Sanitized History

San Diego — Early this month, Kevin Starr, history professor at the University of Southern California, was reading the New York Times. He saw a headline referring to San Diego as a kind of Enron-by-the-Sea. Starr confesses muttering to himself, "Holy mackerel! I missed this story."

Amen. In his just-published book, Coast of Dreams: California on the Edge, 1990-2003, Starr missed a lot of things. He sure missed having good fact-checkers.

Possibly the single worst chapter in the book is devoted to San Diego, and among many things, Starr completely misses the city's financial collapse. In an interview, I pointed out to him that during the late 1990s the Reader, the Transcript, and a few writers on the Union-Tribune were noting that San Diego was cooking the books, selling off assets, and neglecting infrastructure and maintenance of safety equipment to cover chronic deficits and finance corporate-welfare projects. In 2002, the local media reported on the pension crisis, which had been gathering for a decade. A historian should have picked up on this. Yet his book, which covers events as late as Governor Schwarzenegger's ascension to the throne in November of last year, didn't forecast the oncoming tsunami. In this instance, he apparently wasn't checking local media.

To his credit, Starr apologizes. "I wasn't covering it with the kind of investigative fervor" required, he says. As a partial excuse, he says the bulk of the book was completed in 2002, and a few events (including last year's San Diego fires) were inserted late last year.

From 1994 to 2004, Starr was state librarian for California. He and panel members were studying grants to be made in many cities, including San Diego. Says he, "When we did our due diligence, there were no reports of adverse financial developments from San Diego."

In short, the city hoodwinked state government, just as it fooled bond-rating agencies and local voters, while issuing fictitious bond prospectuses -- something now under investigation.

Starr hopes that his state post didn't inhibit him from seeking out the truth about San Diego finances. "I never heard it or heard it and suppressed it," he says.

This is not to say that you should avoid this book. It is an expansive -- probably too expansive -- look at the entire state from 1990 forward. Starr, a social historian, does a good job covering a number of prickly issues: drugs, gangs, racial and ethnic strife, economic woes, the dot-com bust, trade, environmentalism, and terrorism, to name a few.

San Diegans will find familiar names and institutions: Nobelist/surfer Kary Mullis; guru Deepak Chopra; ex-mayor/radio rabble-rouser Roger Hedgecock; political power broker Nick Inzunza; high school triggerboys Charles Andrew Williams and Jason Hoffman; and others from Pete Wilson and Dede Alpert to Kristin Rossum.

But read on. There are six references to the Mission Valley sports facility, Qualcomm Park. Park? It's Stadium. A company named "Sintro" fled town. It's Syntro. By 1999, the stock of telecom superstar Qualcomm "had risen to $4 billion," claims the book. Hardly. The capitalization, or the total value of the stock outstanding, had risen to $4 billion. The city was having trouble selling bonds to meet a $70 million ballpark obligation? It was $170 million, not $70 million. Former city councilmember Bruce Henderson filed 11 suits against the ballpark? It was 6; others were filed against him by the city and Padres. By utilizing aerospace techniques, XXsys Technologies had "flourished in the post-1994 earthquake-driven highway and bridge retrofitting boom," according to the book. Wrong again. The company was always deeply in the red. In 1998, it began paying employees in stock, not cash. That year, its stock was delisted and it stopped reporting results to the Securities and Exchange Commission. Caltrans said the company's technology didn't work and refused to pay. XXsys sued Caltrans for defamation. XXsys stock now sells for one-tenth of one cent a share (.001). So much for "flourishing."

The book tells us that La Jolla is a "posh suburb" of San Diego. "I know La Jolla is part of the city," says a chastened Starr. "That got by us."

These errors are only some of the small ones. The book's major problem lies in dubious interpretations. As he admits in his preface, Starr is often attacked as a California booster. This book deals with darker themes than his previous ones on California, but he admits that in writing the book he was "on the lookout" for things going right.

That's obvious. He writes about biotechs as wonder-companies -- not mentioning that very few have succeeded. In an early chapter, he deals with San Diego's first biotech, Hybritech. He notes that the company prospered and in 1986 was sold to Eli Lilly for $490 million in cash and securities. He enthuses that a bunch of insiders got very rich and went on to fund other biotechs. What he neglects to say is that, ten years later, Lilly sold the company for a sum it considered "immaterial," or not large enough to state. It has been widely reported that Lilly sold Hybritech for a mere $10 million, although Lilly won't bless that number. Starr needs balance here: biotechs are money machines for insiders and venture capitalists who get their shares for pennies each, but these companies have hardly produced the promised wonder-drugs.

The book's nadir is probably the chapter "Play Ball! San Diego in the Major Leagues." It begins with a competent review of the aerospace bust of the early 1990s. Then Starr claims that in mid-decade, to "regain its civic self-confidence, economic momentum, and public life," the city turned to telecommunications, professional sports, and the San Diego Symphony. He presents a good report on Qualcomm and the civic generosity of its leaders, particularly cofounder Irwin Mark Jacobs. He reports on the $100 million gift to the symphony of Jacobs and his wife, Joan. (It's now up to $120 million.)

But can the symphony revive civic spirit? Starr reports on its bankruptcy of the mid/ late 1990s. But he doesn't mention its crushing liability. It's "stuck with a terrible hall and everybody with ears knows it," says San Diego music critic David Gregson. "The fact that the symphony has enjoyed some astonishingly generous patronage from time to time does not reflect any civic confidence or lack thereof. Its future is still a deep mystery," although acoustic engineers "have done everything humanly possible to make the best out of a bad situation."

Pro sports? Yes, the city fell for the Chargers' and Padres' con games, and city finances are being drained as a result. Starr lets former councilmember Valerie Stallings off easy for accepting gifts from Padres majority owner John Moores. For example, Starr says Stallings invested in an initial public offering of a stock "recommended to her" by Moores. Actually, Moores put her on the exclusive friends-and-family list of a new issue of stock in a company he controlled. That means she got in at the offering price of $15 while others paid much more. It soared, and she made 267 percent in less than a month. When it hit $49.15, he told her to sell. That was within $1.10 of the all-time high.

Starr scolds Henderson for filing "nuisance" suits, although the author does say correctly that much of the blame for the ballpark's delay belongs with the Stallings/Moores investigation. The author is rough on Henderson but insists, "I saw him as a champion against the whole thing -- a gadfly, American-style activist, lonely crusader." It's clear in the book that Starr is no fan of government subsidies of pro sports; he fought against such subsidies in San Francisco.

All told, the chapter is bad, and there is a clear reason. He lists 28 news articles as sources; all but one were from the Los Angeles Times and the other from the Washington Post. The Times' San Diego reporter, Tony Perry, championed the ballpark. He insists otherwise but concedes, "I never thought the city was going to hell in a handbasket because of the sports deals." Indeed, he didn't write about the city's trip to financial hell until September 1 of this year.

"Starr relied on inaccurate and superficial reporting of the L.A. Times," says Henderson. Starr promises to make corrections in the next printing.