Other big names in the San Diego establishment had apparently heeded Simons's advice to buy in big. In addition to the city commissioners, partners in Simons's many border partnerships, according to the Union, included former city councilman Tom Hom. Hom was turned out of office by voters five years before in the infamous Yellow Cab scandal, in which councilmembers were accused of getting illegal campaign contributions from C. Arnholt Smith. (One councilman pleaded no contest, the others, including Hom, were acquitted or the charges against them dropped.) Among other Simons partners were wealthy customs broker David Porter and his socialite wife Kaye and Edward C. Hall, a well-connected San Diego real estate broker and Porter's father-in-law. All were friends of then-mayor Pete Wilson and gave heavily to local campaigns. Hall told the Union's Standefer that "Simons's family long ago began buying up border real estate from El Paso to the Pacific. 'Then Joe's older brothers didn't want to, so he went out and got all these other people to invest.' "
Rumors of inside deals and midnight meetings in Tijuana bars, where cash was passed to city officials, swirled through the city during 1978. The border was hot, and information soon emerged about others, unrelated to Simons, who had also cast their lot in property there, including Verne Thompson, a real estate broker and fundraiser for then-governor Jerry Brown, and Charles Pipitone and Charles Geraldi. The Union's Standefer reported that financier Alan Glick, who later turned state's evidence and testified against the Mafia in the infamous Las Vegas Stardust skimming case, also was a member of a partnership that owned land in San Ysidro.
Stories circulated about how the San Diego Union had almost killed the Simons story until Union reporter Violet Murphy, heavyset and hard as nails, leaked some of it to Larry Remer, then editor and publisher of Newsline, an antiestablishment weekly newspaper. Murphy, who would die of cancer in December 1987 at age 63, had quit the Union in disgust and moved to Redding in 1977. She was reportedly angry that Union editors were still sitting on the exposé more than a year after she'd handed it in. To the end of her days, she would insist that the newspaper had suppressed a mountain of incriminating evidence she had dug up against well-connected San Diegans and a world of border mafiosi. Her manuscript, documenting the secret dealings in border property, she said, had been stolen from her office safe by unknown thieves. Union editors denied they had attempted to hush up the story, but there was no denying that a day after Remer's version ran in Newsline, the Standefer story appeared on page one of the Union.
After an FBI investigation that lasted 18 months, U.S. Attorney Michael Walsh washed his hands of the entire matter, citing "insufficient evidence" to prosecute. Delawie and Padilla, still denying they had broken any laws, said they regretted causing any "appearance" of conflict. Walsh told a reporter from San Diego Magazine that the FBI had not been discreet enough in its conduct of the investigation, which he called "unfortunate."
Upon his retirement from the planning commission in April 1982, Delawie told the San Diego Tribune that he had "learned his lesson and ever since he's refrained from voting on any issue where there might even be an appearance of a conflict." The big plans to develop the Simons property were also put on the shelf, in part, it was said by sources in the mayor's office, because the FBI scrutiny of the public officials partnered with Simons had scared off other investors and made city hall, and especially Pete Wilson, afraid of being publicly associated with any of the Simons ventures.
San Diego Magazine reported in 1980 that "Padilla also admitted that he had made a mistake in not disclosing that he had purchased land from Phil Creaser, a San Ysidro businessman who later came before the [planning] Commission for a zoning change, from agricultural to industrial park, on other property that Padilla approved, thereby enhancing its value. But the investigators determined Padilla's favorable vote was not a quid pro quo -- that Padilla had paid full market value in the first transaction, and the later zoning change awarded to Creaser's other property was in conformity with the San Ysidro Community Plan and the Planning Department's recommendations."
McCannon, however, remains unconvinced that Mike Walsh did everything he could in the pursuit of justice. "My theory is that Walsh dropped the case because of political pressure from Pete Wilson. The FBI really felt they had an excellent case, and they are a better judge than I am by far," he says today. "The agent in charge was transferred to Denver almost immediately. This was a classic cover-up by the Feds."
Former U.S. Attorney Walsh is no longer available for comment. Once viewed as a rising star in the world of San Diego politics, Walsh abruptly switched careers shortly after the Simons scandal, departing San Diego in 1980 for a job as vice president of Cummins Engine Co. in Columbus, Indiana. He would climb high in the powerful realms of corporate America, rising to board chairman of the giant Tenneco Corporation before being stricken with a brain tumor and dying in 1994 at age 51.
While the commissioners were off the hook, McCannon soon found himself under scrutiny. TV reporter and commentator Harold Keen went after McCannon in a story that appeared in the July 1980 edition of San Diego Magazine. According to Keen's version, an overzealous news media, spurred on by competition between the Union and the newly arrived San Diego edition of the Los Angeles Times, and acting on McCannon's tips and Violet Murphy's digging, had wrongly impugned the reputation of the three city commissioners who had invested in Simons's deals, especially Padilla.
"Padilla's original land acquisitions in San Ysidro, dating back to 1964, related to his need of commercial property for his Mexican insurance business," Keen wrote. "Had he stopped there instead of getting involved with 'wheeler-dealer' Joe Simons, he would have avoided problems with the press and, subsequently, the FBI and U.S. Attorney. One of the most conspicuous eyebrow-raisers was a chain of events that started with a plan to combine some of his personally owned land, which had been bypassed by the I-5 freeway, with adjoining property of a Simons partnership. The idea was to create a tract large enough to attract a developer (ultimately, plans for either a Tourist Center of varied enterprises, or a shopping center, were dropped and no development has occurred, an irony in the face of suspicions that Padilla stood to profit immensely from decisions he made on the Planning Commission with regard to commercial zoning)."