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Why did Valerie Stallings take the fall for Padres owner John Moores?

The councilwoman pleads guilty

Future ballpark site in East Village - the largest and most uncommon business venture in San Diego history.
Future ballpark site in East Village - the largest and most uncommon business venture in San Diego history.

Valerie Stallings's guilty plea in late January to two state misdemeanors for not reporting gifts from Padres owner John Moores resulted in her resignation from the city council and a $10,000 fine. And yet the revelations of Moores’s four-year gift-bounty to Stallings have some San Diegans in disbelief — fuming, really — as to why Stallings took the fall and Moores was exonerated and why neither was charged with a federal offense after being investigated by the FBI.

Valerie Stallings. Were airline tickets given in 1996 to fly Stallings’s family members to San Diego for her mastectomy, based only on friendship?

From 1996 to 2000, Moores gave — airline tickets, baseball memorabilia, cash, use of car and vacation home, access to a Neon Systems stock IPO, miscellaneous items (the total value of things that remain in her possession has not been reported, though it is estimated at $10,000) — and Stallings received.

“If Moores goes down, the ballpark goes down.”

The U.S. Attorney’s Office concluded, after more than seven months of grand-jury testimony, that Moores’s gifts were not improper: Neither the dollar amount, nor the quantity, nor the time period during which he gave the gifts, nor their timing was improper. The crime occurred because Stallings did not declare the gifts on her yearly Statement of Economic Interest and did not, as the plea states, “disqualify herself from voting on matters materially affecting Moores or the Padres.”

Leslie Girard said that “there was absolutely no knowledge” he was “personally aware of” that anything improper was going on between Moores and Stallings.

As far as what Moores intended these gifts for — this we may never know, since the grand-jury investigation into the relationship between the near two-term councilmember and the real estate developer has been “sealed forever.” Was Moores trying to influence Stallings’s votes in the city council? Were his gifts, such as the airline tickets given in 1996 to fly Stallings’s family members to San Diego for her mastectomy, based only on friendship?

Mel Shapiro sent a letter demanding that Moores and Lucchino register as lobbyists.

But beyond intent, this case is much larger than their guilt or innocence. In California, safeguards against undue influence or unethical gift-giving are either nonexistent, poorly designed, inadequately written, or, what may be worse, carefully crafted with loopholes dangling like slipknots. For one, which local, state, or federal agency should have been investigating Moores and Stallings’s relationship?

William Gore said there was no “evidence that you could walk into court with and say, ‘John Moores gave her this. He expected her to do X-Y-Z for him.’ ”

It is still not clear who — if anyone — was making inquiries before the FBI took the reins. For another, on what grounds was Moores being investigated? Was it bribery? Should Moores, who frequently lobbied other city officials besides Stallings, have registered as a lobbyist and thus reported all his gifts? Was it the ambiguous “exemption clause” in San Diego’s Municipal Lobbying Ordinance that got Moores and Padres CEO Larry Lucchino off the hook?

Bruce Henderson believes Moores’s incessant lobbying of city councilmembers tainted the entire construction contract.

One reliable source said that the FBI began looking into Moores and Stallings’s friendship for possible wrongdoing because no one in the city attorney’s or district attorney’s offices was minding the store. Deputy District Attorney Sally Williams would not confirm this claim but did say that I could infer the following: When her office began investigating complaints in early 2000, she was joined by the FBI, who then took over the inquiry entirely in April 2000 — which meant that, yes, Moores had been under investigation by the D.A. She also said the D.A. was not, prior to April 2000, looking at lobbying violations with regard to John Moores because a lobbying violation would have been handled by the city attorney, not the D.A.

Patrick Shea: “The ballpark project likely would have been interrupted for economic reasons regardless of the [Moores-Stallings] investigation."

According to the city attorney’s office, Moores and Stallings were not under scrutiny before April 2000. On April 6, Matt Potter broke the story of Valerie Stallings’s sweetheart IPO with Neon Systems in the “City Lights” section of the Reader. That was the first City Attorney Casey Gwinn had heard of it. He stated that though he can legally investigate a sitting councilmember, he thought at the time, “to avoid any appearance of impropriety,” he would refer the matter to the state attorney general and the D.A. “Which is what I did.”

Susan Golding and Larry Lucchino, Moores and Lucchino were holding numerous private meetings with then-Mayor Susan Golding.

With Stallings, Gwinn was hamstrung by the lack of investigative tools in his own office. “I don’t have search-warrant authority; and I don’t have subpoena power as the misdemeanor prosecutor for the city. I can’t convene a grand jury to take testimony. So I don’t have the authority of a U.S. Attorney, a district attorney, or an ethics commission.

“If I had intervened,” in the Stallings matter, he continued, “and said, ‘We’re going to conduct this investigation,’ people would have said, ‘Wait a minute. He [Gwinn] is trying to cover up insider trading.’ But I don’t have jurisdiction over insider trading. So I had to say, ‘If the accusation is true that there was insider trading, the U.S. Attorney is going to handle that on behalf of the Securities and Exchange Commission.’ If I had said, ‘We’re going to investigate whether there was a criminal conflict of interest,’ people would have said, ‘He shouldn’t be doing that either because that’s a felony’ — and I don’t have jurisdiction over felonies. There was no way I could have conducted an investigation of Valerie Stallings in a thorough way.”

More to the point is Assistant City Attorney Les Girard’s comment: “We had absolutely no information, knowledge, or indication that there was anything other [than what was] there [between Moores and Stallings]. Absolutely not. I think it would be fair to say that nobody in the city had any idea about the stock offering or anything else” until it was reported on April 6. This was shortly after Stallings first revealed in her Statement of Economic Interest for 1999 that she had profited from the Neon Systems trade. Stallings, Girard said, “never asked anybody in our office about the propriety of that stock offering with regard to John Moores. Normally councilmembers will ask our office about issues like that, and we’re happy to give them advice. She never asked.”

What sounds like a lot of agency buck-passing has legal feet. By charter, the city attorney prosecutes San Diego Municipal Code violations, which are misdemeanors. The district attorney does the same for the county and also prosecutes violations of California law, which includes felonies. Thus, certain crimes against the city, as Girard said, must be “shipped over to the D.A.”

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In the end, it took the suspicions of the U.S. Attorney’s Office to get the probe rolling and to bring in the FBI, once the feds learned of the 1999 Neon Systems IPO from which Stallings benefited some $9400 in one month.

It appears that the FBI focused its lens on Stallings’s failure to disclose Moores’s gifts, instead of — or far more than — the fact that Moores gave them. Taking Stallings’s plea at face value, it’s hard not to conclude that the chasm between the gift-giver and the gift-receiver is as deep as it is wide.

That chasm is wide by law. The responsibility to disclose gifts falls upon the receiver, not the giver. Deputy City Attorney Lisa A. Foster has been in charge of public policy in the city for two years, primarily advising officials on “conflict-of-interest and gift issues.” She said that according to the California Political Reform Act, the 1996 proposition that regulates how public officials must disclose gifts, “We in the city don’t need to direct the donor to do anything.” Anyone can give gifts, even registered lobbyists. Anyone can receive them. It is neither a crime for the giver to give more gifts than the city official is allowed to receive nor a crime for the giver — unless he or she is a registered lobbyist — not to have reported the gift. If the gift exceeds the limit of $320 from one source per year, the city official must, within 30 days of reception, return it, give it away, or pay the giver for it. Unless we’re talking bribery — which we will momentarily — there is no city ordinance against a donor giving too much.

Deepening the divide is the fact that the ordinances which govern gift-giving and gift-receiving have been rewritten in recent years. After the Padres announced, late in 1996, their desire for a new ballpark, and during the time Moores was giving gifts to Stallings and she was not reporting them, the Municipal Advocacy Ordinance was changed in 1998 to the Municipal Lobbying Ordinance. According to Bonnie Stone, elections analyst and lobbyist liaison in the city clerk’s office, the old ordinance was “not helpful to anyone.” The city clerk’s office would send out reminders to lobbyists, who had identified themselves as such, to report. There was, however, no law that required them to disclose anything. Stone said, “We wanted lobbyists to understand what made them a lobbyist. We clarified the language of the ordinance” to insist on quarterly filing, if the lobbyist qualified.

Most important for Stone is that the 1998 lobbying ordinance upholds the right of citizens “to come in and speak to their representatives.” She said no one in the city clerk’s office wanted to create a “chilling effect” on anyone’s access to city officials, in public or private. Most everyone with whom I spoke cited tensions between preserving the rights of the citizen to petition (and do business with) government and demanding more disclosure from officials as to how they are being lobbied.

Preserved from the old ordinance is one clause in particular: Those who seek influence determine for themselves whether or not they are lobbying. Today lobbyists must register only if they are paid more than $2165 per quarter to lobby. Because of this self-policing by lobbyists, it is rare for anyone to be accused of “lobbying without a license.”

Such was the response — or nonresponse — to Moores’s friendship with Stallings. Moores exercised his access to Stallings, and few if any inquired about their conversations. The law protected him: Since a nonregistered lobbyist/giver does not have to disclose gifts, there was no law to restrict Moores from meting out the memorabilia. It was, again, Stallings’s fault for not reporting her gain. In fact, when Moores and Lucchino’s status as unregistered lobbyists was disputed in 1999 by civic watchdog Mel Shapiro, Assistant City Attorney Les Girard sent a memo to the city clerk that spelled out why the Padres bosses were exempt from registering as lobbyists.

Every player in the influence-peddling game (one assumes) is aware of California Penal Code 165: Bribery, in the form of money or favor to government officials, must come with an “intent to corruptly influence” those officials; bribery “is punishable by imprisonment in the state prison for two, three or four years”; and the public official who receives a bribe will “forever be disfranchised and disqualified from holding any public office or trust.” This was not the crime Stallings pled guilty to. But bribery was one of several allegations of criminal misconduct for which Moores was being investigated.

As reported in the Union-Tribune, FBI Special Agent in Charge William Gore said there was no proof that Moores bribed Stallings, no “evidence that you could walk into court with and say, ‘John Moores gave her this. He expected her to do X-Y-Z for him.’ ” But not everyone accepts Gore’s assessment. Many ballpark watchers believe that gifts given by one of San Diego’s wealthiest businessmen to one of the city’s most highly connected politicians were stamped “Return the Favor.” In one instance, as reported by the Union-Tribune, Stallings was, in the summer of 1998, “suspected of tipping off Moores by telephone in the midst of a closed-session meeting.” Stallings retired to the “periphery” of the room to make a phone call. Then-Mayor Susan Golding was alerted, confronted Stallings, and told her to hang up.

Girard said that “there was absolutely no knowledge” he was “personally aware of” that anything improper was going on between Moores and Stallings or Moores and anyone else. Their friendship, as both Gwinn and Girard told me, was “not against the law.”

Why this canyon between what has been reported or verified about Stallings and Moores and the lack of investigation by any agency before 2000? Was there no inquiry because John Moores was the owner of the only baseball team in town? Was there no inquiry because Moores and Lucchino were granted an exemption from registering as lobbyists? Was there no inquiry because the city has inadequate legal and ethical means to protect itself from the monopolistic interests of major-league sports franchises? Was there no inquiry because in the face of such corporate exaction the city had become a house of passive corruption, in which signed deals and crafted regulations have made it easy for the influence of real estate tycoons to flood the council’s chambers?

Pronouncing what is perhaps the most unsubtle explanation to date on the mess in the East Village is Deputy District Attorney Dave Stutz. “If Moores goes down, the ballpark goes down.” Because of that fact, he believes there were too few suspicions followed and too few inquiries made by local investigatory bodies. For Stutz, “the whole thing stinks.”

More conciliatory is Casey Gwinn. “If the Stallings gift-issue teaches us anything,” he said, “it is that you can have attempts at influence that don’t fall within your current statutes and ordinances.”


Into the chasm between gift-giving and gift-receiving swoops San Diego’s tireless fiscal hawk, J. Bruce Henderson. Henderson has for several years now been battling the City of San Diego and John Moores, the owner of the Padres and JMI Realty. JMI Realty is the real estate development and investment arm of JMI Inc., a John Moores company. JMI Realty is the master developer of property (hotels, office space, and retail space) adjacent to the new stadium. Moores’s exclusive right to develop the 26-block site south of Market, which includes the contract to build the ballpark itself, was secured by the Memorandum of Understanding. This is a legal agreement between the Padres, the Centre City Development Corporation, the Port Commission, the City of San Diego, and other entities. The agreement was passed by voters in November 1998, as Proposition C.

According to the San Diego Metropolitan, JMI Realty’s real estate in the ballpark district now exceeds “$600 million in assessed property values, more than doubling the firm’s obligation to the city of San Diego.” While other builders, bankers, and developers are putting up commercial buildings in the East Village, JMI’s slice of the downtown pie continues to grow — office space has risen from 600,000 square feet to 766,000; retail space, from 150,000 to 215,000 square feet; and hotel rooms from 850 to 1237. The more development of the district, the greater the profits for JMI.

In general, Henderson is critical of this exclusive right the city council negotiated with Moores and his companies in redeveloping downtown. In particular, Henderson believes Moores’s incessant lobbying of city councilmembers tainted the entire construction contract and real estate transaction between JMI Realty, the Padres, and the city council before Proposition C was passed.

Henderson, who represents several citizens’ lawsuits against the city, has been tagged by some San Diegans as the bogeyman of city hall. But lately that epithet is being rethought. The Moores-Stallings inquiry brought construction of the ballpark to a halt, not Henderson’s suits. What’s more, Patrick C. Shea, former chairman of the City of San Diego Task Force on Ballpark Planning, wrote recently in the Union-Tribune that “the ballpark project likely would have been interrupted for economic reasons regardless of the [Moores-Stallings] investigation.” On this note, Mayor Murphy has deleted the 1200-room Campbell Shipyard hotel from the once-certain list of ballpark-funding sources. Today it looks as though the Campbell hotel will not get built anytime soon and, thus, cannot pony up its share of the debt service. With none of Henderson’s seed, the little cloud over financing has become a thunderhead, casting a pall on the rebar-sprouting pillars of the stalled stadium.

In mid-February Henderson filed a Second Amended Complaint of his lawsuit against the City of San Diego. The amended complaint includes details of the gift-rich relationship Moores fostered with Stallings. In the suit’s revision, Henderson, who represents plaintiffs Bruce Skane and Jerry Mailhot in this complaint, alleges that Stallings and Moores conspired to mislead the people. The “Gift-by-Command Conspiracy,” as the complaint describes it, began in 1996. Stallings was “commanded” not to report the gifts Moores gave her and to use her “bought-and-paid-for” influence with other city officials to curry favor for the ballpark. But the chief deception is that the voters of San Diego were not fully informed of Moores and Stallings’s relationship. Had they been, according to Henderson, “they would have considered that information important” in voting on Prop C. Therefore, he argues, the vote on the agreement is “a nullity.” The vote is voidable, for undue influence existed at the heart of its formation.

Henderson says the plea has given him and the people the smoking gun. In prepping for his day in court, he squares the opposing sides like this: On one side, the city says, “ ‘Sure, Stallings has disclosed this relationship. And we’ve revoted’ ” — which the council did on March 7 — “ ‘so everything’s now OK, after we learned about it.’ ” To which Henderson will counter, “What about the people? This relationship that caused you to revote goes back prior to the vote of November 1998. If you got to revote, well, why don’t the voters of the City of San Diego get to have a fully informed vote?” He believes the city doesn’t want the voters to vote again because they might not approve the $453 million project. With Ralph Inzunza in District 8 voting yes and (perhaps) the newest councilmember in District 6 agreeing, the ballpark project will once again be affirmed at 9 to 0. But, Henderson asks, when do the people get their say?

Henderson has problems with the U.S. Attorney’s exonerating Moores. “He had limited his investigation to the question of whether or not John Moores had violated any laws by giving gifts. He didn’t look at the lobbying law; he obviously assumed that John Moores was not a lobbyist. He just looked at the question, is it a violation of law for a donor to give gifts in excess of the limit under the Political Reform Act?” That limit is set each year; this year it is $320. “By a very peculiar anomaly of Prop 208” — which is the Political Reform Act — “it’s not a crime. It was supposed to be a crime, but it’s not a crime. The U.S. Attorney put these gigantic blinders on. There is one thing we know isn’t a crime in California, and that’s for a donor to make a gift in excess of the limit, so let’s not look at anything regarding John Moores. Then we can stand up and say, ‘There’s absolutely no evidence that Moores violated the law.’ ”

Henderson alleges that a “pattern” of Moores’s gift-giving to Stallings began in 1995 or 1996, when Stallings voted against the Chargers ticket guarantee, the only no vote on the council at the time. He believes that because Moores wanted “unanimity” and she was the “one problem, they came to her and started giving her gifts.” At this time, Henderson says, neither Stallings nor anyone else knew about the ballpark project. It wasn’t until November 1996 that the city manager alerted some that the Padres wanted out of Qualcomm. Henderson thinks that no one on the council, including Stallings, knew that the Padres wanted new digs downtown until 1997.

Once the gift-giving has begun, Henderson asks, “What does John Moores know and what does Valerie Stallings know — now that she’s accepted this gift in April of 1996 — that I didn’t know, that you didn’t know, that nobody else but John Moores, Valerie Stallings, and her mother knew?” Henderson’s answer is, “That Valerie Stallings was a criminal. You see, John Moores suddenly had power over her. He could look her right in the eye and say, ‘You know, it’s not a crime for me to give you a gift in excess of $250’ — the amount at that time — ‘but it’s a crime for you to have received it. And, by the way, if you report it, you’ll be admitting to a crime. And you might be prosecuted and removed from office.’ ”

Do you think he actually told her that?

“Think about it. How do you know? What’s going through his head? After that first gift, Valerie Stallings and John Moores are in a very different relationship. Because Stallings knows that if he doesn’t keep his mouth shut, she could go to prison. Because she has violated the law. Willfully. She doesn’t know what’s going to happen to her. All she knows is that he knows and nobody else knows and if she screws around with him, he can make it public. He doesn’t get hurt; she does. What kind of control does that create?”

As a former councilmember, Henderson says disclosing gifts is “drummed into your head — you have to be extremely careful about gifts. Valerie Stallings started filing financial disclosure statements in 1991. She knew. She knew it was a crime to go over the limit. What’s the likelihood that John Moores didn’t know that?”


Mel Shapiro has made a number of requests to the city clerk’s office about people he has suspected of “lobbying without a license,” a pursuit that, he says, rarely takes place in city hall offices. Private, influential conversations occur in other venues — La Jolla restaurants, golf courses, skyboxes at Chargers and Padres games. One person Shapiro complained about was Mark Nelson, who was lobbying for sdg&e (he is now the director of local government affairs for Sempra Energy). After receiving the standard “friendly” letter from the city clerk, Nelson agreed to register. Another occasion occurred during 1998 and 1999 when competitive bids were being made on the Naval Training Center. Based on news reports he had read, Shapiro wondered whether Corky McMillin of the Corky McMillin Companies wasn’t “unduly” lobbying and shouldn’t register. Shapiro complained to City Clerk Charles Abdelnour, and he sent the friendly letter. The letter advises an individual or a company that “you may be required to register as a lobbyist with the City of San Diego” or “provide evidence that you are exempt from the…requirements.”

The McMillin Companies responded in a letter dated July 7, 1999, that “no employee had contacts with city officials entitling the individual to $2000 or more in quarterly compensation.” They stated their review “excluded contacts with city officials that fell within the exception set forth in §27.4004(c) of the ordinance.” That part exempts the person “whose sole activity” includes the proposal process, the bid process, and the negotiating process after a bid is won.

What exactly does “sole activity” mean? Les Girard says that he interpreted that phrase to mean “the sole activity as the subject of the meeting. In other words, if John Moores and Larry Lucchino were meeting with the mayor solely for the purpose of the Memorandum of Understanding and its implementing agreement, then that qualified as an exception.” So long as Moores and Lucchino weren’t discussing some other business during the same meeting, they were exempt from having to register as lobbyists. (One wonders how anyone might know what passed between a city official and a citizen, an unwieldy problem when trying to hold people accountable under the lobbying ordinance.)

Shapiro sees “sole activity” differently. He doubts that any company has a person whose sole activity it is only to submit a bid, only to make oral requests for proposals, only to negotiate an agreement with the city after the city has awarded a contract. Does it mean that on any city project a bidder can bypass lobbying restrictions if he employs a person whose sole activity is that project? The confusion mounts. What about the in-house lobbyists, CEOs, and other high-placed company employees, whose job it is to influence city officials on behalf of a contract and yet whose job of influencing is not their sole activity?

The exemption, in other words, is a way for a person to exert influence, as long as he can claim he is part of a competitively bid contract.

The other problem is the compensation of in-house lobbyists. The salaries of Corky McMillin, John Moores, and Larry Lucchino are generally guarded secrets. (A recent estimate of John Moores’s wealth is down to a NASDAQ-decimated $190 million from the near $600 million of only two years ago.) Surely, if these three men were in-house lobbyists for their ventures, a few phone calls, a few lunches, a few closed-door meetings would amount as salary to much more than the then-current $2000 per quarter in compensation. Would anyone dispute that in a bid for the Naval Training Center contract, McMillin would not have reached that threshold easily? Would anyone dispute that in order to sweeten a deal for a downtown ballpark and real estate development, Moores or Lucchino wouldn’t have reached that threshold just as easily?

The notion of an exemption based on someone’s “sole activity” is, for many, as indefensible as it is unenforceable. Of course business owners and CEOs lobby city officials for their contracts. Of course they earn millions in salaries. Of course such lobbying is not their “sole activity.” And yet no one in the city I spoke with called the lobbying ordinance’s exemption clause a loophole. Casey Gwinn did stress that John Moores has no permanent exemption. In the future, other projects may require him to register.

By spring 1999, Mel Shapiro had read in the Union-Tribune that Moores and Lucchino were holding numerous private meetings with then-Mayor Susan Golding. What also buzzed Shapiro’s antennae was one of the “what if” scenarios published by the city clerk’s office in its booklet on lobbying, written to publicize the revised ordinance.

I’m the CEO of my company, which employs a full-time lobbyist. She is registered with the City. This month we’ve both been meeting with City staff to discuss a major project we’re developing. I also spent some time working with her on a presentation she gave at a committee hearing, then sat in on that hearing while she spoke. Am I a lobbyist?

The test is whether you received the threshold compensation for these activities, each of which is an integral part of influencing a municipal decision. Although your main job at your company is not as a “lobbyist,” you are performing some of a lobbyist’s functions. If your compensation for your “lobby-like” activities reaches the threshold, then you are required to register.

To Shapiro’s amazement, this scenario fit Moores’s and Lucchino’s activities like a glove. Bruce Henderson, representing Shapiro, sent a letter to Abdelnour demanding that Moores and Lucchino register. In response, Abdelnour’s office sent two requests. One went to the city attorney to get an interpretation of the exemption clause for lobbyists. Because the city clerk’s office has no on-staff counsel, Abdelnour and Deputy Director Joyce Lane sought clarification of the language by the city attorney, who wrote the ordinance. Lane said that the language of the old ordinance was written so badly that “you had to pay an attorney to interpret it.” Apparently even in the new version the exemption clause was not clear. The other request from Abdelnour’s office went directly to Moores and Lucchino, advising them that they “may need to register.”

Representing the Padres at this time was Curtis Michael Fitzpatrick, who passed away last year. Fitzpatrick, in the city attorney’s office for more than 20 years and once the right-hand man of City Attorney John Witt, wrote that the lobbying ordinance requires all people be held to the same standard. To single out Moores and Lucchino as exceptions to the exemption is a denial of their right to equal protection under the law. In this respect, Fitzpatrick suggested that the lobbying ordinance itself may be “constitutionally defective.” He also wrote, “At the very time the Ordinance was being considered by the City Council (May 1998)” — roughly the time the old ordinance was undergoing a major makeover — “my clients were meeting with the city’s negotiating team for the sole purpose of negotiating the terms of a written agreement with the City.”

Fitzpatrick ends his letter by referring the city clerk to the city attorney’s ruling. That memo was written by Les Girard, who recently explained it to me. “The intent of the lobbying ordinance,” he said, “was to exempt from registration principals and an entity that the city council has selected to negotiate a specific contract.” The interpretation of the ordinance’s exemption clause is based on the idea of a “sole source,” that is, a source that has no competition. The Memorandum of Understanding (MOU) gave that sole source its direction: “Here, San Diego, you go negotiate with the only baseball team in town on a new ballpark.” Girard said also that the ordinance seeks disclosure from those with no name recognition who lobby city hall for a living. “It didn’t seem to be the intent of the ordinance to require somebody like John Moores or Larry Lucchino to register as lobbyists, because everybody knows who they are and everybody knows what they’re after.”

I asked Girard if his memo in any sense grandfathered in Moores’s and Lucchino’s lobbying efforts with city officials before the Task Force on Ballpark Planning began holding its meetings in late 1997.

“I’m not prepared to comment on that,” he said, “because the issue that was presented to us was specifically meetings following the adopting of the [city council] resolution in February 1998. We were not asked to opine on any requirement to register as lobbyists regarding meetings to lobbying for anything prior to that time.” Girard said he didn’t know of any meetings between Moores and Lucchino and politicians prior to February 1998.

What about the fact that we now know Moores was giving Stallings’s family members airline tickets in April 1996, at the time of her cancer treatments? Was Moores “lobbying without a license” then?

“There’s nothing that requires a person to register as a lobbyist,” Girard said, “merely because they have contact with a public official on a friendly basis.” He noted that he didn’t know whether Moores and Lucchino would have been required to register as lobbyists back in 1996, “had we known X, Y, or Z. I don’t know all the facts behind the meetings. And the fact that gifts were given doesn’t necessarily mean there were meetings. I don’t know if there were meetings and I don’t know what the subjects of those meetings were.”

Girard admitted suggesting that he and the city clerk “modify the lobbying ordinance in light of the situation that arose at the time I did that memo” in May 1999. He believes that the language was not clear then and that reasonable people can have different interpretations of these ordinances, no matter who crafts them. “I would agree that you can read that language and have questions about its applicability.” As examples, he cites two changes. One was this expanded definition: “ ‘In-House Lobbyist’ includes, but is not limited to, owners, officers, and salaried employees of a business.” This language was added as a way to declare owners and high-level businessmen like Moores and Lucchino as potential lobbyists. The other change came in part of the exemption clause. The phrase “by other means of selection recognized by law” was added to “clarify the idea of ‘sole source.’ ”

Was the downtown ballpark a competitively bid contract? (I wanted to put this and other questions to Padres officials, but phone calls were not returned.)

Girard said no. San Diego made the Padres an “agent of the city,” licensed the team, in effect, to conduct the city’s business, which includes granting them the power to competitively bid contracts. “The city was directed,” Girard says, “to negotiate with the Padres for the purpose of the MOU.” (One wonders by whom the “city was directed.”) Girard noted that it wasn’t the city who was responsible for finding the best bids on building the ballpark “because in terms of the MOU, the Padres are responsible for getting the construction contracts.”

The downtown ballpark and its surrounding real estate development was from the get-go outside any bid process with the city. This project is not only the largest and most uncommon business venture in San Diego history, its owner and CEO have also been given an unprecedented exemption to some of the city’s laws. Can it be any more obvious that Moores and Lucchino’s influence upon city officials has been matched by the blessing of singularity and the exemption of law?


Can lobbying be better policed? Should all lobbying be subject to the same reporting rules, whether or not it is a “sole source” contract or part of a competitively bid process? Should gift-giving be in the same class as gift-receiving in the post-Stallings era?

The first difficulty is how to police private meetings. Bonnie Stone states that the city relies “to a large degree” in identifying lobbyists on an “honor system. We believe people, in the vast majority, are honest and attempt to be honest.” However, the kind of lobbying she said the city is looking to oversee “is when it’s just you and me meeting and there’s not a paper document [of the meeting] for a paper trail.” This means a huddle between citizen and city official remains private, chinked, and caulked tight. Perhaps as it should be. To invade such hidden spaces would require a politburo and a kgb, plus an army of apparatchiks to record and monitor what is said.

Yet what else but a “lack of oversight” befell Moores and Lucchino when their lobbying of the city was given carte blanche. When “there’s not a paper document” between a donor and a public official, the door to abusing that “honor system” is pushed wide open. Moreover, with no restriction on the “exempted lobbyist,” the tendency for many people is not to question his activities. What’s more, some are jealous that the law gives a select few the right to do precisely what the rest of us couldn’t do — lobby without a license in plain sight. Like access to an IPO, such exclusivity for some is the whole point.

Head Deputy City Attorney William Newsome, in charge of the Consumer Fraud Unit from 1985 to January 1999, used to investigate “integrity issues” with regard to city officials. He says that “unlawful or criminal” lobbying in which private contact (e-mail, phone calls, letters, closed-door confabs) occurs is “by its very nature [something that] may go undetected.” Where are the police to monitor that exchange? “The person who did it is not going to run and confess” what he’s just done, “and the elected official has no idea” if the person was or was not a lobbyist. The elected official may not know a particular “unlawful” lobbyist is the “hired gun” of some company. Newsome says that city officials neither ask nor are they required to ask of a person they are about to talk with, “Are you or are you not a registered lobbyist?” No one “walks through a metal detector” whose sirens would flash and wail a bad apple from the otherwise good bunch. Newsome believes that there’s little chance “somebody outside that entire equation” of the private conversation might suspect something and send out the bloodhounds.

(I had hoped to interview Councilmembers George Stevens and Byron Wear, whose tenure on the council has no doubt included such private contact with registered and unregistered lobbyists. Calls to both were unreturned.)

Bruce Henderson is writing a letter to U.S. Attorney General John Ashcroft asking that the Moores-Stallings investigation be reopened. What sticks in Henderson’s craw is not Valerie Stallings’s guilt but the pattern of “escalation” of Moores’s giving that didn’t stop until the FBI investigation began in April 2000. Henderson says that if one did a graph, from 1996 through Stallings’s purchase and sale of the Neon Systems stock in 1999, “You can see a fairly dramatic escalation from a few thousand up to $10,000 that she benefited. You see this escalation of gifts, but now say you add in the memorabilia.” The Stallings plea identifies memorabilia, but the fbi investigation fails to assign any value to those gifts. For example, we know the value of the holder display ($240) that supports five baseballs signed by the 1996 Padres team, the Western Division champs. But what is the value of the baseballs alone or of the whole display together, especially since it is one of only 50 made?

About this pattern of gifts, Michael Aguirre agrees with Henderson. Aguirre, who ran unsuccessfully for city council more than a decade ago and is a former prosecutor in the D.A.’s office, says that if he presented this pattern to a jury, the escalation of gifts would be for Moores’s attorneys “much more difficult to defend than the isolated stock transaction.” To instruct a jury to draw inferences based on this trail of gifts, Aguirre says, would make their relationship “more significant.” More critical than any undisclosed value of the baseball memorabilia Stallings received is the repetition of gifts and their context. “Once you’re talking about credit-card usage, flying family members around, that’s more in the nature of graft.” Graft is to use one’s position to get an advantage over another; bribery involves payment of money or property for that advantage. “It’s legally unacceptable,” Aguirre continues, “to be giving gifts to elected officials when they are considering a public bestowment upon a gift-giver at the same time. It’s not something that we should permit, period.” In a sense, Stallings was grafted on to Moores’s lifestyle. “She was like a member of his club,” Aguirre says. “Her currency wasn’t money, it was power. And in John Moores’s market, money or power has currency.”

When Aguirre ran for the city council, he says, he wanted to be open to the interests of businesspeople or developers. But he learned that by sending out the message of being “fiscally responsible” for large capital projects, he felt “the ‘system in place’ said, ‘We don’t want that type of person’ ” on the council. In essence, he believes, “The system protects undue influence; it doesn’t protect against undue influence. That’s the reality of the system we operate under.”

How does Aguirre explain the John Moores exemption?

Politics. “We live in a society in which the law has been politicized, particularly at the law-enforcement level, and particularly in the district attorney’s office: The district attorney and the city attorney have become political figures. There’s nothing wrong with wanting to be ambitious. But when you decide to use the prosecutorial power of the office in terms of how it’s going to make you look politically,” then, Aguirre says, a lot doesn’t get investigated or prosecuted.

For Aguirre, it seems the city’s enforcement division “permits everything up to the brink of bribery.” He wants prosecutors and legislators to protect us from undue influence. As a case in point, Aguirre cites the restructured financing plan in which taxes from the proposed 1200-room Campbell Shipyard hotel were taken off the table. Aguirre calls the original hotel plan “bogus. What was the basis of the decision two years ago when Valerie and the others made their decision that it was going to be built on time? That’s where you have to ask, ‘Was there undue influence?’ ”

Aguirre doubts anyone is asking on what grounds city councilmembers made the decision that the hotel would get built on time. They didn’t question the hotel’s financing in negotiating the Memorandum of Understanding. Instead, “It was a factual determination about whether there were reasonable assurances to believe the hotel would be built and produce income. That’s a subtle point in some ways. But it’s not so subtle when you consider the fact that without that determination the ballpark could not have proceeded.”

The Campbell hotel was expected to fund 25 percent of the city’s annual debt service on the ballpark bonds. Now that this funding source is gone, Aguirre says trouble may lie ahead. With the city paying more up front for the Padres stadium, a new Mayday is being signaled: How much of a role will undue influence play from now on, since the city council’s five new members are committed to the ballpark?

A further problem has been identified by Peter Navarro, a candidate for Valerie Stallings’s seat in this month’s District 6 election. He’s pushing a “Fair Deal” proposal to jump-start ballpark construction. This would require several steps, among them negotiating with Bruce Henderson not to put the project to a citywide vote again, where it would no doubt fail. Navarro believes Murphy’s latest funding bid is a violation of the MOU. Murphy’s plan calls for the Centre City Development Corporation to shell out $24 million more than its already guaranteed $50 million and for the city to put in $30 million of its own money. These moves would violate a provision in the MOU that requires a new vote if the financial commitments of the city are increased. Apparently Murphy’s proposal does just that. Without Navarro’s plan or some other restructuring, it looks like fresh lawsuits, dead ahead.

One way to limit the influence of unregulated gift-givers in San Diego may be Mayor Murphy’s proposed Ethics Commission. Because of the recondite behavior of a few lobbyists, perhaps only an ethics commission can oversee and restrict their conduct. There is uncertainty, though, as to how far under California law a local ethics commission could fine and suspend people it finds guilty of violating ordinances. Casey Gwinn will introduce a charter amendment for subpoena power on the March 2002 ballot. This, he says, “will allow the Ethics Commission to subpoena any percipient witness, and that would include someone who says, ‘I’m not under your jurisdiction.’ ” Like exempted lobbyists? “Absolutely.” Gwinn hopes that by budgeting the Ethics Commission with funds from his Public Integrity Unit and by convincing voters to alter the charter, the commission will have far more power to investigate and charge wrongdoers. He says the city needs a “citizen-led group” to take on this responsibility, to be “a conscience and an advocate for changes in the law.”

Michael Aguirre believes that an ethical approach to city government will begin when the city adopts an iron-clad policy for the giver. “If you are caught giving gifts or trying to unduly influence the city, the consequences are — we’re not going to do business with you. You don’t have to have a criminal sanction.” In effect, you’re fired.

Aguirre says the overdonor could be suspended from doing business with the city for a year. “Deterrence,” he notes, “works with people who have money and who are sensible. In the long haul, it would have been better for the Padres to not have had such influence. Honesty is always the best policy. Look what happened to John Moores. Compare the benefit of what he got — by giving Valerie the gifts — against the burden and the costs. No project for all those months. Those of us who do support the ballpark and a fair funding for it, how have we been served by all this gift-giving and all that lobbying? We haven’t.”

n’t.”

With some longing in his voice, Aguirre says, “I happen to like John Moores. I’m disappointed because I feel he took advantage of a lot of people who trusted him. He let us down and has never apologized. Which I’m personally offended by. A lot of us put our reputations on the line to support what he was trying to do, and, in part, that turned out to lack credibility. I have no hostile feelings toward him. But it’s a tragedy what happened. For him and for Valerie.”

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Future ballpark site in East Village - the largest and most uncommon business venture in San Diego history.
Future ballpark site in East Village - the largest and most uncommon business venture in San Diego history.

Valerie Stallings's guilty plea in late January to two state misdemeanors for not reporting gifts from Padres owner John Moores resulted in her resignation from the city council and a $10,000 fine. And yet the revelations of Moores’s four-year gift-bounty to Stallings have some San Diegans in disbelief — fuming, really — as to why Stallings took the fall and Moores was exonerated and why neither was charged with a federal offense after being investigated by the FBI.

Valerie Stallings. Were airline tickets given in 1996 to fly Stallings’s family members to San Diego for her mastectomy, based only on friendship?

From 1996 to 2000, Moores gave — airline tickets, baseball memorabilia, cash, use of car and vacation home, access to a Neon Systems stock IPO, miscellaneous items (the total value of things that remain in her possession has not been reported, though it is estimated at $10,000) — and Stallings received.

“If Moores goes down, the ballpark goes down.”

The U.S. Attorney’s Office concluded, after more than seven months of grand-jury testimony, that Moores’s gifts were not improper: Neither the dollar amount, nor the quantity, nor the time period during which he gave the gifts, nor their timing was improper. The crime occurred because Stallings did not declare the gifts on her yearly Statement of Economic Interest and did not, as the plea states, “disqualify herself from voting on matters materially affecting Moores or the Padres.”

Leslie Girard said that “there was absolutely no knowledge” he was “personally aware of” that anything improper was going on between Moores and Stallings.

As far as what Moores intended these gifts for — this we may never know, since the grand-jury investigation into the relationship between the near two-term councilmember and the real estate developer has been “sealed forever.” Was Moores trying to influence Stallings’s votes in the city council? Were his gifts, such as the airline tickets given in 1996 to fly Stallings’s family members to San Diego for her mastectomy, based only on friendship?

Mel Shapiro sent a letter demanding that Moores and Lucchino register as lobbyists.

But beyond intent, this case is much larger than their guilt or innocence. In California, safeguards against undue influence or unethical gift-giving are either nonexistent, poorly designed, inadequately written, or, what may be worse, carefully crafted with loopholes dangling like slipknots. For one, which local, state, or federal agency should have been investigating Moores and Stallings’s relationship?

William Gore said there was no “evidence that you could walk into court with and say, ‘John Moores gave her this. He expected her to do X-Y-Z for him.’ ”

It is still not clear who — if anyone — was making inquiries before the FBI took the reins. For another, on what grounds was Moores being investigated? Was it bribery? Should Moores, who frequently lobbied other city officials besides Stallings, have registered as a lobbyist and thus reported all his gifts? Was it the ambiguous “exemption clause” in San Diego’s Municipal Lobbying Ordinance that got Moores and Padres CEO Larry Lucchino off the hook?

Bruce Henderson believes Moores’s incessant lobbying of city councilmembers tainted the entire construction contract.

One reliable source said that the FBI began looking into Moores and Stallings’s friendship for possible wrongdoing because no one in the city attorney’s or district attorney’s offices was minding the store. Deputy District Attorney Sally Williams would not confirm this claim but did say that I could infer the following: When her office began investigating complaints in early 2000, she was joined by the FBI, who then took over the inquiry entirely in April 2000 — which meant that, yes, Moores had been under investigation by the D.A. She also said the D.A. was not, prior to April 2000, looking at lobbying violations with regard to John Moores because a lobbying violation would have been handled by the city attorney, not the D.A.

Patrick Shea: “The ballpark project likely would have been interrupted for economic reasons regardless of the [Moores-Stallings] investigation."

According to the city attorney’s office, Moores and Stallings were not under scrutiny before April 2000. On April 6, Matt Potter broke the story of Valerie Stallings’s sweetheart IPO with Neon Systems in the “City Lights” section of the Reader. That was the first City Attorney Casey Gwinn had heard of it. He stated that though he can legally investigate a sitting councilmember, he thought at the time, “to avoid any appearance of impropriety,” he would refer the matter to the state attorney general and the D.A. “Which is what I did.”

Susan Golding and Larry Lucchino, Moores and Lucchino were holding numerous private meetings with then-Mayor Susan Golding.

With Stallings, Gwinn was hamstrung by the lack of investigative tools in his own office. “I don’t have search-warrant authority; and I don’t have subpoena power as the misdemeanor prosecutor for the city. I can’t convene a grand jury to take testimony. So I don’t have the authority of a U.S. Attorney, a district attorney, or an ethics commission.

“If I had intervened,” in the Stallings matter, he continued, “and said, ‘We’re going to conduct this investigation,’ people would have said, ‘Wait a minute. He [Gwinn] is trying to cover up insider trading.’ But I don’t have jurisdiction over insider trading. So I had to say, ‘If the accusation is true that there was insider trading, the U.S. Attorney is going to handle that on behalf of the Securities and Exchange Commission.’ If I had said, ‘We’re going to investigate whether there was a criminal conflict of interest,’ people would have said, ‘He shouldn’t be doing that either because that’s a felony’ — and I don’t have jurisdiction over felonies. There was no way I could have conducted an investigation of Valerie Stallings in a thorough way.”

More to the point is Assistant City Attorney Les Girard’s comment: “We had absolutely no information, knowledge, or indication that there was anything other [than what was] there [between Moores and Stallings]. Absolutely not. I think it would be fair to say that nobody in the city had any idea about the stock offering or anything else” until it was reported on April 6. This was shortly after Stallings first revealed in her Statement of Economic Interest for 1999 that she had profited from the Neon Systems trade. Stallings, Girard said, “never asked anybody in our office about the propriety of that stock offering with regard to John Moores. Normally councilmembers will ask our office about issues like that, and we’re happy to give them advice. She never asked.”

What sounds like a lot of agency buck-passing has legal feet. By charter, the city attorney prosecutes San Diego Municipal Code violations, which are misdemeanors. The district attorney does the same for the county and also prosecutes violations of California law, which includes felonies. Thus, certain crimes against the city, as Girard said, must be “shipped over to the D.A.”

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In the end, it took the suspicions of the U.S. Attorney’s Office to get the probe rolling and to bring in the FBI, once the feds learned of the 1999 Neon Systems IPO from which Stallings benefited some $9400 in one month.

It appears that the FBI focused its lens on Stallings’s failure to disclose Moores’s gifts, instead of — or far more than — the fact that Moores gave them. Taking Stallings’s plea at face value, it’s hard not to conclude that the chasm between the gift-giver and the gift-receiver is as deep as it is wide.

That chasm is wide by law. The responsibility to disclose gifts falls upon the receiver, not the giver. Deputy City Attorney Lisa A. Foster has been in charge of public policy in the city for two years, primarily advising officials on “conflict-of-interest and gift issues.” She said that according to the California Political Reform Act, the 1996 proposition that regulates how public officials must disclose gifts, “We in the city don’t need to direct the donor to do anything.” Anyone can give gifts, even registered lobbyists. Anyone can receive them. It is neither a crime for the giver to give more gifts than the city official is allowed to receive nor a crime for the giver — unless he or she is a registered lobbyist — not to have reported the gift. If the gift exceeds the limit of $320 from one source per year, the city official must, within 30 days of reception, return it, give it away, or pay the giver for it. Unless we’re talking bribery — which we will momentarily — there is no city ordinance against a donor giving too much.

Deepening the divide is the fact that the ordinances which govern gift-giving and gift-receiving have been rewritten in recent years. After the Padres announced, late in 1996, their desire for a new ballpark, and during the time Moores was giving gifts to Stallings and she was not reporting them, the Municipal Advocacy Ordinance was changed in 1998 to the Municipal Lobbying Ordinance. According to Bonnie Stone, elections analyst and lobbyist liaison in the city clerk’s office, the old ordinance was “not helpful to anyone.” The city clerk’s office would send out reminders to lobbyists, who had identified themselves as such, to report. There was, however, no law that required them to disclose anything. Stone said, “We wanted lobbyists to understand what made them a lobbyist. We clarified the language of the ordinance” to insist on quarterly filing, if the lobbyist qualified.

Most important for Stone is that the 1998 lobbying ordinance upholds the right of citizens “to come in and speak to their representatives.” She said no one in the city clerk’s office wanted to create a “chilling effect” on anyone’s access to city officials, in public or private. Most everyone with whom I spoke cited tensions between preserving the rights of the citizen to petition (and do business with) government and demanding more disclosure from officials as to how they are being lobbied.

Preserved from the old ordinance is one clause in particular: Those who seek influence determine for themselves whether or not they are lobbying. Today lobbyists must register only if they are paid more than $2165 per quarter to lobby. Because of this self-policing by lobbyists, it is rare for anyone to be accused of “lobbying without a license.”

Such was the response — or nonresponse — to Moores’s friendship with Stallings. Moores exercised his access to Stallings, and few if any inquired about their conversations. The law protected him: Since a nonregistered lobbyist/giver does not have to disclose gifts, there was no law to restrict Moores from meting out the memorabilia. It was, again, Stallings’s fault for not reporting her gain. In fact, when Moores and Lucchino’s status as unregistered lobbyists was disputed in 1999 by civic watchdog Mel Shapiro, Assistant City Attorney Les Girard sent a memo to the city clerk that spelled out why the Padres bosses were exempt from registering as lobbyists.

Every player in the influence-peddling game (one assumes) is aware of California Penal Code 165: Bribery, in the form of money or favor to government officials, must come with an “intent to corruptly influence” those officials; bribery “is punishable by imprisonment in the state prison for two, three or four years”; and the public official who receives a bribe will “forever be disfranchised and disqualified from holding any public office or trust.” This was not the crime Stallings pled guilty to. But bribery was one of several allegations of criminal misconduct for which Moores was being investigated.

As reported in the Union-Tribune, FBI Special Agent in Charge William Gore said there was no proof that Moores bribed Stallings, no “evidence that you could walk into court with and say, ‘John Moores gave her this. He expected her to do X-Y-Z for him.’ ” But not everyone accepts Gore’s assessment. Many ballpark watchers believe that gifts given by one of San Diego’s wealthiest businessmen to one of the city’s most highly connected politicians were stamped “Return the Favor.” In one instance, as reported by the Union-Tribune, Stallings was, in the summer of 1998, “suspected of tipping off Moores by telephone in the midst of a closed-session meeting.” Stallings retired to the “periphery” of the room to make a phone call. Then-Mayor Susan Golding was alerted, confronted Stallings, and told her to hang up.

Girard said that “there was absolutely no knowledge” he was “personally aware of” that anything improper was going on between Moores and Stallings or Moores and anyone else. Their friendship, as both Gwinn and Girard told me, was “not against the law.”

Why this canyon between what has been reported or verified about Stallings and Moores and the lack of investigation by any agency before 2000? Was there no inquiry because John Moores was the owner of the only baseball team in town? Was there no inquiry because Moores and Lucchino were granted an exemption from registering as lobbyists? Was there no inquiry because the city has inadequate legal and ethical means to protect itself from the monopolistic interests of major-league sports franchises? Was there no inquiry because in the face of such corporate exaction the city had become a house of passive corruption, in which signed deals and crafted regulations have made it easy for the influence of real estate tycoons to flood the council’s chambers?

Pronouncing what is perhaps the most unsubtle explanation to date on the mess in the East Village is Deputy District Attorney Dave Stutz. “If Moores goes down, the ballpark goes down.” Because of that fact, he believes there were too few suspicions followed and too few inquiries made by local investigatory bodies. For Stutz, “the whole thing stinks.”

More conciliatory is Casey Gwinn. “If the Stallings gift-issue teaches us anything,” he said, “it is that you can have attempts at influence that don’t fall within your current statutes and ordinances.”


Into the chasm between gift-giving and gift-receiving swoops San Diego’s tireless fiscal hawk, J. Bruce Henderson. Henderson has for several years now been battling the City of San Diego and John Moores, the owner of the Padres and JMI Realty. JMI Realty is the real estate development and investment arm of JMI Inc., a John Moores company. JMI Realty is the master developer of property (hotels, office space, and retail space) adjacent to the new stadium. Moores’s exclusive right to develop the 26-block site south of Market, which includes the contract to build the ballpark itself, was secured by the Memorandum of Understanding. This is a legal agreement between the Padres, the Centre City Development Corporation, the Port Commission, the City of San Diego, and other entities. The agreement was passed by voters in November 1998, as Proposition C.

According to the San Diego Metropolitan, JMI Realty’s real estate in the ballpark district now exceeds “$600 million in assessed property values, more than doubling the firm’s obligation to the city of San Diego.” While other builders, bankers, and developers are putting up commercial buildings in the East Village, JMI’s slice of the downtown pie continues to grow — office space has risen from 600,000 square feet to 766,000; retail space, from 150,000 to 215,000 square feet; and hotel rooms from 850 to 1237. The more development of the district, the greater the profits for JMI.

In general, Henderson is critical of this exclusive right the city council negotiated with Moores and his companies in redeveloping downtown. In particular, Henderson believes Moores’s incessant lobbying of city councilmembers tainted the entire construction contract and real estate transaction between JMI Realty, the Padres, and the city council before Proposition C was passed.

Henderson, who represents several citizens’ lawsuits against the city, has been tagged by some San Diegans as the bogeyman of city hall. But lately that epithet is being rethought. The Moores-Stallings inquiry brought construction of the ballpark to a halt, not Henderson’s suits. What’s more, Patrick C. Shea, former chairman of the City of San Diego Task Force on Ballpark Planning, wrote recently in the Union-Tribune that “the ballpark project likely would have been interrupted for economic reasons regardless of the [Moores-Stallings] investigation.” On this note, Mayor Murphy has deleted the 1200-room Campbell Shipyard hotel from the once-certain list of ballpark-funding sources. Today it looks as though the Campbell hotel will not get built anytime soon and, thus, cannot pony up its share of the debt service. With none of Henderson’s seed, the little cloud over financing has become a thunderhead, casting a pall on the rebar-sprouting pillars of the stalled stadium.

In mid-February Henderson filed a Second Amended Complaint of his lawsuit against the City of San Diego. The amended complaint includes details of the gift-rich relationship Moores fostered with Stallings. In the suit’s revision, Henderson, who represents plaintiffs Bruce Skane and Jerry Mailhot in this complaint, alleges that Stallings and Moores conspired to mislead the people. The “Gift-by-Command Conspiracy,” as the complaint describes it, began in 1996. Stallings was “commanded” not to report the gifts Moores gave her and to use her “bought-and-paid-for” influence with other city officials to curry favor for the ballpark. But the chief deception is that the voters of San Diego were not fully informed of Moores and Stallings’s relationship. Had they been, according to Henderson, “they would have considered that information important” in voting on Prop C. Therefore, he argues, the vote on the agreement is “a nullity.” The vote is voidable, for undue influence existed at the heart of its formation.

Henderson says the plea has given him and the people the smoking gun. In prepping for his day in court, he squares the opposing sides like this: On one side, the city says, “ ‘Sure, Stallings has disclosed this relationship. And we’ve revoted’ ” — which the council did on March 7 — “ ‘so everything’s now OK, after we learned about it.’ ” To which Henderson will counter, “What about the people? This relationship that caused you to revote goes back prior to the vote of November 1998. If you got to revote, well, why don’t the voters of the City of San Diego get to have a fully informed vote?” He believes the city doesn’t want the voters to vote again because they might not approve the $453 million project. With Ralph Inzunza in District 8 voting yes and (perhaps) the newest councilmember in District 6 agreeing, the ballpark project will once again be affirmed at 9 to 0. But, Henderson asks, when do the people get their say?

Henderson has problems with the U.S. Attorney’s exonerating Moores. “He had limited his investigation to the question of whether or not John Moores had violated any laws by giving gifts. He didn’t look at the lobbying law; he obviously assumed that John Moores was not a lobbyist. He just looked at the question, is it a violation of law for a donor to give gifts in excess of the limit under the Political Reform Act?” That limit is set each year; this year it is $320. “By a very peculiar anomaly of Prop 208” — which is the Political Reform Act — “it’s not a crime. It was supposed to be a crime, but it’s not a crime. The U.S. Attorney put these gigantic blinders on. There is one thing we know isn’t a crime in California, and that’s for a donor to make a gift in excess of the limit, so let’s not look at anything regarding John Moores. Then we can stand up and say, ‘There’s absolutely no evidence that Moores violated the law.’ ”

Henderson alleges that a “pattern” of Moores’s gift-giving to Stallings began in 1995 or 1996, when Stallings voted against the Chargers ticket guarantee, the only no vote on the council at the time. He believes that because Moores wanted “unanimity” and she was the “one problem, they came to her and started giving her gifts.” At this time, Henderson says, neither Stallings nor anyone else knew about the ballpark project. It wasn’t until November 1996 that the city manager alerted some that the Padres wanted out of Qualcomm. Henderson thinks that no one on the council, including Stallings, knew that the Padres wanted new digs downtown until 1997.

Once the gift-giving has begun, Henderson asks, “What does John Moores know and what does Valerie Stallings know — now that she’s accepted this gift in April of 1996 — that I didn’t know, that you didn’t know, that nobody else but John Moores, Valerie Stallings, and her mother knew?” Henderson’s answer is, “That Valerie Stallings was a criminal. You see, John Moores suddenly had power over her. He could look her right in the eye and say, ‘You know, it’s not a crime for me to give you a gift in excess of $250’ — the amount at that time — ‘but it’s a crime for you to have received it. And, by the way, if you report it, you’ll be admitting to a crime. And you might be prosecuted and removed from office.’ ”

Do you think he actually told her that?

“Think about it. How do you know? What’s going through his head? After that first gift, Valerie Stallings and John Moores are in a very different relationship. Because Stallings knows that if he doesn’t keep his mouth shut, she could go to prison. Because she has violated the law. Willfully. She doesn’t know what’s going to happen to her. All she knows is that he knows and nobody else knows and if she screws around with him, he can make it public. He doesn’t get hurt; she does. What kind of control does that create?”

As a former councilmember, Henderson says disclosing gifts is “drummed into your head — you have to be extremely careful about gifts. Valerie Stallings started filing financial disclosure statements in 1991. She knew. She knew it was a crime to go over the limit. What’s the likelihood that John Moores didn’t know that?”


Mel Shapiro has made a number of requests to the city clerk’s office about people he has suspected of “lobbying without a license,” a pursuit that, he says, rarely takes place in city hall offices. Private, influential conversations occur in other venues — La Jolla restaurants, golf courses, skyboxes at Chargers and Padres games. One person Shapiro complained about was Mark Nelson, who was lobbying for sdg&e (he is now the director of local government affairs for Sempra Energy). After receiving the standard “friendly” letter from the city clerk, Nelson agreed to register. Another occasion occurred during 1998 and 1999 when competitive bids were being made on the Naval Training Center. Based on news reports he had read, Shapiro wondered whether Corky McMillin of the Corky McMillin Companies wasn’t “unduly” lobbying and shouldn’t register. Shapiro complained to City Clerk Charles Abdelnour, and he sent the friendly letter. The letter advises an individual or a company that “you may be required to register as a lobbyist with the City of San Diego” or “provide evidence that you are exempt from the…requirements.”

The McMillin Companies responded in a letter dated July 7, 1999, that “no employee had contacts with city officials entitling the individual to $2000 or more in quarterly compensation.” They stated their review “excluded contacts with city officials that fell within the exception set forth in §27.4004(c) of the ordinance.” That part exempts the person “whose sole activity” includes the proposal process, the bid process, and the negotiating process after a bid is won.

What exactly does “sole activity” mean? Les Girard says that he interpreted that phrase to mean “the sole activity as the subject of the meeting. In other words, if John Moores and Larry Lucchino were meeting with the mayor solely for the purpose of the Memorandum of Understanding and its implementing agreement, then that qualified as an exception.” So long as Moores and Lucchino weren’t discussing some other business during the same meeting, they were exempt from having to register as lobbyists. (One wonders how anyone might know what passed between a city official and a citizen, an unwieldy problem when trying to hold people accountable under the lobbying ordinance.)

Shapiro sees “sole activity” differently. He doubts that any company has a person whose sole activity it is only to submit a bid, only to make oral requests for proposals, only to negotiate an agreement with the city after the city has awarded a contract. Does it mean that on any city project a bidder can bypass lobbying restrictions if he employs a person whose sole activity is that project? The confusion mounts. What about the in-house lobbyists, CEOs, and other high-placed company employees, whose job it is to influence city officials on behalf of a contract and yet whose job of influencing is not their sole activity?

The exemption, in other words, is a way for a person to exert influence, as long as he can claim he is part of a competitively bid contract.

The other problem is the compensation of in-house lobbyists. The salaries of Corky McMillin, John Moores, and Larry Lucchino are generally guarded secrets. (A recent estimate of John Moores’s wealth is down to a NASDAQ-decimated $190 million from the near $600 million of only two years ago.) Surely, if these three men were in-house lobbyists for their ventures, a few phone calls, a few lunches, a few closed-door meetings would amount as salary to much more than the then-current $2000 per quarter in compensation. Would anyone dispute that in a bid for the Naval Training Center contract, McMillin would not have reached that threshold easily? Would anyone dispute that in order to sweeten a deal for a downtown ballpark and real estate development, Moores or Lucchino wouldn’t have reached that threshold just as easily?

The notion of an exemption based on someone’s “sole activity” is, for many, as indefensible as it is unenforceable. Of course business owners and CEOs lobby city officials for their contracts. Of course they earn millions in salaries. Of course such lobbying is not their “sole activity.” And yet no one in the city I spoke with called the lobbying ordinance’s exemption clause a loophole. Casey Gwinn did stress that John Moores has no permanent exemption. In the future, other projects may require him to register.

By spring 1999, Mel Shapiro had read in the Union-Tribune that Moores and Lucchino were holding numerous private meetings with then-Mayor Susan Golding. What also buzzed Shapiro’s antennae was one of the “what if” scenarios published by the city clerk’s office in its booklet on lobbying, written to publicize the revised ordinance.

I’m the CEO of my company, which employs a full-time lobbyist. She is registered with the City. This month we’ve both been meeting with City staff to discuss a major project we’re developing. I also spent some time working with her on a presentation she gave at a committee hearing, then sat in on that hearing while she spoke. Am I a lobbyist?

The test is whether you received the threshold compensation for these activities, each of which is an integral part of influencing a municipal decision. Although your main job at your company is not as a “lobbyist,” you are performing some of a lobbyist’s functions. If your compensation for your “lobby-like” activities reaches the threshold, then you are required to register.

To Shapiro’s amazement, this scenario fit Moores’s and Lucchino’s activities like a glove. Bruce Henderson, representing Shapiro, sent a letter to Abdelnour demanding that Moores and Lucchino register. In response, Abdelnour’s office sent two requests. One went to the city attorney to get an interpretation of the exemption clause for lobbyists. Because the city clerk’s office has no on-staff counsel, Abdelnour and Deputy Director Joyce Lane sought clarification of the language by the city attorney, who wrote the ordinance. Lane said that the language of the old ordinance was written so badly that “you had to pay an attorney to interpret it.” Apparently even in the new version the exemption clause was not clear. The other request from Abdelnour’s office went directly to Moores and Lucchino, advising them that they “may need to register.”

Representing the Padres at this time was Curtis Michael Fitzpatrick, who passed away last year. Fitzpatrick, in the city attorney’s office for more than 20 years and once the right-hand man of City Attorney John Witt, wrote that the lobbying ordinance requires all people be held to the same standard. To single out Moores and Lucchino as exceptions to the exemption is a denial of their right to equal protection under the law. In this respect, Fitzpatrick suggested that the lobbying ordinance itself may be “constitutionally defective.” He also wrote, “At the very time the Ordinance was being considered by the City Council (May 1998)” — roughly the time the old ordinance was undergoing a major makeover — “my clients were meeting with the city’s negotiating team for the sole purpose of negotiating the terms of a written agreement with the City.”

Fitzpatrick ends his letter by referring the city clerk to the city attorney’s ruling. That memo was written by Les Girard, who recently explained it to me. “The intent of the lobbying ordinance,” he said, “was to exempt from registration principals and an entity that the city council has selected to negotiate a specific contract.” The interpretation of the ordinance’s exemption clause is based on the idea of a “sole source,” that is, a source that has no competition. The Memorandum of Understanding (MOU) gave that sole source its direction: “Here, San Diego, you go negotiate with the only baseball team in town on a new ballpark.” Girard said also that the ordinance seeks disclosure from those with no name recognition who lobby city hall for a living. “It didn’t seem to be the intent of the ordinance to require somebody like John Moores or Larry Lucchino to register as lobbyists, because everybody knows who they are and everybody knows what they’re after.”

I asked Girard if his memo in any sense grandfathered in Moores’s and Lucchino’s lobbying efforts with city officials before the Task Force on Ballpark Planning began holding its meetings in late 1997.

“I’m not prepared to comment on that,” he said, “because the issue that was presented to us was specifically meetings following the adopting of the [city council] resolution in February 1998. We were not asked to opine on any requirement to register as lobbyists regarding meetings to lobbying for anything prior to that time.” Girard said he didn’t know of any meetings between Moores and Lucchino and politicians prior to February 1998.

What about the fact that we now know Moores was giving Stallings’s family members airline tickets in April 1996, at the time of her cancer treatments? Was Moores “lobbying without a license” then?

“There’s nothing that requires a person to register as a lobbyist,” Girard said, “merely because they have contact with a public official on a friendly basis.” He noted that he didn’t know whether Moores and Lucchino would have been required to register as lobbyists back in 1996, “had we known X, Y, or Z. I don’t know all the facts behind the meetings. And the fact that gifts were given doesn’t necessarily mean there were meetings. I don’t know if there were meetings and I don’t know what the subjects of those meetings were.”

Girard admitted suggesting that he and the city clerk “modify the lobbying ordinance in light of the situation that arose at the time I did that memo” in May 1999. He believes that the language was not clear then and that reasonable people can have different interpretations of these ordinances, no matter who crafts them. “I would agree that you can read that language and have questions about its applicability.” As examples, he cites two changes. One was this expanded definition: “ ‘In-House Lobbyist’ includes, but is not limited to, owners, officers, and salaried employees of a business.” This language was added as a way to declare owners and high-level businessmen like Moores and Lucchino as potential lobbyists. The other change came in part of the exemption clause. The phrase “by other means of selection recognized by law” was added to “clarify the idea of ‘sole source.’ ”

Was the downtown ballpark a competitively bid contract? (I wanted to put this and other questions to Padres officials, but phone calls were not returned.)

Girard said no. San Diego made the Padres an “agent of the city,” licensed the team, in effect, to conduct the city’s business, which includes granting them the power to competitively bid contracts. “The city was directed,” Girard says, “to negotiate with the Padres for the purpose of the MOU.” (One wonders by whom the “city was directed.”) Girard noted that it wasn’t the city who was responsible for finding the best bids on building the ballpark “because in terms of the MOU, the Padres are responsible for getting the construction contracts.”

The downtown ballpark and its surrounding real estate development was from the get-go outside any bid process with the city. This project is not only the largest and most uncommon business venture in San Diego history, its owner and CEO have also been given an unprecedented exemption to some of the city’s laws. Can it be any more obvious that Moores and Lucchino’s influence upon city officials has been matched by the blessing of singularity and the exemption of law?


Can lobbying be better policed? Should all lobbying be subject to the same reporting rules, whether or not it is a “sole source” contract or part of a competitively bid process? Should gift-giving be in the same class as gift-receiving in the post-Stallings era?

The first difficulty is how to police private meetings. Bonnie Stone states that the city relies “to a large degree” in identifying lobbyists on an “honor system. We believe people, in the vast majority, are honest and attempt to be honest.” However, the kind of lobbying she said the city is looking to oversee “is when it’s just you and me meeting and there’s not a paper document [of the meeting] for a paper trail.” This means a huddle between citizen and city official remains private, chinked, and caulked tight. Perhaps as it should be. To invade such hidden spaces would require a politburo and a kgb, plus an army of apparatchiks to record and monitor what is said.

Yet what else but a “lack of oversight” befell Moores and Lucchino when their lobbying of the city was given carte blanche. When “there’s not a paper document” between a donor and a public official, the door to abusing that “honor system” is pushed wide open. Moreover, with no restriction on the “exempted lobbyist,” the tendency for many people is not to question his activities. What’s more, some are jealous that the law gives a select few the right to do precisely what the rest of us couldn’t do — lobby without a license in plain sight. Like access to an IPO, such exclusivity for some is the whole point.

Head Deputy City Attorney William Newsome, in charge of the Consumer Fraud Unit from 1985 to January 1999, used to investigate “integrity issues” with regard to city officials. He says that “unlawful or criminal” lobbying in which private contact (e-mail, phone calls, letters, closed-door confabs) occurs is “by its very nature [something that] may go undetected.” Where are the police to monitor that exchange? “The person who did it is not going to run and confess” what he’s just done, “and the elected official has no idea” if the person was or was not a lobbyist. The elected official may not know a particular “unlawful” lobbyist is the “hired gun” of some company. Newsome says that city officials neither ask nor are they required to ask of a person they are about to talk with, “Are you or are you not a registered lobbyist?” No one “walks through a metal detector” whose sirens would flash and wail a bad apple from the otherwise good bunch. Newsome believes that there’s little chance “somebody outside that entire equation” of the private conversation might suspect something and send out the bloodhounds.

(I had hoped to interview Councilmembers George Stevens and Byron Wear, whose tenure on the council has no doubt included such private contact with registered and unregistered lobbyists. Calls to both were unreturned.)

Bruce Henderson is writing a letter to U.S. Attorney General John Ashcroft asking that the Moores-Stallings investigation be reopened. What sticks in Henderson’s craw is not Valerie Stallings’s guilt but the pattern of “escalation” of Moores’s giving that didn’t stop until the FBI investigation began in April 2000. Henderson says that if one did a graph, from 1996 through Stallings’s purchase and sale of the Neon Systems stock in 1999, “You can see a fairly dramatic escalation from a few thousand up to $10,000 that she benefited. You see this escalation of gifts, but now say you add in the memorabilia.” The Stallings plea identifies memorabilia, but the fbi investigation fails to assign any value to those gifts. For example, we know the value of the holder display ($240) that supports five baseballs signed by the 1996 Padres team, the Western Division champs. But what is the value of the baseballs alone or of the whole display together, especially since it is one of only 50 made?

About this pattern of gifts, Michael Aguirre agrees with Henderson. Aguirre, who ran unsuccessfully for city council more than a decade ago and is a former prosecutor in the D.A.’s office, says that if he presented this pattern to a jury, the escalation of gifts would be for Moores’s attorneys “much more difficult to defend than the isolated stock transaction.” To instruct a jury to draw inferences based on this trail of gifts, Aguirre says, would make their relationship “more significant.” More critical than any undisclosed value of the baseball memorabilia Stallings received is the repetition of gifts and their context. “Once you’re talking about credit-card usage, flying family members around, that’s more in the nature of graft.” Graft is to use one’s position to get an advantage over another; bribery involves payment of money or property for that advantage. “It’s legally unacceptable,” Aguirre continues, “to be giving gifts to elected officials when they are considering a public bestowment upon a gift-giver at the same time. It’s not something that we should permit, period.” In a sense, Stallings was grafted on to Moores’s lifestyle. “She was like a member of his club,” Aguirre says. “Her currency wasn’t money, it was power. And in John Moores’s market, money or power has currency.”

When Aguirre ran for the city council, he says, he wanted to be open to the interests of businesspeople or developers. But he learned that by sending out the message of being “fiscally responsible” for large capital projects, he felt “the ‘system in place’ said, ‘We don’t want that type of person’ ” on the council. In essence, he believes, “The system protects undue influence; it doesn’t protect against undue influence. That’s the reality of the system we operate under.”

How does Aguirre explain the John Moores exemption?

Politics. “We live in a society in which the law has been politicized, particularly at the law-enforcement level, and particularly in the district attorney’s office: The district attorney and the city attorney have become political figures. There’s nothing wrong with wanting to be ambitious. But when you decide to use the prosecutorial power of the office in terms of how it’s going to make you look politically,” then, Aguirre says, a lot doesn’t get investigated or prosecuted.

For Aguirre, it seems the city’s enforcement division “permits everything up to the brink of bribery.” He wants prosecutors and legislators to protect us from undue influence. As a case in point, Aguirre cites the restructured financing plan in which taxes from the proposed 1200-room Campbell Shipyard hotel were taken off the table. Aguirre calls the original hotel plan “bogus. What was the basis of the decision two years ago when Valerie and the others made their decision that it was going to be built on time? That’s where you have to ask, ‘Was there undue influence?’ ”

Aguirre doubts anyone is asking on what grounds city councilmembers made the decision that the hotel would get built on time. They didn’t question the hotel’s financing in negotiating the Memorandum of Understanding. Instead, “It was a factual determination about whether there were reasonable assurances to believe the hotel would be built and produce income. That’s a subtle point in some ways. But it’s not so subtle when you consider the fact that without that determination the ballpark could not have proceeded.”

The Campbell hotel was expected to fund 25 percent of the city’s annual debt service on the ballpark bonds. Now that this funding source is gone, Aguirre says trouble may lie ahead. With the city paying more up front for the Padres stadium, a new Mayday is being signaled: How much of a role will undue influence play from now on, since the city council’s five new members are committed to the ballpark?

A further problem has been identified by Peter Navarro, a candidate for Valerie Stallings’s seat in this month’s District 6 election. He’s pushing a “Fair Deal” proposal to jump-start ballpark construction. This would require several steps, among them negotiating with Bruce Henderson not to put the project to a citywide vote again, where it would no doubt fail. Navarro believes Murphy’s latest funding bid is a violation of the MOU. Murphy’s plan calls for the Centre City Development Corporation to shell out $24 million more than its already guaranteed $50 million and for the city to put in $30 million of its own money. These moves would violate a provision in the MOU that requires a new vote if the financial commitments of the city are increased. Apparently Murphy’s proposal does just that. Without Navarro’s plan or some other restructuring, it looks like fresh lawsuits, dead ahead.

One way to limit the influence of unregulated gift-givers in San Diego may be Mayor Murphy’s proposed Ethics Commission. Because of the recondite behavior of a few lobbyists, perhaps only an ethics commission can oversee and restrict their conduct. There is uncertainty, though, as to how far under California law a local ethics commission could fine and suspend people it finds guilty of violating ordinances. Casey Gwinn will introduce a charter amendment for subpoena power on the March 2002 ballot. This, he says, “will allow the Ethics Commission to subpoena any percipient witness, and that would include someone who says, ‘I’m not under your jurisdiction.’ ” Like exempted lobbyists? “Absolutely.” Gwinn hopes that by budgeting the Ethics Commission with funds from his Public Integrity Unit and by convincing voters to alter the charter, the commission will have far more power to investigate and charge wrongdoers. He says the city needs a “citizen-led group” to take on this responsibility, to be “a conscience and an advocate for changes in the law.”

Michael Aguirre believes that an ethical approach to city government will begin when the city adopts an iron-clad policy for the giver. “If you are caught giving gifts or trying to unduly influence the city, the consequences are — we’re not going to do business with you. You don’t have to have a criminal sanction.” In effect, you’re fired.

Aguirre says the overdonor could be suspended from doing business with the city for a year. “Deterrence,” he notes, “works with people who have money and who are sensible. In the long haul, it would have been better for the Padres to not have had such influence. Honesty is always the best policy. Look what happened to John Moores. Compare the benefit of what he got — by giving Valerie the gifts — against the burden and the costs. No project for all those months. Those of us who do support the ballpark and a fair funding for it, how have we been served by all this gift-giving and all that lobbying? We haven’t.”

n’t.”

With some longing in his voice, Aguirre says, “I happen to like John Moores. I’m disappointed because I feel he took advantage of a lot of people who trusted him. He let us down and has never apologized. Which I’m personally offended by. A lot of us put our reputations on the line to support what he was trying to do, and, in part, that turned out to lack credibility. I have no hostile feelings toward him. But it’s a tragedy what happened. For him and for Valerie.”

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