The return of the Chargers scandals

Having been hornswoggled by both the Chargers and the Padres, and knowing the City is wobbling financially, San Diego voters are unlikely to approve a fat subsidy for a new Chargers stadium. But downtown overlords want the City to get diddled again. So learn from the past: make sure the preelection voter information is honest, and pay no attention to propaganda from the City, the team, the establishment, and their lackeys in the mainstream media.

That’s the advice of former councilmembers Bruce Henderson and Donna Frye, who fought to educate the public about the Chargers’ 60,000-seat guarantee and the Padres’ Petco Park con.

“San Diego likes getting snookered,” says Henderson. “But it will be difficult to snooker the voters.”

“If there were a way to shut the public out, yes, the powers-that-be could be snookered again,” says Frye. “But it’s hard to imagine a deal going through that would not require a public vote. I place a lot of faith in the public. The odds are not in favor of the sports folks.”

But last week, Mayor Jerry Sanders made the preposterous statement that San Diego’s budget woes are over, despite massive pension liabilities and infrastructure deficits. It’s a sure sign that the stadium propaganda mill is picking up steam.

Take a look at the lies and corruption that went into past Padres and Chargers deals. As Steve Erie, University of California San Diego political scientist, explains in a paper he coauthored, the old Jack Murphy Stadium was renovated for the Chargers, and the City gave the team a 60,000-per-game seat guarantee, promising to pay for the empty seats, even though past attendance records showed that level was absurd. It cost the City $36 million between 1997 and 2004 and enraged the public. So when the Padres angled for a new ballpark, “The City didn’t want to be snookered again,” says Henderson.

It hired two out-of-town consultants, both of whom were in favor of pro sports subsidies. They were charged with making a deal that was fair for both sides. But John Moores, then majority owner of the Padres, on June 18, 1998, wrote a letter to the council wailing that under the consultants’ deal “the Padres would be burdened with one of the worst deals in Major League Baseball” and could not be competitive financially or on the field.

So the council fired the consultants, went into multiple closed sessions, and gave the Padres everything they wanted. Erie points out that the $303 million subsidy the Padres wangled was 25 percent more than the average ballpark taxpayer contribution across the country.

The pigeon drop was in place. There would be a vote in late 1998. Moores stacked the team that year and it won the National League pennant. The players begged the public to vote for the ballpark. The ballot argument claimed that the deal would be revenue neutral. (It later came out that city hall had instructed bureaucrats to rig the numbers to make it appear that hotel taxes would pay for bond servicing.) A consultant study touting the ballpark ignored the “substitution effect,” the truism that subsidized stadiums don’t stimulate spending but just rearrange it.

The grand jury warned that the public had not been given adequate information and the economic projections were extremely optimistic. Disingenuously, the City delayed release of the report until the day before the election, and then the Union-Tribune chopped up and buried the story. The voting public was ignorant. After the Padres won the vote by a 60–40 margin, Moores dumped the star players, including those who had parroted the line that the team could not compete without a new stadium.

In 1998, almost everybody believed that San Diego was financially healthy. The Securities and Exchange Commission later revealed that high-ranking City officials knew of the financial difficulties in 1997, said Mark Hitchcock, who wrote a report on the fiasco while a student at the University of California Berkeley School of Law. Similarly, a study commissioned by the council concluded that City officials hid negative information to avoid interfering with the 2002 ballpark bond offering, which was sold at a staggeringly high 7.66 percent interest rate.

Scandal after scandal hit. Moores showered lavish gifts on then-councilmember Valerie Stallings, including an insider stock tip on a Moores-controlled company that brought her a nifty 267 percent profit in less than a month. San Diego law enforcement became the laughingstock of the nation’s legal community when Stallings got a wrist slap and Moores got off completely, as the then U.S. attorney said there was nothing wrong with giving money to politicians (even when that politician is providing favors in return). The records were sealed. The ballpark was delayed. The Securities and Exchange Commission charged officials with fraud for misrepresenting the City’s financial stability to bond investors. A New York Times headline called San Diego “Enron-by-the-Sea.”

The Padres did not deliver on promises they had made — such as for an office park and retail establishments near the ballpark. Moores did not arrange to build the number of hotels he had said he would. Under the original memorandum of understanding, such significant changes in plans should have sent the ballpark question back to the voters. But the Padres prevailed in court, as they did in almost every lawsuit heard by friendly and sometimes corrupt judges.

The Moores high card was to say that if he didn’t get his way, the team would be moved. That’s a standard ploy in maneuverings to get taxpayers to subsidize billionaire pro sports team owners.

As part of the ballpark project, Moores got land at very low prices and sold it to developers. They built condos and hotels that have still not attracted people. Moores is selling the Padres in stages; the team is playing poorly and has one of the lowest payrolls in baseball. Attendance is worse than it was in the last several years at the stadium now named Qualcomm, where Moores said it could not survive financially. The ballpark is an annual $14 million to $22 million drain on the City. Moores raked in $700 million to $1 billion on the real estate deals, according to reliable estimates, and rode off to Houston, chuckling.

“In the history of baseball, nobody has given away as much,” says Henderson. Now the potentates want a rerun.