Karin Winner and Herb Klein
This hasn't been the best year for Casey Gwinn, San Diego's city attorney. The 41-year-old graduate of UCLA law school, who was elected in 1996 and reelected four years later with no opposition, began 2001 scrambling to explain why the city had lost a $94.5 million inverse-condemnation lawsuit brought by Otay Mesa developer Roque de la Fuente.
Gwinn ran unopposed. Even then, he raised thousands of dollars from members of law firms.
The news didn't get much better last month when an Orange County judge upheld most of the damage award, leaving local taxpayers facing a judgment that could be as much as $100 million or more -- a sum that includes interest and attorneys' fees. Years of appeals may lie ahead. Gwinn faced much criticism about his office's conduct of the trial, in which he failed to cross-examine De la Fuente on the witness stand and watched as one of the city's top expert witnesses was discredited by the plaintiff's attorneys. After the disastrous verdict, Gwinn surrendered the case to outside counsel, the big Los Angeles law firm of Latham & Watkins.
Proposed downtown ballpark
But even that move proved embarrassing, when it came to light that the city had forked over at least $3 million to the Los Angeles firm for coming up with the failed appeals strategy.
Don Bauder. Gwinn letter to UT: "Mr. Bauder has misrepresented the truth through conduct that may be legally actionable."
Then there is Gwinn's attempt to win the coveted appointment by the administration of President George W. Bush to become San Diego's next United States attorney. A loyal Republican who collected the endorsements of three GOP congressmen (Randy "Duke" Cunningham, Duncan Hunter, and Darrell Issa), Gwinn, on the surface at least, seemed like a shoo-in. But the White House has been dragging its feet on filling the post, and last month, the San Diego Union-Tribune made it clear that Gwinn was not the newspaper's choice, proclaiming instead, "The best candidate in this field of applicants is Charles La Bella," an ex-deputy U.S. attorney who earned fame as a Clinton antagonist.
Zane Mann. Gwinn's charge that Bauder had made a "false statement" to him, says Mann, "is just not true."
Asked why the Union-Tribune failed to support Gwinn, insiders cite the opinion held by many local lawyers and politicos: the city attorney is an intellectual and political lightweight who got into office through the good graces of his onetime boss, ex-city attorney John Witt. Insiders also say that Gwinn has often seemed too willing to cut ethical corners. On the verge of retirement back in 1996, Witt delayed announcing his departure, hoping that it would be too late for candidates other than Gwinn to get into the race to succeed him.
Letter from Casey Gwinn to Karin Winner
The strategy worked and Gwinn ran unopposed. Even then, he raised thousands of dollars from members of law firms with business before the city, including the downtown firm of Luce, Forward, whose partner, Charles Bird, a Gwinn contributor, represented the city in its legal battles against opponents of the Chargers' ticket guarantee and the downtown baseball stadium. Much of the money was used to repay Gwinn for a personal loan he had made to an earlier campaign in which he had run for district attorney.
Thus assured of winning office, during the months before the March 1996 election, Gwinn began lashing out at opponents of the Chargers' ticket guarantee and the Qualcomm Stadium expansion. In January and February of 1996 he came up with a series of legal actions on behalf of the ticket guarantee and expansion plan, which requires city taxpayers to pick up the tab for unsold seats during Chargers games at Qualcomm Stadium. The long-running legal battle lasted until February 1997, when Gwinn, who by then had been elected city attorney, convinced superior court judge Anthony Joseph to throw out a taxpayer lawsuit challenging the Chargers' deal with the city.
"It was a clean sweep for the city," Gwinn boasted to reporters outside the court. "The judge has made clear that what the city is doing at the stadium is legal and appropriate -- and has been." The ticket guarantee has since cost city taxpayers more than $10 million, and the clock is still running.
Gwinn has been equally stalwart in his backing of the new downtown baseball stadium. Critics say his oft-times emotional support of the project has sometimes gotten in the way of his duties as city prosecutor. They point to the case of Padres owner John Moores and Councilwoman Valerie Stallings, who was eventually forced to plead guilty to charges of political corruption and resign when it came to light she had received stock tips and other favors from Moores.
Even well before the Stallings transgressions emerged into public view in April 2000, it was apparent that Gwinn was consistently an ally of Padres management.
After Moores brought his November 1998 campaign for the downtown baseball stadium to a victorious close, Moores rewarded many of his supporters, both in and outside city hall, with a series of personal gifts. One recipient was city planning commissioner Geralda "Gerri" Stryker, who had been a co-chairman of the pro-stadium campaign, on which Moores had spent more than $1 million. The Moores gifts to Stryker included a "Two-Volume Book on Lane Field," a "Commemorative Wine Bottle," and a "'98 Player Photo Album," according to her financial disclosure statement.
Though the gifts were never appraised, other officials who had received them reported their value to be in excess of $300. One nongovernmental official who received the photo album proudly told friends that as a collectors' item it was worth "thousands of dollars." If so, then Stryker, under state conflict-of-interest laws, would have been barred from voting as a planning commissioner on any and all aspects of the downtown stadium and related development, including hotels and office buildings.
Gwinn's office, however, quickly issued an opinion clearing the way for Stryker to participate in all stadium-related votes that came before her. "If the fair-market value [of the gifts] is difficult to ascertain," Gwinn's office opined in a letter dated December 29, 1999, "then the value is to be determined by the cost of the donor. If this value is unknown, then the recipient shall make a good faith and reasonable approximation [of the gifts' value].
"Based on our investigation, we do not have credible evidence establishing that Ms. Stryker's valuations of the three gifts were not a reasonable approximation. By law, she therefore lacks a financial interest in [the ballpark project] because she has not been the recipient of gifts in excess of $300 from any donor, specifically Mr. Moores."
Earlier in 1999, when Mel Shapiro, a retired accountant, objected that Moores and then Padres co-owner Larry Lucchino appeared to be violating the city's influence-peddling law by failing to file lobbying statements disclosing gifts and dinners they had bestowed during their private meetings with public officials, Gwinn backed Moores.
"Mr. Moores and Mr. Lucchino," Gwinn's office ruled, "are exempted from the registration requirements because they have been negotiating a written agreement following the selection of the San Diego Padres as party to a contract with the city." The city council, following Gwinn's advice, later changed the wording of the lobbying law to make it more difficult for private citizens to file complaints such as Shapiro's. As a result, Shapiro concluded, the law "has been gutted -- now they don't have to report at all." Campaign records showed that during 1999 Gwinn had collected at least $1000 in campaign contributions from Moores and members of the Moores family.
When the Stallings matter became public in April 2000, Gwinn's response was to argue that the councilwoman had broken no laws. He reasoned that, because she had purchased stock in a Moores entity -- a Texas software company called Neon Systems -- unrelated to the stadium, the conflict-of-interest laws were not violated.
"People are calling us and writing us and e-mailing us, and people are angry, and a fair amount of their anger is directed toward me -- 'Why don't you step up and condemn this?' " Gwinn told the Union-Tribune in May 2000. "I'm not the ethics police. And that's frustrating to the public, who believe I should be. My role is to determine whether or not it is a violation of state law or local law that I have jurisdiction over. My role is not to say whether something is immoral or unethical."
Ultimately, Stallings pled guilty to the crime of failing to report gifts from Moores and voting with a conflict of interest, but by then Gwinn was no longer involved with the case, which was ultimately handled by the offices of U.S. Attorney and District Attorney. In a column dated May 16, 2000, Union-Tribune financial columnist Don Bauder reported that Gwinn, still taking no action himself, had referred the matter to the state's Fair Political Practices Commission and federal Securities and Exchange Commission. But, reported Bauder, "That may not be enough." He quoted attorney Richard E. Gattis as saying, "The DA is the appropriate person to investigate this, either the DA or attorney general in light of the fact that Gwinn has prejudged the case."
This month, Gwinn's efforts on behalf of John Moores and the downtown baseball stadium took a more personal turn, with the object of Gwinn's wrath being none other than Bauder, the respected columnist whose views are often at odds with those of the paper's editorial page. A longtime critic of the stadium deal, Bauder has frequently picked apart what he says are questionable financial details of the taxpayer-financed plan. As the one establishment voice speaking out against the proposal, Bauder has become a lightning rod for proponents frustrated by the legal and financial pitfalls the project has faced.
On November 6, Bauder opened a column about the baseball stadium by saying, "Do you know how to throw good money after bad? The city of San Diego proposes to give you a lesson.
"If you're already bald, like me, you should be able to read it without developing more follicle problems. If you have your hair, use Rogaine before tackling this document."
He went on to present a harrowing litany of damages to be suffered by taxpayers and concluded, "Mayor Murphy boasts that the size of the bond sale has been pared from $273 million to $170 million. But the difference simply comes out of another pocket. It won't be paid by the tooth fairy. The interest rate is so staggeringly high because all along, this deal has been a financial fantasy — if not finagling."
Noting that the ballpark bonds would command an unprecedented 8.83 interest rate, Bauder said, "The interest rate is so staggeringly high because the city cannot get unqualified approval of its bond counsel." He included a single, one-line quote from Zane Mann, a Palm Springs-based financial journalist who runs a newsletter called the California Municipal Bond Advisor. "In the municipal bond market, you couldn't sell a bond without the OK of bond counsel."
The next day, Gwinn wrote a letter to Union-Tribune editor Karin Winner, in which he claimed, "Mr. Bauder has misrepresented the truth through conduct that may be legally actionable." In other words, Gwinn was threatening to sue the paper for what his letter alleged was Bauder's "misconduct."
"First and foremost, it is clear that Mr. Bauder contacted Zane Mann, the owner and publisher of the California Municipal Bond Advisor and made a false statement regarding the City's ballpark financing with knowledge that this statement was false," the letter said.
"After reading Mr. Bauder's column, I contacted Zane Mann to inquire of Mr. Bauder's interview with him. Mr. Mann told me that Don Bauder called him and told him that 'The city does not have a bond counsel opinion' for the proposed financing. Mr. Mann said that his entire conversation and all of his comments were premised on that false statement by Don Bauder. Mr. Mann did not know until I called him that the City has an opinion from bond counsel. He said that, based on Don Bauder's negative and false assertions during their interview, he was unaware of the true nature of our bond issuance until I called to explain the truth.
"It is readily apparent that Mr. Bauder knew that the City is moving forward on a qualified legal opinion from Orrick, Herrington & Sutcliffe because he describes the qualified opinion in his column. Nevertheless, he made a false representation to the owner and publisher of the primary publication for the marketing of the City's bonds. His conduct is a clear effort to negatively impact the City's ability to market its bonds to the municipal bond market.
"There is little doubt that such statements are actionable if made in the context of a private financing, and we are researching whether there is any different conclusion if the statements are made in the context of a municipal financing.
"Please handle this complaint with great care. We remain concerned that Mr. Bauder may take additional actions in the next 30 days, in retaliation for this complaint, which undermine the marketability of the City's bonds.
"I urge you to hold Mr. Bauder accountable for his misconduct. His column masqueraded as the truth but, in the end, contained deceiving assertions that bear no resemblance to the truth. His misconduct reflects directly on the character and accuracy of the ownership and leadership of the San Diego Union-Tribune.
"The Union Tribune has always been a towering force for good in the San Diego community. The paper prides itself on reporters and columnists who have the highest regard for truth and veracity. I urge you to maintain those standards in the face of Mr. Bauder's misconduct."
Bauder declined to comment on the letter, and neither Gwinn nor Union-Tribune attorney Hal Fuson, to whom Winner's office referred questions, responded to messages left at their offices. But in a telephone interview from Palm Springs, Mann said that Gwinn's charge that Bauder had deliberately misrepresented the facts of the ballpark bond issue to elicit a quote from him were "just downright ridiculous."
"Obviously I'm well aware that Don has never been in favor of the stadium and has written not one but probably ten columns on it. Everything I said in his column I stand by, and I have no qualms about it," Mann said. "I did not know when I talked to Don that there was a qualified bond-approving attorney opinion. I was under the impression that there was no opinion because they couldn't write one. And there is a difference between no opinion and a qualified opinion. He didn't make any statement about the opinion, and since it didn't come up, I didn't ask. And that's, I think, the crux of the matter.
"I know what a qualified opinion is. And in a subsequent interview -- not necessarily with Bauder -- I said that's one of the reasons that the interest rate is so high, because of the qualified opinion. If it had a real opinion, the interest rate would not be that high."
Gwinn's charge that Bauder had made a "false statement" to him, says Mann, "is just not true." Gwinn's further assertion that "Mr. Bauder's false statements, particularly those made to the California Municipal Bond Advisor, raise profound issues regarding a clear effort to thwart the city's ability to issue bonds on the ballpark redevelopment project" is, Mann says, "pure nonsense."
"Incidentally, the publisher [of the Union-Tribune] subsequently got in touch with me, plus the owner of their chain got in touch with me. My phone was ringing off the hook that following week. I talked to everybody. Don's boss, I assume the business-page editor, wrote a letter in reply. While I didn't read the letter, they're saying, 'You want to sue us? Sue us.' Obviously there wasn't any grounds for suit. I thought it was ridiculous.
"I'm an old, longtime writer and reporter myself. I've been sued for libel. And I'm more than ticked off when some lawyer for somebody or other that I've written about says we're going to sue you unless you publish a retraction. I tell them go ahead and sue."
On Friday, Mann said that Gwinn had called to "apologize." "I didn't let him get too many words in," Mann said. "I gave him a 15-minute lecture on the freedom of the press and how ridiculous I thought his position was."