Politics: Unreported Gifts From Padres Owner Ultimately Responsible
In her only public statement following her Jan. 29 resignation, former San Diego City Councilwoman Valerie Stallings said she decided to give up her seat “to conclude this matter for all of us.”
“I believe this decision will allow all of us to move foreword. I deeply regret the impact that this investigation has had on the city, my family, friends and staff,” she said.
Stallings, 61, had served as the representative for the 6th District, which includes Clairemont, Mission Valley, parts of Kearny Mesa, Linda Vista and Pacific Beach, for nine years. The City Council set April 17 as a special election to fill the remaining two years of her existing term.
In San Diego Superior Court last week, Stallings pleaded guilty to two criminal misdemeanor counts and agreed to pay a $10,000 fine. According to the indictment, Stallings could receive up to six months in prison, but prosecutors are recommending probation. Sentencing is scheduled for Feb. 5.
The two misdemeanors involve Stallings’ acceptance of thousands of dollars in gifts from Padres owner John Moores and not disclosing those as required by state law, and for her subsequent voting on ballpark-related matters which had a material benefit to Moores and the Padres.
The federal and state investigation, which lasted at least seven months and involved the U.S. Attorney’s Office, the District Attorney’s Office and the FBI, did not find any evidence of crimes on the part of Moores or any other council member. U.S. Attorney Greg Vega said the investigation is closed, as is the grand jury court testimony leading up to Stallings’ plea.
“It’s not a crime to give gifts to public officials but it is the legal responsibility to report those gifts so their constituents know if any relationship is on the public officials,” Vega said.
According to the indictment, the gifts from Moores ranged from signed baseballs and other Padres souvenirs to plane tickets for her mother and sister. The plane tickets were provided during the time Stallings was recovering from cancer surgery in 1996.
Other listed gifts, which Stallings did not disclose on annual financial forms every elected official must file, were the use of Moores’ Mercedes station wagon and home in Carmel; $200 toward the purchase of camera accessories; and an answering machine valued at $50.
Had Stallings listed the gifts that exceeded the minimum threshold (anything above $250 to $300 over the three years) on disclosure forms and recused herself on ballpark issues, she likely would not have been indicted, Vega said.
A Padres spokesman said neither Stallings nor Moores did anything wrong, and the gifts, particularly the plane trips for Stallings’ family, were Moores’ way of helping a friend in need.
“John does things like this every day of his life,” said Bob Vizas, the Padres’ in-house attorney. “It’s the furthest thing in the world from bribery.”
The initial evidence triggering the investigation was Stallings’ stock transactions in Neon Systems, a software company based in Sugarland, Texas, which Moores is chairman and a majority owner.
But federal prosecutors said the illegalities were Stallings’ alone, and that they did not have sufficient evidence to charge Moores with any violations of federal securities laws, or insider trading. Prosecutors, who consulted with investigators at the Securities and Exchange Commission, said there was no evidence that Moores provided material, non-public information to Stallings.
Stallings disclosed her investment in Neon on her 1999 disclosure statement under investments, but did not disclose the information on the income part of the forms.
According to the indictment, after Stallings inquired about the Neon IPO in February of that year, Moores intervened and put her name on the “friends and family program,” allowing her to purchase the stock at $15 on March 5. The lowest available price on the first trading day was $20.75.
Stallings sold 75 shares of Neon on March 11, making a pretax profit of $1,869. On March 31, following a telephone call she had with Moores, she sold her remaining 275 shares at the near peak price of $49.15. The pretax profit on the transaction was $9,391, according to the indictment.
Stallings purchased 425 more shares of Neon in November 1999, at $23.25 per share but held them until Jan. 23, 2001, when the price had fallen to $7.18, thus taking a pretax loss of $6,933.
Former councilman Bruce Henderson, a longtime ballpark opponent, said he wasn’t satisfied with Stallings’ plea bargain, saying there may be other elected and appointed officials who accepted gifts from Moores, and did not disclose all of them or their true value.
He said a major focus of one of his clients’ lawsuits pending in Superior Court is the extent of Moores’ gift-giving, and whether other officials’ votes on the ballpark were corrupted.
“This is a plea bargain, and the result of a bargaining process,” he said. “I still believe there are other gifts (the prosecutors) didn’t explore.”
