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Cocktail-Party Corruption

— San Diego's ballpark misadventure is a textbook study of a public and private leadership structure that is utterly incapable of challenging a fatuously unworkable and wholly unethical idea.

Those in the establishment who knew the project would never pencil out kept their mouths shut. Economically and/or socially, they were in someone else's pockets. If they spoke out, they might not get a contract from a company selling merchandise to the team, or one headed by a sports booster, or any real estate enterprise. Or they might not get invited to the Jewel Ball.

It's "cocktail-party corruption," says former councilmember Bruce Henderson.

The same failing hamstrings other cities -- particularly those that have caved in to the pro-sports extortion racket -- but San Diego has always had another handicap: the top-down, highly structured military mentality pervasive among the civilian ruling elite.

Traditionally, San Diego business and government leaders -- along with mainstream media -- march lockstep, and no one dares to say that a cliff is dead ahead. The ballpark project was hatched by the inner circle of the International Sports Council, most of whose members had a vested interest in public money being steered into pro-sports facilities and couldn't be bothered by the city's aging infrastructure, rundown schools, inadequate libraries, etc.

In San Diego, the head of the school system, media darling Alan Bersin, joined the ballpark claques, although his family's nearby real estate holdings may have been the major explanation.

To be sure, some business-establishment members are capable of independent thought, but the Prussian culture inhibits public expression of such thoughts. San Diego's high-tech and telecom executives boast that they "think outside the box." But that's in businesses involving their own money -- not in civic matters involving public money.

The final plan was put together by a Padres executive, the now-departed Larry Lucchino, who wanted to build a ballpark, and a mayor, Susan Golding, who wanted to go to the U.S. Senate. Neither they nor Padres majority owner John Moores knew much about real estate.

But there were high-powered and knowledgeable real estate people who knew that it was wildly optimistic to believe that 1850 hotel rooms, majestic office and retail complexes, parking facilities, and a ballpark would mushroom out of the ground in less than four years -- throwing off tax dollars to offset the cost of bond-debt service. Ten or 12 years may have been realistic; East Village will blossom someday. But by early 2002? Impossible.

Yet self-proclaimed real estate experts quickly rubber-stamped the pie-in-the-sky, employing the military ploy of launching a woefully underfunded project and then demanding more money at midstream.

The Chamber of Commerce -- known for self-aggrandizing boosterism but not for doing its due diligence -- enthusiastically backed the proposal from the outset and was incapable of re-examining its position as the promises turned to horse dung, as they are today. It's clear that any development, if it takes place, won't be what voters approved.

Today, people with blindfolds blame the ballpark's delay on the investigation of Moores's gifts to defrocked councilmember Valerie Stallings, or on lawsuits. To be sure, the gift-giving scandal played a role, but as San Diego lawyer Pat Shea, chairman of the task force, points out, the ballpark project was going to be stalled for economic reasons, with or without an investigation.

"The revenue-projection model was way overly ambitious," says Shea. Among the faulty assumptions were "a number of hotels coming online in an abbreviated time frame for the purposes of creating new transient occupancy tax (TOT) revenues." Overall, "it was a very optimistic financial projection" that was likely to "wind up with some deficiency in the early years that would have to be covered by the general fund, and one of the premises of Prop C was that the project would not have to go into existing general-fund revenues."

The Prop C ballot question promised "no new taxes." In the giddiness of the team's World Series appearance, the public fell face first into the horse dung by a near 60-40 margin.

Then came one of San Diego's major disgraces -- the "sufficient assurances" city council vote of March 31, 1999. The San Diego County Taxpayers Association, rapidly losing credibility because of its overall support of the project, urged that the vote be delayed. It pointed out that only 60 days before the scheduled March 31 vote, the Centre City Development Corp (CCDC) president had admitted that "most issues of sufficient assurances, ancillary development details, and financing are in formation/negotiation."

The council paid no heed and passed "sufficient assurances" without the slightest assurance that the project could succeed.

The Padres had no financing commitments, they admit. It's doubtful that the City Attorney's office or city manager's office even asked about financing commitments. Today, the city attorney's office doesn't want to discuss the matter.

San Diego's structure of strong city manager, weak mayor, and weak council "utterly failed us," says Henderson, who puts much of the blame on the stark ineptitude of the city attorney's office.

In early 2001, after the U.S. Attorney and District Attorney slapped Stallings' wrist and refused to charge Moores for the gift-giving, the council had a chance to revisit those sufficient assurances, which by that time were a joke, because the ancillary development could never even be significantly underway by early 2002. But in an attempt to remove, in twisted legal theory, the Stallings taint, the council simply reaffirmed the so-called validity of the original vote. It was pathos.

The whole sorry story is an example of a breakdown of governmental separation of powers, according to Henderson.

If the ballpark fiasco is ever investigated, the role of the judiciary must come under scrutiny. Over and over, it refused to second-guess the dunderheaded and deceitful actions of other branches of government.

It also may have played a role in the delaying of the grand jury's highly critical and prescient report on the project. Among many things, the grand jury warned that there had been no downside risk planning -- for instance, what would happen if there were a recession. (Intelligently managed companies always have a gloomy scenario plan, but remember: The businesspeople involved in the ballpark planning were playing with other people's -- the taxpayers' -- money.)

Grand jury foreman Peter DiRenza says that the report went to the Superior Court by mid-October of 1998 but sat on two judges' desks until the day before the early November election. On the Friday before the election, one judge held an ex parte meeting with representatives of the city, CCDC, and a prominent ballpark-touting lawyer falsely claiming to represent the port, says DiRenza. DiRenza was not invited. It was mid-Monday, the day before the election, when he finally got the report cleared. The Union-Tribune chopped up and buried the story. The rest is pathetic history that will, unfortunately, be repeated over and over until the people demand competence and honesty in their government and private institutions.

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— San Diego's ballpark misadventure is a textbook study of a public and private leadership structure that is utterly incapable of challenging a fatuously unworkable and wholly unethical idea.

Those in the establishment who knew the project would never pencil out kept their mouths shut. Economically and/or socially, they were in someone else's pockets. If they spoke out, they might not get a contract from a company selling merchandise to the team, or one headed by a sports booster, or any real estate enterprise. Or they might not get invited to the Jewel Ball.

It's "cocktail-party corruption," says former councilmember Bruce Henderson.

The same failing hamstrings other cities -- particularly those that have caved in to the pro-sports extortion racket -- but San Diego has always had another handicap: the top-down, highly structured military mentality pervasive among the civilian ruling elite.

Traditionally, San Diego business and government leaders -- along with mainstream media -- march lockstep, and no one dares to say that a cliff is dead ahead. The ballpark project was hatched by the inner circle of the International Sports Council, most of whose members had a vested interest in public money being steered into pro-sports facilities and couldn't be bothered by the city's aging infrastructure, rundown schools, inadequate libraries, etc.

In San Diego, the head of the school system, media darling Alan Bersin, joined the ballpark claques, although his family's nearby real estate holdings may have been the major explanation.

To be sure, some business-establishment members are capable of independent thought, but the Prussian culture inhibits public expression of such thoughts. San Diego's high-tech and telecom executives boast that they "think outside the box." But that's in businesses involving their own money -- not in civic matters involving public money.

The final plan was put together by a Padres executive, the now-departed Larry Lucchino, who wanted to build a ballpark, and a mayor, Susan Golding, who wanted to go to the U.S. Senate. Neither they nor Padres majority owner John Moores knew much about real estate.

But there were high-powered and knowledgeable real estate people who knew that it was wildly optimistic to believe that 1850 hotel rooms, majestic office and retail complexes, parking facilities, and a ballpark would mushroom out of the ground in less than four years -- throwing off tax dollars to offset the cost of bond-debt service. Ten or 12 years may have been realistic; East Village will blossom someday. But by early 2002? Impossible.

Yet self-proclaimed real estate experts quickly rubber-stamped the pie-in-the-sky, employing the military ploy of launching a woefully underfunded project and then demanding more money at midstream.

The Chamber of Commerce -- known for self-aggrandizing boosterism but not for doing its due diligence -- enthusiastically backed the proposal from the outset and was incapable of re-examining its position as the promises turned to horse dung, as they are today. It's clear that any development, if it takes place, won't be what voters approved.

Today, people with blindfolds blame the ballpark's delay on the investigation of Moores's gifts to defrocked councilmember Valerie Stallings, or on lawsuits. To be sure, the gift-giving scandal played a role, but as San Diego lawyer Pat Shea, chairman of the task force, points out, the ballpark project was going to be stalled for economic reasons, with or without an investigation.

"The revenue-projection model was way overly ambitious," says Shea. Among the faulty assumptions were "a number of hotels coming online in an abbreviated time frame for the purposes of creating new transient occupancy tax (TOT) revenues." Overall, "it was a very optimistic financial projection" that was likely to "wind up with some deficiency in the early years that would have to be covered by the general fund, and one of the premises of Prop C was that the project would not have to go into existing general-fund revenues."

The Prop C ballot question promised "no new taxes." In the giddiness of the team's World Series appearance, the public fell face first into the horse dung by a near 60-40 margin.

Then came one of San Diego's major disgraces -- the "sufficient assurances" city council vote of March 31, 1999. The San Diego County Taxpayers Association, rapidly losing credibility because of its overall support of the project, urged that the vote be delayed. It pointed out that only 60 days before the scheduled March 31 vote, the Centre City Development Corp (CCDC) president had admitted that "most issues of sufficient assurances, ancillary development details, and financing are in formation/negotiation."

The council paid no heed and passed "sufficient assurances" without the slightest assurance that the project could succeed.

The Padres had no financing commitments, they admit. It's doubtful that the City Attorney's office or city manager's office even asked about financing commitments. Today, the city attorney's office doesn't want to discuss the matter.

San Diego's structure of strong city manager, weak mayor, and weak council "utterly failed us," says Henderson, who puts much of the blame on the stark ineptitude of the city attorney's office.

In early 2001, after the U.S. Attorney and District Attorney slapped Stallings' wrist and refused to charge Moores for the gift-giving, the council had a chance to revisit those sufficient assurances, which by that time were a joke, because the ancillary development could never even be significantly underway by early 2002. But in an attempt to remove, in twisted legal theory, the Stallings taint, the council simply reaffirmed the so-called validity of the original vote. It was pathos.

The whole sorry story is an example of a breakdown of governmental separation of powers, according to Henderson.

If the ballpark fiasco is ever investigated, the role of the judiciary must come under scrutiny. Over and over, it refused to second-guess the dunderheaded and deceitful actions of other branches of government.

It also may have played a role in the delaying of the grand jury's highly critical and prescient report on the project. Among many things, the grand jury warned that there had been no downside risk planning -- for instance, what would happen if there were a recession. (Intelligently managed companies always have a gloomy scenario plan, but remember: The businesspeople involved in the ballpark planning were playing with other people's -- the taxpayers' -- money.)

Grand jury foreman Peter DiRenza says that the report went to the Superior Court by mid-October of 1998 but sat on two judges' desks until the day before the early November election. On the Friday before the election, one judge held an ex parte meeting with representatives of the city, CCDC, and a prominent ballpark-touting lawyer falsely claiming to represent the port, says DiRenza. DiRenza was not invited. It was mid-Monday, the day before the election, when he finally got the report cleared. The Union-Tribune chopped up and buried the story. The rest is pathetic history that will, unfortunately, be repeated over and over until the people demand competence and honesty in their government and private institutions.

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