San Diego: Big Benefactors Become Bad Guys

BERKELEY —  At the UC San Diego campus in La Jolla, Bruce Nauman’s giant neon sculpture “Vices and Virtues” spells out a sin every 2.5 seconds, in letters seven feet high: PRIDE, AVARICE, LUST, ANGER, GLUTTONY, ENVY, SLOTH. Nauman’s artwork has been wrapped around an engineering building and not, as in the original plan, installed at the lofty and conspicuous intersection of La Jolla Village Drive and Torrey Pines Road. The university’s affluent neighbors really preferred not to see the night sky lit up with the Seven Deadly Sins.

For San Diegans, hanky panky in the highest places, among the most celebrated citizens, has become almost an everyday expose. It was deja vu all over again last month when financier Richard T. Silberman was arrested by undercover agents at the Hyatt Islandia Hotel and accused of conspiring to launder $1.1 million in Colombian drug money or, to be exact, $1.1 million belonging to the FBI that had been represented as being Colombian drug money. In recent years they had seen the jailing of C. Arnholt Smith, once called “Mr. San Diego of the Century,” the exposure of the $200 million J. David & Co. investment fraud, the conviction on perjury and conspiracy charges of Mayor Roger Hedgecock. Now this. Had the former fast-food magnate (Jack-in-the-Box) and state finance director (under Edmund G. Brown Jr.) been entrapped? Was he leading a double life?

The city reacted with the usual mixture of shock, disbelief, determined judiciousness and Schadenfreude.

“Yes, the pillars of our community do have a habit of tumbling” is how one prominent citizen put it with a certain somber satisfaction.

Scandals in San Diego tend to ramify, in a small-town way, until everybody in sight has been entangled or at least embarrassed: Democrats and Republicans, developers and anti-growth zealots, establishmentarians and insurgents. Silberman, for example, is married to San Diego County Supervisor Susan Golding, a Republican. He used to be an escort for Union-Tribune publisher Helen Copley. His former partner in fast food and banking, Roger Peterson, is married to Mayor Maureen O’Connor, a Democrat and Copley’s good friend. Once close to Republican Senator Pete Wilson, Silberman moved on to become one of Jerry Brown’s courtiers--at the time, in the mid-’70s, a promising line of work.

Lewis H. Lapham has remarked that to say, “Yes, but I did it for the money” may one day be sufficient explanation for doing almost anything. Only the most obtuse moralist could fail to understand.

There can be few places where America’s romance with money in the 1980s is more torrid than in San Diego, where, in terms of Nauman’s minatory neon, sloth is out, anger bad for the career, gluttony unspeakable and lust life-threatening; but pride and avarice have taken on the colors of Utopia. And envy is the spur. To think otherwise is to embrace the “anti-business, anti-success attitude” that Ronald Reagan so eloquently warned against. The marketplace is magic, and avarice guides the invisible hand.

The FBI’s affidavit on Silberman treats money as a kind of magical cult object. In one dramatic scene, $100,000 arrives at the Los Angeles Airport Hilton Hotel. After being gift-wrapped and hidden inside a laundry bag, it rides away, locked in the trunk of a black 1988 Mercedes 450 SL. In another, a package of bills totaling $50,000 is gingerly passed by Silberman to reputed gangster Chris Petti as they sit at the counter of a Denny’s at Ninth and Ash. Well, waitresses at Denny’s have seen weirder things.

By the time Silberman is arrested, $300,000 has somehow been alchemized into shares of Yuba American Gold, part of Yuba Natural Resources, a forlorn-sounding gold- and silica-mining company in Marysville; Silberman’s luckless partners in this venture are Charles Manatt of Manatt, Phelps, Rothenberg, Tunney & Phillips and hotelier M. Larry Lawrence.

Many San Diegans still believe that a remorseless Establishment did in former Mayor Roger Hedgecock, for sins that would have been overlooked in someone more compliant. At least in the J. David affair, which ultimately brought him down, the alchemy was on a grand scale. This was, in brief, a Ponzi scheme; J. David Dominelli is now in federal prison, and his associate Nancy Hoover Hunter, a former mayor of Del Mar, awaits trial to determine whether she was a witting accomplice. Altogether about $200 million passed in and out of J. David’s offices in La Jolla, ostensibly bound for exotic locations--the computer ether where international currencies are traded plus banks in Montserrat, London, and Lugano.

Yet very little of the money reached those places. Fifty million dollars, personally squandered by Dominelli and Hoover, stayed in San Diego and was transmuted into Porsche 928s, Alfa Romeos, Maseratis, Jaguars, Ferraris, an estate in Rancho Sante Fe and 16 other pieces of real estate, a racing stable, a triathlon team, plus numerous amulets and icons of the good life. Among many other cultural benefactions, J. David donated $162,500 to the Mandell Weiss Center for the Performing Arts at UC San Diego; until the neighbors complained, that was the building the university planned to adorn with “Vices and Virtues.”

Eighty years ago Henry James visited San Diego. He stayed at the Hotel del Coronado, which now belongs to Larry Lawrence. To the eyes of the great expatriate, his fellow Americans at the turn of the century seemed to be “dancing, all consciously, on the thin crust of a volcano.” What was wrong? “There was money in the air,” he decided, “ever so much money. To make so much money that you won’t, that you don’t ‘mind,’ don’t mind anything--that is absolutely, I think, the main American formula.”

By the exacting standards of New York or Los Angeles, San Diego’s scandals do not involve ever so much money, but there is money in the air: real estate money, drug money, and merely hypothetical money in the minds of natives and newcomers whose resumes are often exercises in constructing their own realities. Jerry Dominelli was a middle-aged nonentity until he set up shop in the basement of a Mexican restaurant on Prospect Street and blossomed into an oracle. Under indictment, Nancy Hoover Hunter climbed sturdily from the wreckage of J. David to a grand house in Montecito. Roger Hedgecock, out on bail, conducts a popular radio talk show.

The ancient Southern California “boom-cycle” mentality has been refined by New Age self-fashioning and the Reagan Era doctrine of conspicuous consumption as a sign of grace. In this Eden, the past is a foreign country from which money is the passport.

According to a telephone poll conducted by The Times in February, the citizens of Los Angeles are brooding about the quality of life in their city; 50% of the respondents indicated they had considered leaving the area. Most of them imagined life would be better in San Diego.