering with Justice in San Diego” accused some of Smith’s government connections with shielding him and two friends (John Alessio and Frank Curran) from prosecution for a number of crimes.

Lightning finally struck in June of 1973, when the SEC filed a 31-page civil lawsuit against Smith, asking that the industrialist be barred from ever serving as an officer of any public company. Although the details of the suit were eyecrossing in their complexity, the central thrust was that Smith and his lieutenants had engaged in a massive fraud, manipulating the assets of Westgate-California and the U.S. National Bank to enrich themselves.

Scorching charges from other sectors soon followed. The news emerged that the U.S. Comptroller of the Currency had issued a cease and desist order forcing Smith to give up his bank posts and disengage from USNB’s operations. In October of 1973, the U.S. comptroller declared the bank to be insolvent. (Crocker National Bank took over branch operations, while the Federal Deposit Insurance Corporation got $420 million in loans that USNB had made to companies owned or controlled by Smith.) A blizzard of civil suits against Smith and/or his holdings ensued. And then in November of 1973, the Internal Revenue Service filed a $22.8 million civil tax assessment against Smith, the largest income tax claim (up to that time) ever made against an individual for a single year.

The thick batch of newspaper clips on C. Arnholt Smith filed in the central library’s California Room are messy, densely written, decaying — an apt record of a disheveled, decadent period. The inky headlines still shout, “USNB stockholders file new suit against Smith,” “Smith enters plea in funds case,” “FDIC sues directors in USNB failure,” “Smith faces new counts of theft, tax evasion,” on and on through a couple of inches of tanned and crumbling newsprint. Considering the scope of Smith’s activities and the intricacy of his financial machinations, it’s not surprising that all the proceedings against him dragged on as long as they did. More striking is how neatly Smith dodged all the efforts to punish him.

Five months after the SEC filed its suit, Smith settled it, withdrawing from all of West-gate’s operations. A year and a half later, he stunned San Diegans by pleading no contest to various criminal charges pending against him: conspiracy, misapplication of bank funds, filing false statements, charging false entries in USNB’s books. Although the prosecutor all but begged the judge to put Smith in jail, Smith groveled, citing his health and age. He got probation and a $30,000 fine to be paid off at the rate of $100 a month. Smith’s old political enemy, then-district attorney Ed Miller, launched an investigation that resulted in new criminal indictments. In 1979 a jury found Smith guilty of grand theft, signing false tax returns, and evading state income taxes for 1971 and 1973. But the judge this time allowed Smith to remain free pending his appeal of the convictions. Finally, in 1984, at 85, he spent fewer than eight months in custody. During most of that time, he worked as a gardener at a county minimum-security work furlough center. When released, he reportedly looked fit and tanned.

Smith was evicted from his Rancho Santa Fe mansion in 1993 and lived in Murietta Hot Springs with his daughter Carol Smith Shannon until shortly before his death this past June 8 at the age of 97.

—Jeannette De Wyze

I FEEL SLIGHTLY SLIGHTED

The Yellow Cab Debacle

Many charges of bribery and corruption have bubbled out of this city over the past few decades, but the prize for the largest number of public officials tainted by indictments in a single sweep goes to the Yellow Cab debacle.

The date was October 9, 1970. Under a huge headline on the front page of the San Diego Union, readers learned that the city’s mayor, Frank Curran; four city council members; and three former members who had since gone on to higher local offices were facing felony charges.

Mayor Curran: remained free and continued to conduct official business until the first trials began

Mayor Curran: remained free and continued to conduct official business until the first trials began

The case against them derived from an action the group had taken three years earlier, when the council had voted unanimously to allow the Yellow Cab Company to raise its rates by 22 percent. (In 1967, Yellow owned 84 percent of the cabs in San Diego.) The council members had taken the action despite the fact that a consultant they had hired strongly urged them to deny the fare hike. The consultant had pointed out that higher fares would give Yellow Cab an approximately 178 percent return on its investment and cost cab users $1,240,000 a year.

The council’s action had quickly disappeared from the newspapers, but a year later the Internal Revenue Service had begun a quiet examination of the cab company’s books, paying particular attention to certain contributions and gifts that Yellow had deducted as business expenses. The IRS later gave some of the information it gathered to the San Diego district attorney’s office, and in 1970 a county grand jury probe ensued. Mayor Curran was not among those subpoenaed to testify before it “I feel slightly slighted,” he quipped to the Union at one point, hastening to add that he did not expect to be involved in the probe. The very next afternoon, shortly after a meeting between the city council and the port commission, Curran was arrested and escorted to the jail two blocks away, where he was booked and released.

Along with his fellow defendants, the mayor remained free and continued to conduct official business until the first trials began, two months after the indictments were announced. In the proceedings against Curran, the star witness was Charles A. Pratt, the former Yellow Cab president. (He’d been forced to resign after news of the indictments broke.) In exchange for Pratt’s testimony, the government had granted him immunity, and on the stand he recounted how Yellow gave the mayor several checks totaling more than $3000 in the months just before and after the crucial vote. Pratt testified that he had understood that in return for the money, Curran would vote in favor of Yellow’s request and curtail remarks from the consultant.

Curran’s attorney countered that Pratt had given money to lots of candidates and that Curran had not believed the contributions were a bribe. The defense attorney also called ten witnesses who testified to the mayor’s good character, and he told the jury that “evidence of good character is in itself enough to raise a reasonable doubt about Mr. Curran’s guilt or innocence.” Notably missing from the stand was the IRS agent whom the prosecution had scheduled to take the stand at the end of the trial; at the last moment, the federal agency’s Washington headquarters had refused to allow him to participate.

The jurors deliberated for eight and a half hours, then announced they had found Curran innocent of both the bribery and conspiracy charges against him. Acquittals of state Assembly-man Tom Horn, City Councilman Mike Schaefer, and County Supervisor Harry Scheidle also followed, and district attorney Ed Miller wound up dismissing the charges against Helen Cobb, Floyd Morrow, and Jack Walsh. The one remaining city councilman, Allen Hitch, pleaded no contest to a misdemeanor campaign disclosure charge and was fined $750.

Curran hoped for further exoneration from the city’s voters, but when he ran for a third term as mayor, he wound up fourth in the primary. (Pete Wilson swept into the mayor’s office that year.) Curran had settled into a job running the Central City Association business group when one of the final postscripts to the Yellow Cab scandal appeared. In the same March 1972 article in which it accused the Justice Department of shielding powerful local financier C. Amholt Smith from legal scrutiny, Life magazine offered an explanation for why the IRS agent had been prevented from taking the stand in Curran’s case. “Curran was too well connected,” Life quoted “a former high IRS official” as saying.

—Jeannette De Wyze

THE PRINCE OF PROMOTERS

Rise and Fall of the Fletcher Family

It begins with a boy stepping off a train. He is not yet the Colonel, the Prince of Promoters, or Senator, just Ed Fletcher from Massachusetts. He’s 15 years old, nearly 16. His lips are a little dry around the edges, and his cheeks are smooth and brown. He’s handsome now, and he’ll be handsome until the day he dies. He isn’t rich yet; but when he steps off the train in San Diego, he puts $5 of his $6.10 in a savings account, cleans the cellar of the bank president, and takes a job with Nason and Co., produce wholesalers. He travels between farms and the city on a bicycle, sometimes riding as far as Riverside.

Fletcher: suburbs begin to dangle from his name like medals on a chest: Mt. Helix, Fletcher Hills, Grossmont, Rancho Santa Fe, Del Mar, Solana Beach, Leucadia, Encinitas, and Cardiff

Fletcher: suburbs begin to dangle from his name like medals on a chest: Mt. Helix, Fletcher Hills, Grossmont, Rancho Santa Fe, Del Mar, Solana Beach, Leucadia, Encinitas, and Cardiff

The radio does not exist. It is the year of the real estate crash in San Diego, the year the population rises to 35,000 and falls to 16,000. The Hotel del Coronado opens, Wyatt Earp lives on Third Avenue, John Spreckels sails into the bay for the first time on his yacht Lurline, and Ed Fletcher makes $5 a week on his bicycle. He vows to save 5 percent of his wages, $1 a month, $12 a year, enough to buy a horse by 1891, the year he and his friend George Hazzard are photographed, unsmiling and determined, on the seat of a used buggy. At night the streets of San Diego are still unpaved, lit by electricity and stars, muddy when the rains come, dusty when they don’t.

He starts his own produce business and goes all the way back to Massachusetts for a judge’s daughter named Mary C. Batchelder. They marry, board the train back to San Diego, and rent a new, five-room house in which his fair-skinned wife will begin to bear him their ten children: seven boys, three girls. The oldest, naturally, will be named for his father. None of the babies will die in childbirth, not even the tenth, premature Virginia, displayed by her father in a cigar box.

Meanwhile, Ed Fletcher begins to invest. He sells the produce company, buys Grossmont, organizes the Southcoast Land Company, builds the first highway to the Imperial Valley, and acquires (with the help of a business partner) the San Diego Flume Company, which provides water to El Cajon, Lemon Grove, and La Mesa.

To see the Fletchers on their Ash Street lawn in 1915 is to see that they’re all prosperous now, dressed for the photograph in starched cotton sailor suits, tweed waistcoats, and gleaming, high-button shoes. They have nicknames like Wig, Dutch, and Ferd. They ride ostriches, play tennis, raise guinea pigs.

The patriarch, the Colonel, is 43, dry-lipped, and tan. He’s been in the real estate business since 1902, and suburbs begin to dangle from his name like medals on a chest: Mt. Helix, Fletcher Hills, Grossmont, Rancho Santa Fe, Del Mar, Solana Beach, Leucadia, Encinitas, and Cardiff— all of them will trace their houses and their water pipes to him. He is the Prince of Promoters, future state senator, head of the Ed Fletcher Company, his eyes tastefully wrinkled, his hands covering the hands of young Mary Louise, who leans back into his chest as into an armchair. The seven boys will ride on wooden surfboards; take prizes in water polo and the breaststroke; join fraternities; found a law firm, bank, and insurance company, pose for color pictures at the San Diego Yacht Club; and become millionaires. The three girls will, as the newspapers put it, “marry well.”

“You boys are all impulsive, somewhat quicktempered, and sometimes shoot off only to regret it soon afterward,” Fletcher writes in his memoir, adding, “(You take after your father.)” He’s nearly 80 when he writes this, and when he says “you boys,” he’s talking to a cattle rancher, the founder and president of the Home Federal Loan Association, two lawyers, the vice president of the Ed Fletcher Real Estate Company, the founder of an insurance company and the Air Force pilot who led the industrial bombing of Rome during World War II.

He writes this during a period when newspaper reports on the Fletcher family are nonstop American cheer. On January 18, 1950, a headline in the San Diego Journal reads, “Here Are the Fletchers — Fabulous First Family of City.” The subhead proclaims, “Clan Records Are Unmarked by Divorces or Deaths.” This is, in fact, the family motto: no deaths, no divorces. Fifty-seven death-defying Fletchers appear in the wide, wide family photograph, and we learn that the Colonel calls his wife “our Mother Superior”; that their son Ferdinand, the lawyer, was “a little divvel” as a boy; that real estate developer Ed Jr. was a fine chap; that vice president Stephen is his father’s “right-hand bower.”

And always we learn how the boy Ed Fletcher stepped off the train in 1888 with $6.10 in his pocket The Fletcher story, whether told by the father or the sons, begins in a wild place, a place of possibility, and it ends triumphantly in mile after mile of houses, highways, parking lots, water pipes, schools, and convenience stores. The San Diego he and his sons extol is a San Diego long extinct.

“I belonged to a club that used to go down every Saturday to Mission Valley,” Ferdinand Fletcher tells the Tribune in 1987. “We would identify birds and flowers there. Boy, it was nothing but a jungle — an absolute jungle.”

In 1991 Ed Fletcher, Jr., tells the Tribune about herding cattle in the East County, where people farmed grapes, olives, and citrus, where there were no power lines. He recalls standing on the porch of the Grossmont house with the Colonel in 1928. “You’ll see the day when that is solid houses,” his father said. The Colonel said the same thing to Ferdinand, “You mark my words—someday it’s going to be solid from here to Los Angeles.”

In 1988, a century after Ed Fletcher rode the Santa Fe railroad from Massachusetts to San Diego, a reporter for Ranch & Coast magazine writes, “No black sheep has surfaced.” The Colonel has been dead for 33 years. The $18 billion HomeFed Bank started by his second son, Charles K. Fletcher, has yet to be seized by federal regulators. The oldest son, Ed Fletcher, Jr., is 88 years old and living in Borrego Springs, where he is writing a family history and managing the Borrego Air Ranch, a 50-year-old airport where residents taxi right up to their houses. His wife has Alzheimer’s disease.

Ed Jr.’s oldest son, Ed Fletcher III, is nearly 60 years old, a retired real estate broker in Borrego Springs, an alcoholic dove hunter who will, on opening night of dove season in 1993, get together at his home with old friends Walter and Carrlene Harper. The Harpers and the Fletchers have been friends for 40 years. On this night in August there will be an argument in the kitchen about Ed’s drunkenness. The Harpers will enrage him somehow, perhaps by refusing to stay the night at his house.

Ed Fletcher III will lift a 12-gauge shotgun and shoot Walter Harper in the chest from less than ten feet away. Carrlene will attempt to reach the phone. Fletcher will shoot her in the back. On January 18, 1995, Edward Fletcher III will be sentenced to life imprisonment for the murder of his friends Walter and Carrlene Harper, despite his lawyer’s plea that Fletcher is so poisoned by decades of alcohol that he suffers from brain damage. He will become Edward Fletcher III, CDC #J52979, Corcoran State Prison.

But this will happen long after a copy of Colonel Ed Fletcher’s memoir is buried in a massive stone on Grossmont Summit. The stone is a monument to Mary and Ed Fletcher, who wanted to be buried there. Above the dates of birth, dates of death, above the deeply etched Fletcher name, the stone reads, “We look unto the hills, from whence cometh our strength. Our dreams came true.” And on the first pages of the buried memoir, high above tract houses, strip malls, and traffic, the story as dream begins all over again in a paradise by the sea, where a boy of 15 steps off a train and looks about him.

— Marcy Hunsacker

HOW FALLEN ARE THE MIGHTY

Local Jocks Move to Drugs, Sex, and Jail

Alan Wiggins, San Diego Padres, second baseman, 1981-1985

Alan Wiggins was the first of the Padres 1984 National League Championship team to crash and burn. In 1982 he had been suspended from baseball for drug use. But a remorseful Wiggins convinced the team to give him a second chance. After a brief trip back to the minors, he returned to play 72 games for the Padres, bat .256, steal 33 bases, and, in 1984, replace Juan Bonilla as the team’s regular second baseman.

As shortstop Gary Templeton would later recall, “Alan was one of the best spark plugs the club ever had. He was the main guy in 1984. It was an automatic run for us if he got on base.”

But after the World Series, Wiggins went downhill fast. In early 1985, he disappeared for the opener of a series against the Dodgers and drew another suspension. He was admitted to a drug-treatment center for the second time. On June 27 he was traded to the Baltimore Orioles. He was released by Baltimore in 1987, after failing yet another drug test.

Four years later, in January 1991, Wiggins died of complications from AIDS. He was 32 years old. At the time of his death, he weighed just 75 pounds.

Steve Garvey, San Diego Padres, first baseman, 1983-1988

Garvey: in early 1989, hia squeaky-clean image was forever tarnished

Garvey: in early 1989, hia squeaky-clean image was forever tarnished

When the Garv’s illustrious 18-year career with the Los Angeles Dodgers and the Padres ended in 1988, he was thought to have a bright future in Republican politics. He had campaigned for several GOP candidates, including Ronald Reagan and George Bush, and was being positioned by party leaders for a run at elective office, possibly the U.S. Senate.

But in early 1989, Garvey’ s squeaky-clean image was forever tarnished when he found himself on the wrong end of two paternity suits. In February he confirmed that his former fiancee, Rebecka Mendenhall, had told him she was pregnant with his child; at the same time, an unidentified San Diego woman had told him the baby girl she delivered a week before was his. Garvey had just married a third woman less than a month after his breakup with Mendenhall. And he was also being linked to Margo Adams, who had created a furor with her $12 million palimony suit against the Boston Red Sox’ Wade Boggs.

At the time, a political consultant from Los Angeles said he doubted whether Garvey would ever recover from the scandal, that the former hero had “lost 50 percent of what he had — the credibility.” He was soon asked to resign as trustee of the University of San Diego, a Roman Catholic-affiliated school. In October, People magazine published an unflattering piece on Garvey’s custody fight with his first wife, Cyndy, whom he had divorced in 1985. The article told how Garvey had her jailed for not letting him see his daughters.

The 1990s have been no better. Garvey’s career in politics never materialized. A brief stint as a radio talk-show host ended with anemic ratings and scathing reviews. And two years ago a U.S. tax court judge ruled that Cyndy Garvey didn’t have to help her ex-husband pay off a $500,000 tax bill.

Eric Show, San Diego Padres, pitcher, 1981-1990

Eric Show: snorted half a gram of cocaine, followed it with heroin, and capped it off with a six-pack of beer

Eric Show: snorted half a gram of cocaine, followed it with heroin, and capped it off with a six-pack of beer

He was the team’s all-time winningest pitcher, with 100 victories, and an accomplished jazz musician to boot But late on the night of March 15, 1994, nearly ten years after he and his fellow Padres had played in the World Series and two years after he was cut from the Oakland Athletics — baseball was the farthest thing from Eric Show’s mind. He was nearing the end of a 30-day stay at the Rancho L’Abri drug treatment center in Dulzura, the third rehabilitation facility he’d been in over the past two years. Earlier that evening he had fallen off the wagon, hard.

Show confessed to the staff that he had snorted half a gram of cocaine, followed it with heroin, and capped it off with a six-pack of beer. He was promptly hustled off to bed, but the next morning, when nurses went to check on him, he was dead. Show was 37 years old.

Chuck Munde, San Diego Chargers, running back, 1980-1985

He was the Chargers’ star running back in the early 1980s. In the ’82 season, he rushed for 1144 yards and scored 19 touchdowns. But Muncie had started using cocaine as a senior at the University of California at Berkeley and continued when he played for the New Orleans Saints. Traded to the Chargers in 1980, Muncie at first hid his addiction well. But soon he was spotted more often at San Diego’s discos and nightclubs than on the Chargers’ training field. In 1982 he twice went through a drug detoxification program for treatment of marijuana and alcohol abuse. By 1985 Muncie had been suspended for drug use by the National Football League and gone through yet another drug-treatment program, this time for cocaine addiction. Finally, Muncie was summoned into the Chargers’ office and told he had been traded to the Minnesota Vikings.

Later that same year, Muncie “retired” from football after more drug problems. In 1988 he was indicted by a federal grand jury on charges that he tried to sell cocaine to undercover drug agents; a year later he was sent to federal prison after pleading guilty to distributing 53.5 grams. He received a stiff 30-month sentence even though the U.S. attorney’s office had promised to recommend to the judge that he serve no prison time because he had helped prosecutors nab other drug dealers. Prosecutors reneged on that deal after a court-ordered urine test revealed Muncie had used cocaine while awaiting sentencing.

In 1990 Muncie won an early release from prison and moved into a halfway house in downtown San Diego. He took a night job as doorman at the Old Ox restaurant in Pacific Beach.

Frank Duncan, San Diego Chargers, safety, 1979-1981

Last July, Frank Duncan made headlines when his former girlfriend told a jury in Redwood City, California, that he threatened to “do to her what O.J. did to Nicole.” Velda Fobbs said Duncan, a former safety from San Francisco State University, had made the threat in January, during a “terrifying” drive along U.S. Highway 101. Fobbs told jurors that Duncan kept her from leaving his truck and at one point drove her through a mortuary and asked if she would like her funeral services held there.

After the drive, the ex-football player attacked her and then assaulted his father when he tried to intervene. Duncan pleaded not guilty to charges of kidnapping, assault, battery, threatening a witness, and spousal abuse, according to a prosecutor in the San Mateo County District Attorney’s Office. Duncan was found guilty and sent to prison.

At the time of his arrest, Duncan’s mother, Bessie Smith, said her son had been unemployed “for quite some time.” This was also not his first brush with the law. In 1991, Duncan, now 38, was sentenced to a year in the San Mateo County jail in connection with the strong-arm robbery of a woman in Daly City. He also has misdemeanor convictions for battery and theft.

Charles Romes, San Diego Chargers, cornerback, 1987

He was only in San Diego for a single season, his last year in football, after ten years with the Buffalo Bills and the Kansas City Chiefs. Last December, Charles Romes, now 40, was arrested in Durham, North Carolina, for allegedly using a stolen credit card to buy a $1200 pair of earrings.

Clarence Williams, San Diego Chargers, running back, 1977-1981

Clarence Williams was with the Chargers during the “Air Coryell” years and played in two playoffs. He was then traded to the Washington Redskins in 1982, the year they beat the Miami Dolphins in the Super Bowl. Then he retired and took his family back to his native South. Carolina, where he found work selling cars at a Columbia Mitsubishi dealer. But “unbeknownst to his family and close friends',” according to a Richland County (SC) prosecutor, Williams also found crack cocaine.

One night in September of 1994, Williams and a buddy went to a topless bar and then back to Williams’s apartment to smoke crack. Shortly before midnight, according to the prosecutor, the ex-jock and his friend were cruising through “the worst crack and prostitution area of the city,” looking for “a specific prostitute,” when Williams got into an argument with another driver. As he attempted to drive off, he was shot. Williams’s killer is now serving a life sentence.

— Thomas K. Arnold

A DIFFERENT KIND OF EDUCATION

State Officials Got Indigestion at La Mesa Bowl

Frank Matranga at grand jury indictment.  Frank and Joe Matranga transferred their interest in La Mesa Bowl to a dummy corporation

Frank Matranga at grand jury indictment. Frank and Joe Matranga transferred their interest in La Mesa Bowl to a dummy corporation

Along Parkway Drive, just north of Interstate 8 between 70th and Fletcher Parkway, Coleman College’s boxy blue edifice rises out of the beige sea of townhouses and apartments. Back in 1965, two state officials got a different kind of education from the building’s original occupant — La Mesa Bowl. Arthur Belcher and Robert Haden, members of the state Alcoholic Beverage Control Appeals Board, were forced to resign after a dinner party at the bowling alley and the adjoining cabaret, the Show Bar. At the time, the Bowl’s owners and managers, Frank M. (Big Frank) Matranga and Joseph Matranga, faced the loss of their liquor license.

The ABC was established to investigate liquor license applicants’ character and records, determine prospective licensed businesses’ true ownership, and collect license fees. The board originally denied La Mesa Bowl’s liquor license because the City of La Mesa opposed the Matrangas’ application. According to the ABC, Frank and Joe Matranga, family members of Detroit mafioso John Priziola, subsequently transferred their interest in La Mesa Bowl to a dummy corporation, which then obtained the license and then transferred its interest in La Mesa Bowl and the license back to the Matrangas. In 1963, the ABC revoked La Mesa Bowl’s liquor license after discovering the fraudulent stock transfer.

An ABC review board was set to reconsider the revocation at a hearing scheduled for May 5, 1965. If the review board upheld the revocation, the Matrangas could then take their case to the three-member ABC appeals board.

On March 23, 1965, two of the three appeals board members, Haden and Belcher, traveled to San Diego for several ABC meetings. They had also been invited to dinner by Dominic Tavaglione, a long-time friend of the Matrangas. Tavaglione, a Riverside real estate broker and Brown-appointed member of the state athletic commission, arranged for Haden and Belcher to stay at the Ocean House hotel.

Tavaglione, who was trying to sell the bowling alley and cabaret for the Matrangas, met Haden and Belcher at the hotel and took them to dinner at La Mesa Bowl. During the dinner, Frank and Joe Matranga joined Tavaglione’s party. The Matrangas claimed Tavaglione paid for dinner. Tavaglione claimed the Matrangas picked up the bill.

Two days later, Governor Pat Brown called a joint press conference with Haden and Belcher to discuss the officials’ possible misconduct. Both men had tendered their resignations. Governor Brown held the resignations in abeyance pending the state attorney general’s investigation. Brown claimed the investigation would be completed within the week. At the press conference, Haden said he didn’t know the Matrangas, didn’t know before the party that he and Belcher would dine at the La Mesa Bowl, and didn’t know the Matrangas were licensees with cases pending before the ABC.

The investigation stretched into a month. During that time, Joe Matranga told reporters he talked for “five or ten minutes” with a dinner party that included Haden and Belcher. He denied being introduced to either of them or knowing they were state officials. Joe Matranga also thought the two board members had been unjustly accused of impropriety.

“Whoever gave this kind of information about them should be shot,” said Matranga. “This is a public place. What’s the matter with them coming here? I didn’t even know who they were until yesterday.”

During the investigation, the press also reported Haden and Belcher had been met at Ocean House by two women who drove with them to La Mesa Bowl and joined the dinner party. Earlier, Haden had stated the women met him and Belcher at La Mesa Bowl. Haden and Belcher said the two women drove them back to Ocean House after the party, dropped them off, and went on their way.

On May 3, Governor Brown &tcepted Haden’s and Belcher’s resignations without making the attorney general’s report public. Tavaglione, a past member of the Democratic state central committee and Riverside County manager during Brown’s previous campaign, resigned from the state athletic commission. The report established that Tavaglione had arranged the dinner party because he thought the ABC department actions against the Matrangas and La Mesa Bowl had been unjustly harsh.

After Haden’s and Belcher’s resignations, the ABC didn’t let up on La Mesa Bowl. On May 27, 1965, the ABC heard the Matrangas’ motion for reconsideration of their liquor license revocation. On June 3, the three-member panel denied the motion, and the ABC revoked La Mesa Bowl’s license. The Matrangas subsequently sought a writ in superior court to restore their license. On April 8, 1966, they lost that court fight, too.

— Leslie Ryland

WHAT MAKES SAN DIEGO SUCH AN EXCITING PLACE TO LIVE?

Murder in Numbers

When it comes to mass murders, the watchword is quantity, not quality. Any large American city can be expected occasionally to hit the jackpot with one genetic mutant or another — like Chicago’s John Wayne Gacy. But that’s really more a matter of probability than a comment on the nature of the citizens who have chosen to call that city home.

San Ysidro McDonalds massacre July 18, 1984

San Ysidro McDonalds massacre July 18, 1984

San Diego’s unique abundance of mass murders is what makes “America’s Finest City” such an exciting place to live. While other drowsy burgs content themselves with sporadic drive-bys and the isolated murder-suicide, San Diego’s perfect climate nurtures a continual supply of bloodthirsty loons. (While multiple slayings are not analyzed in the FBI’s uniform crime report, a spokesman for the bureau did admit that San Diego seemed “to have a lot” of such atrocities.)

What is it, then, that makes San Diego so special? Area natives often speculate that their city’s spectacular weather and emphasis on exercise and healthful outdoor activities lend themselves to particularly robust and athletic murderers. (Even the most energetic maniac in the Northeast would be hard-pressed to slaughter a dozen men and women if he'had to trudge after his victims through several feet of snow.) There’s something in the bright air, too, that suggests San Diego as a place where dreams can be fulfilled, whether they be dreams of becoming a world-class volleyball champ or killer of a family of five.

For whatever reason’, San Diego’s tradition of mayhem runs deep. Long-time residents like to recall December 12, 1958, as the date the city declared its ambition to. become America’s mass-murder capital. On that day Carl Eder, a 16-year-old hitchhiker, killed five members of the Pendergast family, who had kindly taken him into their Bostonia home. After shooting 37-year-old Lois Pendergast, Eder hacked up the four Pendergast children, ages 9, 6, 4, and 3. Eder later explained to authorities that the Pendergast children had been “noisy.”

San Diego, of course, was smaller then. The population boom of the late ’70s heralded new and generous vistas in violence. On January 29, 1979, 16-year-old Brenda “I Don’t Like Mondays” Spencer took aim on a San Carlos elementary school with the .22-caliber rifle she got for Christmas. By the time Spencer was ready for a snack break, she’d killed the principal, the school janitor, and wounded eight small children.

While Spencer may not have been a talented marksman, she did succeed in establishing a standard for which San Diego has become known:

— On March 28,1981, an antic teenage duo shot four people at a family picnic in Poway, killing a two-year-old boy and his grandmother.

— On February 17,1982, a grumpy 57-year-old Chula Vista man went on a shooting spree, killing three of his neighbors and wounding a sheriff s deputy after an altercation over yapping dogs.

— And July 18, 1984, was the day 41-year-old James Huberty announced to his wife that he was “going to hunt humans.” Armed with a rifle, shotgun, and pistol, Huberty barged into a busy San Ysidro McDonald’s and shot 20 people to death. His frenzy lasted more than an hour and vaulted San Diego’s most-murderous-city status to international attention.

Following the McDonald’s incident, dubbed the “McMassacre” or “Big Mac Attack” by New York tabloids, San Diego experienced a kind of lull. In June 1985, a Jordanian immigrant, believing himself to be “God’s executioner,” killed his wife and four family members in his Fletcher Hills home. In December 1986, a man shot three men and a woman to death in a College Grove-area house. In August 1989, an Escondido postal worker killed his wife, two coworkers, and later shot himself. And in June 1991, a crazy ex-employee at a Carroll Canyon plant dispatched two of his coworkers to the world to come with a shotgun.

It wasn’t until early November 1992, however, that San Diego managed again to capture the interest of the international press. On November 5, the mysterious Ian Spiro was missing, and his wife and three children were found shot dead, each with a single bullet to the head, in the Spiros’ rented Rancho Santa Fe home. Three days later Spiro’s own body was discovered in a car in Anza-Borrego Desert State Park. Spiro had apparently swallowed cyanide. Although authorities suspected him of having committed the murders, conspiracy theorists speculated that Spiro and his family had been victims of Middle Eastern intrigue.

But the ’90s have not, on the whole, proved promising for San Diego. News of mass murders from as far afield as England and the former Yugoslavia made local efforts seem puny in contrast. Still, the sheer randomness of San Diego’s violence continues to yield a sense of anything-can-happen excitement. Exercise devotees in El Cajon, for example, were surprised when, on October 14, 1993, 19-year-old James Buquet opened fire on a Family Fitness Center. He killed four and then shot himself. Less thai> two weeks later, and only a few blocks away, an elderly gent went berserk in an apartment complex and shot three people, including himself. Neighbors confided that the man had often said that children in the complex “made too much noise,” a complaint eerily similar to that made by Carl Eder after the Pendergast murders in 1958.

— Abe Opincar

THE STILLNESS OF DEER

Teenagers Open Fire on Illegal Guatemalans

On a Friday afternoon in the coldest part of the rainy season, two teenage boys walked to the eucalyptus wood near the new school. It’s a beautiful strip of trees older than the town itself. You can see it if you gaze off to the right, if you’re in the passenger seat, if you think to look. A haze clings to the trees at dusk, a blue smoke you wouldn’t notice from the road. The two boys with BB guns expected the smoke. They’d been there before for the same purpose, to shoot at the Guatemalans who live in the wood.

Fence jumping on Mexican side

Fence jumping on Mexican side

It was a rainy week that ended in bright, cold, windy afternoons, blue skies, and clouds with gray undersides like rabbit fur. The field beside the wood was thick with wild grass so green it shimmered. The dirt road was a muddy pair of lines strewn with wet hooks of beer glass, and now and then, in the yellow reeds, a rotted mattress curled in on itself, a sprung sofa bed, a twisted cushion.

The Guatemalans’ camp is invisible from the dirt road, but perhaps the boys, who were old enough to drive and nearly old enough to vote, had discovered it during study hall or at lunch, in the middle of a dance when the gym was too hot, with girls or without girls, alone on a long, dull Sunday afternoon. Perhaps they drank the beer and broke the bottles. Perhaps they carried guns on a dare this time or because their parents had complained to the police about the immigrants in the woods and nothing had happened.

Perhaps the boys were stunned, initially, that men as old as their fathers should have to live like this, could stand to live like this. The eucalyptus wood is surrounded by white horse corrals, ranch houses, blue furrowed hills, and streets with Spanish names, but the swish of tires is inaudible there. To leave the white fences at dusk for the inside of the wood is to leave everything you think you know.

It was the coldest time of the year, down in the 40s. The smooth eucalyptus trunks had an animal stillness, the stillness of a deer. Everything was a shade of silver. The wood smelled like rain, crushed bark, and mentholated smoke. Perhaps at first it was like being on a scout trip or inside a Disney jungle.

A little farther, a little deeper into the cold shade of the creek, that’s when the wood changes. The smoke is thicker and the trees are a hundred feet high, the tops of them felt rather than seen. The trash becomes larger, more intimate, more implausible: a child’s toy stove on its back, then a washing machine, and a little farther on, the broken dryer. Without doors they look open-mouthed and marooned.

Then the camp emerges, looking at first like those dens boys build for themselves, the kind of shelter where the only trash is Penthouse or Hustler, the torn pages left to rot in the woods. But the camp is bigger than that, more elaborate and skillful. Stuck to the lowest parts of the trees are three ragged cooking tents made of the black plastic you put under gravel so weeds won’t grow — and half a dozen sleeping tents made of red nylon tarps, blue tarps, and a sodden Bart Simpson comforter. The tarps are lashed to notched eucalyptus limbs and then draped— neatly reinforced — with scraps of carpet. Along the footpaths and the clotheslines and the houses made of usable trash, the unusable trash has floated down as though to the bottom of a tideless sea: Jumex cans, a disemboweled Chevette, a refrigerator drawer like a pried oyster, circular beef bones, a scattered pair of black dress shoes.

Every evening under a black plastic tarp, in the deepest shade of all, red coals burn in a wheelbarrow without wheels, pulsing waves of heat toward unlit, spidery chairs, a line of plastic water jugs, striped kittens, western shirts on a line, a cylinder of salt, a transistor radio, a bit of chicken or coffee from the market or the Catholic mission (depending on the work), and Guatemalan men in baseball caps, 3 or 4 of the 18 who live in this particular camp, some in their 20s, some in their 40s or 50s. They know a little English, please and thank you. They’re all from the same part of Guatemala. They came separately in the late summer and fall, and they came for the same reason, to send money home. It is all much

worse than they expected. They have to choose between paying rent and saving money for home, and the work is erratic in the rainy season. They stand at the church comer every day like dancers who will not be chosen. By living in the woods for four months, one man has managed to save $250 for his wife and children.

Perhaps the boys couldn’t make out the faces of the men that evening. The wood is so dark and smoky by five o’clock that the men seem like phantoms from a distance. Their bicycles are more distinct. The bikes are the only objects in the woods that haven’t been thrown away by somebody, and the spokes gleam in the remaining light. If the men could speak English, they would have said to the boys, “We bought the bicycles in Escondido and Oceanside.” Instead, they stood very still.

The boys stood on the Chevette side of the creek, lifted their BB guns, and took aim. At what point did they realize that the men in the tents were not going to run? Did this make it more fun or less?

The shots made plipping sounds in the camp. They didn’t hit anyone in the face, please and thank you, the man old enough to be their father would tell you, stirring the fire 2000 miles from home. He would say, remembering the level guns, there is nothing to be done.

-— Marcy Hunsacker

THE ODD COUPLE OF SAN DIEGO SOCIETY

Roger Hedgecock Called Him 'Mentally Ill'

He was a city councilman with a penchant for non sequiturs, offbeat ideas, and flights of rhetoric that became a running gag at city hall. She was a pop preacher who espoused “science of the mind” and was once considered the successor to Terry Cole-Whittaker.

Stroud and Mitchell: after Stroud’s divorce from Mitchell, her third husband took charge of finances for the church

Stroud and Mitchell: after Stroud’s divorce from Mitchell, her third husband took charge of finances for the church

Bill Mitchell and Sharron Stroud were the odd couple of San Diego society. They met in 1979 and were married a year later. In the beginning, Mitchell read poetry to her; in the end, according to court papers filed in connection with their 1982 divorce, she claimed that he threatened to kill her and commit suicide.

They both burst into the local spotlight around the same time, Mitchell in 1977 with his election to the city council as an antidevelopment maverick, and Stroud a year later when she became minister of the San Diego Community Church of Religious Science in Mission Valley.

From the start, people had a hard time taking Mitchell seriously. He often showed up at public functions in a kilt His ramblings during public meetings often indicated he was not paying attention. He earned the dubious distinction of annoying the bejabbers out of two mayors: Pete Wilson reportedly couldn’t stand being in the same room with Mitchell, while Roger Hedgecock once called him “mentally ill.” And Mitchell’s cranial capacity came into question on a number of occasions, like when he suggested the police department save money by not responding to false alarms and said the 911 emergency communications system would never work because there is no “ H ” on the telephone.

Still, Mitchell managed to win a second term on the city council in 1981 and launched a quixotic campaign for mayor two years later, during which his verbal gaffes made great fodder for the opposition. He told reporters he felt confident of victory because he carried a “mental image” of himself in the mayor’s office. Even so, he was trounced in the primary, with less than 5 percent of the vote. Two years later, Mitchell was rejected in his bid for a third council term. Undaunted, he ran for Congress in 1986 against incumbent Jim Bates, losing by a wide margin.

Sharron Stroud, meanwhile, was busy building her ministry. Her congregation grew from 50 people in 1978 to upwards of 1000 by 1986. That year she also launched a TV ministry on XETV, Channel 6, preaching mostly to local yuppies. Like Terry Cole-Whittaker, Stroud was a graduate of the Church of Religious Science School of Ministry in Los Angeles and studied the teachings of Science of Mind founder Ernest Holmes, who believed that God dwells within the minds of men.

But the fickleness of Stroud’s flock didn’t bode well for the local mind-science preacher. In 1983, a year after Stroud’s divorce from Mitchell, her third husband, CPA Roy Lee Gayhart II, took charge of finances for the San Diego Community Church of Religious Science, refinancing it to assure its solvency. But by the late 1980s, membership declined, the TV show was canceled, and Stroud disappeared from the public spotlight.

Since their respective falls, not much has been heard from either Mitchell or Stroud. Stung by his 1986 defeat, Mitchell gave up politics and began selling real estate. In 1987, after a spirited channeling session in which his Higher Self helped him shed 17 unwanted pounds, Mitchell briefly became a motivational speaker, putting on seminars and preaching to people that the secret to full lives and fat wallets is in the enlightened self. He went back to real estate when the market started to soar in the late 1980s and now lives in La Jolla, where he bides his time showing properties and doing marketing and governmental relations consulting.

“My clients include one fellow who does international trade shows in Bangkok, and he sent me and my wife to Bangkok last December,” Mitchell says. As for his motivational talks, they’re a thing of the past. “Real estate got so good in 1988 and 1989 I just didn’t have the time,” he says. “But I was thinking about it again just the other day.” Stroud, meanwhile, continues to preach to her flock. According to Mitchell, she’s now in the pulpit at a rented hall in what was once a Holiday Inn near the Montgomery Field airport. “She invited me to her birthday party a couple of years ago, and she still has a following,” Mitchell says. “There must have been 300 people there.”

— Thomas K. Arnold

ABSOLUTE. BLATANT GREED

San Diego's Largest Welfare Fraud Scheme

In 1991, Halloween came a day early for two San Diego County welfare workers when the San Diego district attorney’s office filed felony charges against Victoria Aguirre, Angela Nieto, and 18 others, alleging they embezzled as much as $1 million between 1986 and 1990 in San Diego’s largest welfare fraud scheme.

Welfare office at 73rd and El Cajon Blvd, where the scheme was hatched

Welfare office at 73rd and El Cajon Blvd, where the scheme was hatched

Following a year-and-a-half-long investigation, officials from the D.A.’s office, county Department of Social Services, and U.S. Department of Health and Human Services charged that Aguirre, a DSS supervisor, and Nieto, a DSS benefits analyst, created at least 25 phony welfare cases and issued the checks totaling at least $533,000 to friends, relatives, and coworkers. They in turn kicked back two-thirds of each payment to Aguirre, who allegedly kept half and paid the other half to Nieto.

The others charged included three county welfare employees, Aguirre’s brother and his wife, Aguirre’s sisters, Aguirre’s niece, and two men already in prison on unrelated charges. Aguirre, Nieto, and the three other county welfare workers resigned or were fired during the investigation.

On November 14, the D.A.’s office arraigned all but 2 of the 20 people charged in the scheme. They pleaded innocent and were allowed to remain free without bail. Hugh McLinden, serving time at the Terminal Island federal prison for bank robbery, and Amoldo Guerrero, at Folsom Prison for residential burglary, were returned to San Diego to face embezzlement charges.

Ten of the defendants pleaded guilty to welfare fraud and embezzlement charges in March of 1992. The ten included Sandra Gray, a former welfare supervisor, who allegedly received almost $100,000, and Beverly Najera, a former welfare .benefits analyst, assured of receiving more than $30,000. Gray was sentenced to four years in prison and ordered to pay $10,000 restitution. Najera’s sentence was 180 days in jail and five years’ probation.

Aguirre and Nieto pleaded guilty to embezzling public money and admitted they created false welfare accounts. Aguirre’s brother pleaded guilty to one count of embezzling public money.

In August, Judge Nicholas Kasimatis sentenced Aguirre to seven years in prison and ordered her to pay $10,000 restitution, the maximum allowed under her plea bargain. Judge Kasimatis told Aguirre she had devised the scheme to “indulge in absolute, blatant greed” and that “she has violated the public trust in a very gross way.”

Judge Kasimatis gave Nieto a six-year prison sentence and ordered her to pay $10,000 restitution. “I don’t have the words for the shame, the degradation I caused myself,” Nieto sobbed. Other defendants received penalties ranging from a year in jail and five years’ probation to 200 hours of community service and five years’ probation. Some were ordered to pay restitution. By October of 1992, all 20 defendants had pleaded guilty and been sentenced.

But Aguirre, Nieto, and their friends weren’t the only people who paid for the scheme. The

Welfare office at 73rd and El Cajon Boulevard, where Nieto and Aguirre’s scheme was hatched political fallout from San Diego’s largest welfare scam shadowed the criminal prosecutions. On December 31, 1991, while a county grand jury investigated additional fraud charges within the Department of Social Services, welfare investigator David Sossaman told reporters he believed that widespread corruption pervaded the department. He alleged the department knowingly employed a welfare worker who had been arrested twice for drug-dealing crimes and covered up internal fraud concerning phony birth certificates. Dick Reed, hired a year earlier to head the department’s new investigations, audits, and information division, told reporters he knew of no massive conspiracy within the department.

Following Sossaman’s allegations, DSS director Richard W. Jacobsen, Jr., circulated an internal memo denying Sossaman’s charges and telling welfare workers to be proud of the

department’s history of honesty. On April 1, 1992, the county grand jury issued a report criticizing the department’s failure to discourage welfare fraud. The report estimated that $70 million was lost to fraud each year, requested top management changes, and blamed Jacobsen for the department’s problems. Jacobsen was reassigned April 6.

On September 17 David Sossaman appeared on the ABC program Prime Time Live, continuing to allege widespread county welfare fraud. Prior to Sossaman’s television appearance, Dick Reed started an investigation of Sossaman’s use of county telephones and fax machines to communicate with the ABC news crew. Sossaman alleged the investigation was retaliatory. Acting social services director Cecil Steppe canceled Reed’s investigation one day after its inception. Reed resigned three days later.

— Leslie Ryland

THE SEX SCANDAL THAT WAS THE TALK OF CITY HALL

City Manager Ray Blair and Deputy Sue Williams

It began with the abrupt resignation in February 1984 of San Diego fire chief Earle Roberts. Pressed by two city council members, the chief said he decided to quit because he felt his supervisor, deputy city manager Sue Williams, was making unwise management decisions, and he felt helpless to appeal to her boss, city manager Ray Blair, because Blair and Williams were in a personal relationship. Moreover, Roberts told council members, the reported relationship had hurt the morale of some managers and could lead to the resignations of more top city officials.

Blair: was summoned to a closed-door meeting with the full city council.

Blair: was summoned to a closed-door meeting with the full city council.

The Ray Blair-Sue Williams sex scandal was the talk of city hall. Until then, Blair had been popular with his elected employers and respected by his subordinates. He had come to work for the city in 1969 as deputy city manager after leaving an executive position at General Dynamics. Elevated to city manager in 1977, he became known as a strong-willed administrator who ran the city’s daily business while answering to an equally strong mayor and council.

Within days of Roberts’s resignation, Blair was summoned to a closed-door meeting with the full city council. He was asked directly three times whether he was having an affair with Williams, and three times he would neither confirm nor deny the link. Blair did concede that his relationship with Williams had come up a year earlier during two private conversations with then-mayor Pete Wilson.

Four days later, the city council gave Blair a vote of confidence, and Mayor Hedgecock promised that no major changes would take place in the manager’s office, although some on the council felt

Williams should be reassigned. “He’s a good city manager,” Councilman Ed Struiksma said in an interview for the San Diego Tribune. “That’s probably how he survived it.”

Still, the alleged affair continued to be a regular topic of gossip, and one insider said the closed-door meeting included a “suggestion” that either Blair or Williams leave city hall within six months.

In April, Blair was in the news again, this time for a brain aneurysm he suffered while driving his car, which nearly cost him his life but generated an outpouring of public sympathy.

When Blair returned to work in late October 1984, the buzz about his relationship with Williams resumed. City hall insiders say the rumors contributed heavily to Blair’s announcement in May 1985 that he would resign the next month, ostensibly because of his high blood pressure. Soon thereafter, Williams announced she, too, would be leaving. Their resignations would take effect the same day.

Two months later, Blair and Williams formed their own consulting firm, offering management services and serving as a liaison between local government and private companies. In January 1986, Blair’s estranged wife Nancy committed suicide in the couple’s La Jolla home. Blair and Williams were married later that year.

In January 1989, Blair was named interim city manager of Escondido one week after the regular city manager was pressured to resign. Escondido’s mayor said at the time that Blair’s appointment was for only six months and he was not a candidate for the permanent post.

In August 1994, Blair was hired as president of Pacific Ship Repair and Fabrication in the midst of a contentious management rift in which six top executives abruptly resigned. The departing executives had accused the company’s chairman and trustee of contacting the shipyard’s owner, David Bain, who had been indicted in 1990 on various federal offenses and barred from running the business or contacting its officers. Bain later pleaded guilty to filing a false corporate tax return and to violating federal campaign contribution laws.

— Thomas K. Arnold

THE AYATOLLAH OF REAGANOMICS

People in This Town Took Her Seriously

It seems like only yesterday that San Diego was filled with legions of men and women who drove flashy cars adorned with ‘‘Prosperity, Your Divine Right” bumper stickers. These people had bright, lucid, rabbit eyes and evinced toward all things a fanatical optimism. They were the Hezbollah of Reaganomics.

Whittaker: announced to her La folia congregation that she was leaving her career as Religious Science minister to “spend time in nature”

Whittaker: announced to her La folia congregation that she was leaving her career as Religious Science minister to “spend time in nature”

The Reverend Terry Cole-Whittaker was the ayatollah of this religious vanguard. During the early ’80s it was impossible to live in San Diego without encountering her devotees. You met them at parties. You saw them at restaurants. Press releases for their inspirational, early-bird “networking” breakfasts flooded the mail. Whittaker’s blond chirpiness infused the city. As unlikely as it may now seem, Whittaker was taken seriously by a great many people. She was a San Diego “mover and shaker” at a time when people used phrases like “mover and shaker” without irony.

Then, as suddenly as she had risen to national fame, Terry Cole-Whittaker and her vast, think-and-grow-rich empire shuddered into obscurity. On Easter Sunday 1985, Whittaker announced to her La folia congregation that she was leaving her career as Religious Science minister to “spend time in nature” and “maybe move to Hawaii or the mountains.” The official reason for Whittaker’s spiritual watershed was that after a trip to India, Whittaker realized “people could be happy without driving Rolls-Royces.” Less credulous observers suggested the actual reason Whittaker left her church was that it was $400,000 in debt.

That Whittaker should willingly forsake her cash cow appeared improbable. The onetime Miss California had, after all, built a career on scorning poverty as “irresponsibility” and assuring her predominantly white, upper-middle-class following that God wanted them to be rich. She held herself up as her gospel’s living proof. After starting in 1974 as a Religious Science minister with a teensy La folia congregation of only 50, Whittaker soon became so popular that her Sunday services were moved to school auditoriums and later to the El Cortez Hotel. By the early ’80s, Whittaker’s television show was broadcast in 19 markets. Her yearly salary, excluding royalties from her books, was $180,000, and the Wall Street Journal estimated her church operated on an annual budget in excess of $ 10 million.

There had, of course, been indications from the very beginning that Whittaker was more opportunist than evangelist. But the early ’80s was a time of easy faith, and few thought it odd that a three-time divorcee should lecture men and women for a fee on how to make their relationships last. Even fewer questioned the coherence of a woman who could claim with a straight face that victims of mass murderers, even victims of the Holocaust, had “created” their deaths through their own less-than-positive thoughts.

It’s difficult to pinpoint the exact moment the Whittaker era ended in San Diego. It certainly wasn’t that Easter Sunday morning in 1985, because Whittaker’s name kept popping up in the strangest places.long after she’d announced her departure. In the early summer of 1990, for example, it appeared with odd regularity in Los Angeles Times stories concerning one of the largest criminal prosecutions of lawyers in U.S. history. Attorney Leonard Radomile, Whittaker’s fourth and perhaps briefest husband, played a key role in the case as an undercover informant, although he was later indicted along with many other lawyers accused of insurance- related fraud. But long before Radomile appeared on 60 Minutes to discuss his involvement in the case, he had been the proud micromanager of Whittaker’s career. It was

Radomile who claimed to have crafted Whittaker’s seductive television persona. It was Radomile who corrected her posture, taught her how to gesture, and recommended she shift her wardrobe to “soft pastels.”

Even after Radomile’s indictment, Whittaker’s name continued to surface. She became a regular “special guest speaker” on the New-Age convention circuit. For a while she fell back upon her pre-Indian enlightenment ways and publicly embraced a “Money Is God in Action” shtick. None of this, however, was as troubling or as unsurprising, depending on your point of view, as Whittaker’s cameo appearances in newspaper stories that hit the streets in July 1993. These articles were headlined in large type that tended to read, “Middle-Aged Man with a Gun and a Grudge Goes Berserk.”

Fifty-five-year-old mortgage broker Gian Luigi Ferri was a man acquaintances remembered as having laughed a little too hard and a little too long at lawyer jokes. And it was Ferri who, on July 1, 1993, armed with two 9mm Intratec TEC-9 pistols and a .45-caliber semi-automatic handgun, sauntered into the San Francisco offices of the Pettit & Martin law firm and spent 15 minutes shooting as many people as he could. A one-time recipient of what he considered “bad legal counsel” from Pettit & Martin, Ferri blamed the “legal community” for his persistent financial failures. In a letter found on his body in the Pettit & Martin stairwell where he committed suicide, Ferri wrote, “There is this condescending attitude in business that when you get emotionally and mentally raped, well ‘you got screwed’ and the accepted results is that the victim is now supposed to go to work at 7-11 or become homeless and the rapist is admired and envied as ‘a winner.’ ”

In the many articles that followed Ferri’s killing spree, few failed to mention that after a divorce in the late ’70s, Ferri began volunteering for the Rev. Terry Cole-Whittaker. His ex-wife told reporters that Ferri embraced Whittaker’s think-and-grow-rich philosophy, and her “Prosperity, Your Divine Right” slogan eventually “became his gospel.”

— Abe Opincar

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