When it was announced two weeks ago that John Moores had pledged $20 million toward construction of a $75 million cancer-research center at the University of California San Diego, Los Angeles Times reporter Tony Perry wrote that it was "another sign that the city has hit 'the philanthropic big leagues.'" Perry quoted Bob Kelly, president and CEO of the San Diego Community Foundation as saying, "Just 10 years ago, it was an enormous deal if someone gave $10,000 in San Diego."
Moores, of course, is not our first Daddy Warbucks. That honor goes to C. Arnholt Smith, whose interlocking corporations back in the 1950s and 1960s owned the town. The former bank teller who rose to become president of and chief stockholder in the United States National Bank, managed to gain control of everything from a shipyard (National), to an airline (Air California), to taxis (Yellow Cab), to a tuna cannery (Sun Harbor), and a baseball team, (the Padres). He became best friend of then-president-to-be Richard M. Nixon, and shoveled millions into his campaigns.
Smith's beneficence earned him the "Mr. San Diego" award from the Grant Club in 1961 and in 1966 the "Gentleman of Distinction" honor from another group of civic boosters. A buddy of Jim Copley, Smith enjoyed the flattering attention of Copley's Union and Evening Tribune right up until his business empire went bust in the mid 1970s. Smith's downfall preceded Nixon's by a year, as federal regulators closed in on his bank and discovered he had looted it by making an estimated $100 million in unsecured loans to his dummy corporations.
The bank's collapse in 1973 was at that time the biggest in American history. Angry investors lost millions of dollars as the value of stock in his company plunged to zero. Smith pled no contest to four federal bank-fraud charges in 1975 and escaped prison, but in 1984 he ended up doing a six-month stretch on state-tax fraud charges in a Barrio Logan halfway house. Smith's name became synonymous with the city's reputation for harboring fly-by-night financiers.
After Smith's death in June 1996 at the age of 97, financial mogul Leon Parma paid tribute to Smith. "He brought a lot of industry to town and did a great deal for San Diego, and I think his thoughts were always for San Diego." Former Democratic congressman Lionel Van Deerlin agreed: "I don't know of many people who've done more for San Diego. He was a real captain of industry and where the hell would we be without him?" Said Buzzie Bavasi, president of Smith's Padres: "He did more for San Diego than any other man I met. He always told me whatever was good for the city was good for C. Arnholt and vice versa. I'm sorry to hear he's gone."
John Moores is San Diego's latest Warbucks incarnation. A Texas born-and-bred computer entrepreneur who is reputedly worth $500 million or more, he bought the Padres in 1994 and ever since has pitched millions into local charities and schools. These institutions, in turn, have been happy to endorse his taxpayer-subsidized downtown baseball stadium.
Moores has also become enmeshed in the Valerie Stallings scandal. Stallings, a San Diego city councilwoman who has repeatedly voted in favor of Moores's downtown stadium, made a well-timed investment a year ago last March in Neon Systems, a start-up company controlled by Moores. She held the stock a month before selling it for what she said was a $7600 profit. Moores, as did C. Arnholt Smith, gives heavily to political campaigns, including those of City Attorney Casey Gwinn, who has said he could find nothing wrong with Stallings's dealings. Moores has denied to Union-Tribune editorial writers that he had anything to do with the Stallings transaction.
Moores also befriends academia. In 1991 he donated $51 million to his alma mater, the University of Houston. In addition to his $20 million pledge to the UCSD cancer center, he has become a major supporter of San Diego State University, contributing at least $28.6 million to a variety of sports and athletic causes, including the school's Tony Gwynn Stadium, where its baseball team plays, and a new athletic office complex.
What has Moores gotten in return from these schools? A review of correspondence to Moores from SDSU administrators over the last several years, obtained under the California Public Records Act, shows that school leaders have been solicitous of their benefactor.
When Moores steered a prospective student their way, the letters show, SDSU president Stephen Weber carefully oversaw the admissions process. When Moores wanted a new stadium for the Padres, Weber proposed that SDSU become involved in order to provide tax breaks for Moores. When the university sought donors to fund a "Presidential House" in Coronado for Weber, the letters show that SDSU officials repeatedly mentioned the matter to Moores.
The correspondence shows that SDSU officials, including athletic director Rick Bay, came to Moores seeking to raise funds for the university's financially troubled athletic programs. Presented here is a selection of letters between SDSU officials and Moores.
December 9, 1997
Mr. John Moores
12680 Highbluff, Suite 200
San Diego, CA 92130
This letter is to introduce the concept of a public/private partnership, which would enable the financing and constructing of a baseball stadium for the San Diego Padres. The partnership would be between you and San Diego State University, with whom you have obviously established a history of philanthropy.
Such a partnership would require the ability of SDSU to link our educational mission with the ownership/operation of a baseball stadium. We believe that challenge might be met in a variety of ways, most significantly with the possibility that SDSU would establish an educational center with programs and curricula meeting regional educational needs in the fields of sports management, hospitality and hotel/restaurant management.
The partnership also assumes that whatever personal stake you intend to contribute to the baseball stadium is significantly stretched by the multiple tax advantages associated with a charitable contribution. With this contribution, and assuming naming-rights revenue and sufficient operating income, SDSU would seek to purchase a site and secure construction financing either as a governmental agency, through one of our existing nonprofit corporations, or through a newly established nonprofit. Under such a scenario, a public vote would not be required. The stadium would be leased back to the Padres, and the site would be available for joint use for our educational programs. Perhaps there would be an opportunity to generate revenue in support of our athletic program as well.