Mr. Bandstand Snarled in High-Tech Tijuana

— The never-aging Dick Clark, who began his career 44 years ago in Philadelphia as the host of that TV teen dance party, American Bandstand, and its forever-popular "Rate-a-Record" segment, has made millions, mostly by merchandising old-time rock and roll and other forms of popular culture. Clark's public company, dick clark Productions, makes awards shows like The 27th Annual American Music Awards, The 57th Annual Golden Globe Awards, and The 35th Annual Academy of Country Music Awards, not to mention The 27th Annual Daytime Emmy Awards.

Clark's Burbank-based company also cranks out game shows like Greed and Your Big Break, variety series like Prime Time Country, so-called "reality" shows for the Fox Network, such as Who Is the Smartest Kid in America? and Beyond Belief, and the syndicated Donny and Marie daytime talk show.

Clark's firm is also responsible for such video gems as TV's Bloopers and Practical Jokes, television movies like The Good Doctor: The Paul Fleiss Story, about the father of Hollywood madam Heidi Fleiss, and Elvis and the Colonel: The Untold Story, as well as radio's nostalgic Dick Clark's Rock, Roll, and Remember. He even licenses his name and that of his shows, including Bandstand and New Year's Rockin' Eve, for use by state lotteries and slot machines in Las Vegas.

Lately, the company has jumped into the restaurant business with a chain of "Dick Clark's American Bandstand Grills" and "Dick Clark's AB Diners," now in nine locations throughout the Midwest, where Clark has long had a fierce following of female baby-boomers, who once swooned over his movie debut as an inner-city high school teacher in 1960's Because They're Young.

Now, Clark, who turned 71 on November 30, has embarked on yet another venture he and his partner hope will net them millions. Clark and his longtime business partner, cable television entrepreneur Dick Lubic, have formed a public company to build what Lubic says will be a $200 million, state-of-the-art Internet, cable television, and phone system for Tijuana. The installation, according to a company disclosure document, "will ultimately be part of one of Latin America's largest broadband fiber-optic networks, comprising more than 2000 miles of broadband cable in the northwest Mexican cities of Tijuana and Mexicali, Baja California."

So far, though, their efforts have been dogged by falling stock prices, lawsuits, allegations of stolen securities, and questions raised by the involvement in the venture of Carlos Bustamante, a Tijuana businessman whose wealthy family is linked to fallen San Diego financier Richard Silberman, his ex-wife Susan Golding, and their one-time friend, ex-California Governor Jerry Brown. The official groundbreaking, Lubic says, is set for later this month next to a Bustamante-owned maquiladora plant in the neighborhood of Matamoros on the east side of Tijuana.

"We're going to do a promotion with Dick Clark with a hard hat on standing by all this equipment, because it's the new millennium, changing from rock and roll to broadband communication and adjusting from the old-style entertainment to the new style. That'll be the lead story," says the genial, fast-talking Lubic, interviewed by telephone from his office at a tiny Tehachapi cable company he and Clark's new company, called InfoAmerica, own on the edge of the Mojave Desert.

"We'll do that promotion in Spanish and English to different news organizations, because we always have to go out and raise money. It's the classic story. But with Dick Clark we get on CNN, CNBC, MSNBC, Mexican stations, news magazines, newspapers, the whole works," says Lubic, to whom Clark's Burbank office refers calls regarding the venture. "I'm going to Europe at the end of the week. I gotta go to about ten different cities, to visit investors and raise more money.

"Dick Clark and I have put up approximately $25 million already, and we've raised approximately another $10 million," Lubic claims. "And then we're always constantly raising money with investors in Europe -- most of our investors are in Europe. And then what we'll do is probably an offering. As soon as we get 5000 or 7000 or maybe 10,000 subscribers on cable in, we'll go back into the stock market. Right now you don't want to go into the market, but in the spring or early summer. There is also debt-financing and bank-financing. Right now we don't have any debt; we put up all the money." Clark and Lubic are no strangers to Tijuana. A mid-'90s effort by the pair to build a digital-communications system there with links to universities and hotels almost immediately ran into trouble. Instead, it spawned a series of bitter lawsuits and nasty charges and countercharges between Clark, Lubic, and their one-time La Jolla and Mexican partners, who claimed their deal collapsed because Lubic and Clark did not come through with millions of dollars of financing they had allegedly promised. "Dick Clark and I formed a Mexican company called Astrovision," explains Lubic, "and Astrovision bought licenses in Mexico from a group in La Jolla, and the La Jolla group turned out to be not nice people. They misrepresented a lot of things. They sued us, and we went to federal district court in New York and we won."

By 1997, Clark and Lubic had met up with Mexican tycoon Bustamante, formed an outfit named Cable California, and announced they were on the way to building a cable TV system for Tijuana. "The system will provide cable TV, telephone, and high-speed data services to an expected 250 to 300,000 customers by 2000," reported Multichannel News International in May of that year. "Mexico really has been very backward in the sense of having the old-style cable without upgrading," the publication quoted Bustamante as saying.

Lubic says he first met Bustamante through Orange County developer Donald Koll. "Carlos Bustamante and Don Koll were on the board of Atlas Hotels in San Diego, and I knew Don Koll as a business associate, and he introduced me to Carlos, and Carlos and I became friends and he became a partner. Don Koll owned a hotel in Cabo San Lucas, and Carlos owned a hotel in Tijuana."

Bustamante and his family, with strong ties to Mexico's then-invincible PRI, the country's ruling political party, had long owned Tijuana's cooking and heating gas-distribution monopoly and over the years diversified into everything from maquiladora plants to a giant airliner-repair facility they built at Rodriguez Field, the city's airport on Otay Mesa. Bustamante was also a friend of Richard Silberman. Until his 1991 criminal conviction and federal imprisonment, stemming from an FBI drug-money laundering sting, Democrat Silberman was one of the state's most powerful political operators. During the 1970s and early 1980s, his close business and fundraising ties to then-governor Jerry Brown and his father, ex-governor Edmund G. Brown, made him the man to see for those seeking influence in Sacramento.

Bustamante figured prominently in a March 1979 front-page exposé in the New York Times, in which it was alleged that Bustamante had made unreported contributions to the gubernatorial campaigns of Jerry Brown and extended Brown special hospitality when the governor traveled to Mexico. "Jerry goes down to Tijuana, he stays at Carlos's house. I was there," the paper quoted a close Brown family friend as saying. "You know how frugal he is. He doesn't like to pay for a hotel."

According to the Times story, Bustamante was said to be seeking help in a series of state decisions involving his business in Mexico, including an ocean-front power plant to be built with SDG&E. Gray Davis, who was then Brown's chief of staff and is now California governor, was quoted as saying there was not "the slightest connection" between the governor's actions and the interests of the Bustamantes.

After Brown left office in 1982, Silberman and Bustamante remained close, and Bustamante showed up on wiretap records of Silberman telephone conversations made during the FBI's money-laundering sting. In February 1989, according to the wiretap logs, 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."

That same month, a caller identified as Bustamanate was recorded as saying, "I turn over the factory on the past day of the month. It's about $400,000 plus the contract." Later that day, the taps showed, Susan Golding, then a county supervisor married to Silberman, was to host a reception in honor of Tijuana businessmen.

Lubic says he doesn't know Silberman but has heard of him. "Didn't he get convicted of something? I've never met him. Carlos has never mentioned him. But I know from reading stories he got involved in something. He was married to the lady mayor, right? I think he went to prison, but I don't know what it was for. I guess he's out now."

Clark and Lubic announced their latest cable-TV deal with Bustamante in August 1999. They acquired InfoAmerica, a so-called "shell" company traded over-the-counter that, until Clark and Lubic came upon the scene, had been based in Fort Collins, Colorado, and engaged in an unrelated business. After purchasing the shell, Lubic says, he and Clark merged into it their holdings, namely, Country Cable, the 2000-subscriber Tehachapi cable-TV system. Bustamante contributed his Tijuana-based Cable California in exchange for stock in the venture, Lubic says.

"Dick Clark and I are very excited about the merger with our friend and business associate in Mexico, Carlos Bustamante," said Lubic in an InfoAmerica news release. "We believe this new venture will allow a rapid expansion of fiber-optical networks throughout Mexico and provide high-speed telecommunications of voice and video to businesses and residents of the country. The Mexican market represents a tremendous opportunity, and, along with a burgeoning Hispanic population in Southern California, we anticipate strong growth."

As part of the deal, the trio also picked up some new shareholders with interesting backgrounds. According to Lubic, a Los Angeles investor named Byron Lasky "brought the shell to me. I've known him 20 years. He was involved in the beginning, but he's no longer involved. He is a shareholder now, I think. He has restricted shares."

Over the years, Lasky has been associated with a number of controversial ventures, including a troubled Las Vegas casino and a federally subsidized housing project in Washington, D.C., called Skytowers, which was featured in a Washington Post report in October 1993 about the city's slum problem. "Skytowers? Is that in Washington D.C.? I've never been there," Lasky was quoted as saying. "We just put money into that project for the tax breaks we'd get." In September 1995, the Baltimore Sun reported that a Lasky-related subsidized housing project there was foreclosed on by the government and set for demolition because it was "virtually abandoned."

This October, an InfoAmerica stockholder by the name of Stewart Sytner filed suit in Florida state court alleging that he had sold $250,000 worth of the company's stock to a man who paid for it with a check that later bounced. "Said stock certificates were fully endorsed by the Plaintiff and could be sold by the Defendant on the public market unless enjoined by the Honorable Court from doing so. Defendant is a Dominican citizen who could sell the stock and flee the United States of America, leaving the plaintiff with no recourse," according to Sytner's court declaration.

Just by coincidence, Lubic says, he and Clark own a cable TV concession in the Dominican Republic.

According to an InfoAmerica news release dated October 31, the company believed "that the recent increase and heavy trading activities over the last few weeks is a direct result of the illegal selling of these stolen securities. The company and its counsel are assisting the Florida court in the shareholders' return of the 450,000 shares that have been illegally utilized in this type of fraud."

Lubic says that InfoAmerica stock lost significant value during the incident. "Those 450,000 shares went into the market, and our stock was going down like terrible, so I went and bought back through the corporation, I think probably 450,000 shares, which was good because I got them at a low price, and when the market goes up, we can sell those shares into the market and get cash back."

That may take a while, though, if present trends continue. As of Tuesday, InfoAmerica was trading at 63 cents a share, down from its high of almost $3 back in May. But Lubic says he has no doubts that the venture is destined for glory.

"What we're building is a broadband fiber-optic network, with high-speed networks going from one place to another. It's a cable TV company, a digital-data company, an Internet carrier, and everything else you can imagine.

"And then we have a group of marketing vans. They are building them right now. They will go up and down the street with video platforms on them so the people can see the kind of pictures and programs they'll get, and they'll have music on it and announcements. And they will have doorhangers to look at. They can walk right up to the marketing van and order the service. You got to market that way in Mexico, you know. You got to go door to door."

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