The death of another famous San Diegan brings another memory of an infamous San Diego scam. Last month it was the passing of George Munger, owner of the now-defunct Piret’s restaurant chain and recipient of a $150,000 loan from Ponzi schemer J. David Dominelli. Early this month it was Jack Kemp, the ex–Charger quarterback and GOP congressman who got his start in politics while working part-time in the mid-1960s for the Copley Press under the guidance of Herb Klein, the Copley executive and future aide to Richard Nixon. The Union-Tribune, on its very first editorial page under the control of Beverly Hills–based Platinum Equity, dutifully paid homage to the dead Republican star, complete with a respectful cartoon by Steve Breen, the paper’s recent Pulitzer Prize winner.
But the paper omitted Kemp’s most colorful local connection: Clifford Graham, who promised riches to those wealthy San Diegans who invested in his scheme to extract gold from sand. Graham, a flashy sort who lived on Bing Crosby’s old estate in Rancho Santa Fe and drove a Rolls-Royce, started a chain of drive-through photo-processing booths in the 1960s called Fotomat, which hired Kemp to do promotions. Graham was forced out of Fotomat in 1971, but he netted a small fortune and quickly had Kemp line up a roster of famous investors for Health Tree, a chain of health-food stores he had started. They included NFL chief Pete Rozelle, ex-astronaut Alan Shepard, and Republican congressman Bob Wilson.
By 1979, Health Tree was bankrupt, but Graham was ready with his gold-making scheme. He set up Au Magnetics in a posh La Jolla business suite and with Kemp’s endorsement began once again to line up gullible investors. In May 1985, with no gold forthcoming and investors in rebellion, he dropped out of sight and has yet to be found. Some suspect foul play.