Steve Peace Isn't Happy

— 'From what I have been through, I call this city 'The Banana Republic of San Diego.' It appears that we have a system of government not built on laws, but on relationships. That is the way banana republics work."

Speaking is Stanley Zubel, lawyer for Harvey Furgatch, former port commissioner. In 1998, those who wanted the city to subsidize the Padres' ballpark had a problem: there was a $21 million hole in the financing that had not been filled. Three weeks before the election, on October 20, 1998, then-port commission chairman David Malcolm, beaming next to then-Mayor Susan Golding, announced that the port would close that $21 million gap. Ever since, Furgatch and Zubel have been going through the courts, pointing out that the port was inflating assets with the flick of a pencil to make an illegal gift so the ballpark project could go ahead.

Twice the appeals court has rebuked superior-court judges for dismissing the Furgatch suits. An impatient appellate court has even lectured San Diego superior-court on correct legal procedures in such cases. Up until late last week, the cases just sat. Superior court wouldn't name a judge and would't tell Zubel why.

"There is something fomenting under the surface in San Diego," says Zubel. "It's this question: are superior court judges treating these ballpark cases fairly and according to the requirements of the law?"

Zubel has unearthed an important document in the scandal. In August of 1998, then-state senator Steve Peace -- now a consultant to Padres majority owner John Moores -- was trying to get the legislature to slap on a $2 to $3 fee on rental cars on port district property, including the airport, allegedly to pay for a parking garage at the expanded convention center. Peace successfully pushed the bill through in 12 days. On August 20, 1998, a Union-Tribune article noted that the new parking garage would be near the ballpark. Some people expressed skepticism. The port's then-executive director said that while the bill only alluded to parking for the convention center, there could be other uses, too.

Feces hit the fan. The same day, August 20, Malcolm sent an emergency message to commissioners and staff. "I just got off the phone with Senator Peace and he is mad as Hell!" said Malcolm. "He said the comments in today's paper have probably killed this bill. He wants NOBODY to say anything about the ballpark. This parking fee is being used ONLY FOR THE CONVENTION CENTER. As we all know, the Senator has said, 'The assembly and the Governor will kill the bill if anyone talks about the ballpark.' "

Then on October 20 came the announcement that the port would fill the $21 million gap by chipping in a parking area -- presumably one that would serve the convention center, even though it was a long walk away.

First, Furgatch and Zubel sued, saying the port had violated the Brown Act, which restricts the ability of government bodies to hold secret sessions. Reams of documents indicated that port commissioners must have discussed the issue at a closed meeting held on October 20, but they never advised the public or reported its closed-session discussion. Then Malcolm and another commissioner got on the stand and solemnly swore that they never discussed the topic at the closed-session meeting that day. Judge William Pate said he was a good judge of people, and he believed Malcolm and the other commissioner, despite all the evidence to the contrary. (There is no record of Pate's reaction when in 2003, Malcolm pleaded guilty to felony conflict of interest for taking $20,000 a month from a port tenant while he was a commissioner.)

Furgatch and Zubel didn't appeal that one, but they did go to work on other aspects of the case. "This was nothing more than a gift from the port to the Padres/city partnership," says Zubel. He notes that the port's own in-house real estate executives could only come to a $12 million valuation of the property; hence, the number had been stretched to reach $21 million. In contravention of the law, the parking lot is not on tidelands property that the port controls. Initially, the port ruled that it could put the lot on non-tidelands property because it had no suitable land on the tidelands. But then the port tried to wipe that away because it had approved a measure to build a parking structure on Campbell Shipyards property on the tidelands.

In 1999, according to Furgatch and Zubel, the port began applying the car-rental fees -- $3 million a year -- to its fund for buying the tailgate parking lots for the ballpark. "That was unlawful," says Zubel, because those fees were restricted for construction of a parking structure adjacent to the convention center. "In a deposition, the chief executive of the convention center was unable to cite a single instance since the tailgate lots opened in March of 2004 when they were used for any convention center-related purpose. And there would be no such use in the foreseeable future."

Judge Linda Quinn initially threw out the suits on grounds that the city should have been joined as a party. But the appellate court said that there was no such thing as an indispensable party in such a suit. The cases then went to Judge S. Charles Wickersham. He said that the suit should have named the state lands commission, even though Zubel showed him the appellate court's decision. Back it went to appeals court. This time, the court got testy. "The appeals court went out of its way to give a new trial judge guidance on how to handle evidentiary issues," says Zubel.

The third hearing was to go to Judge Jay Bloom. But on April 29, he said he was taking another case. After a wait, Bloom said that Judge Frederic Link would take the case. "My jaw probably hit the carpet," says Zubel. Link had fined him $10,000 in another controversial ballpark-related case three years earlier. Zubel had appealed the fine, and the appeals court had dropped it to $900. "Any reasonable person possessing all the facts would see Judge Link as somebody not impartial."

Zubel challenged the Link appointment, and then sat and waited. From April 29 to May 13, he waited daily for the naming of a new judge but heard nothing. "The day-to-day delay in naming of a trial judge in such an instance is practically unprecedented in the history of the superior court," he says. On Friday the 13th, he was assigned Judge Thomas O. LaVoy. In all the delay, "They have not just iced my case, they have iced my practice," Zubel says.

Why did the court take so long? "Nobody in superior court wanted the case. It will be a tremendous embarrassment to the port and the city," says former District 6 councilmember (1986-'91) Bruce Henderson. "If Harvey wins, one can clearly infer there were criminal violations."

The money from the rental-car boost "was not meant for the ballpark," insists Malcolm, chairman of Suncoast Financial. "It was not a ruse to provide parking to the Padres."

"The bill had nothing to do with the ballpark," says Peace, whose work for Moores is mainly related to political matters, he says. The reason he was so upset on August 20, 1998, he says, was that the Federal Aviation Administration had to approve the measure. The proceeds from the fee boost had to go to federal activity. The ballpark didn't meet that criterion. "I wanted to make sure it was used in a way that was approved federally."

Zubel and Furgatch agree that the money had to go to federal purposes, although that is not part of their state court cases. "Harvey has filed a complaint with the Federal Aviation Administration, has claimed that airport revenues were misdirected, has sent letters to congressmen, everybody... There is a black-hole reception," says Zubel.

Just as is in superior court -- and banana republics.

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