David Malcolm: A Plant's Power Over a Man's Life

A Plant's Power Over a Man's Life
December 19, 2010
by Liam Dillon

The man with the troubled past walked into the downtown San Diego elevator.

In itself, this incident wouldn't be notable. The man walks into lots of downtown elevators. His bank is downtown. So is his business and the top-floor, invitation-only private club he attends where you have to wear a jacket at dinnertime. He lives downtown, too.

This time people noticed. They were about to walk into a meeting on the source of one of the man's greatest triumphs and greatest troubles.

The man in question, David Malcolm, wasn't invited to the meeting.

It had been more than 10 years since Malcolm put together a $100 million deal to buy 165 acres of bay-front land without cash or credit. A man accustomed to crafting big land deals for private gain did this one for the public, snagging one of the few undeveloped urban coastal parcels in Southern California.

"It could possibly be one of the single best financial deals done in the state of California's history," Malcolm said.

It had been more than five years since the deal became the noose that hung his public career and, according to a close friend, nearly killed him. Malcolm pleaded guilty to a felony conflict of interest charge after it was revealed his company was working as a $20,000-a-month consultant for the land's tenant and he didn't leave his public position. Despite the plea, Malcolm maintained that he's innocent or, at worst, an innocent victim. He even successfully fought to get the charge reduced to a misdemeanor and the conviction expunged from his record...

Ever since he became a Chula Vista city councilman 28 years ago, Malcolm's public life and his life as a real estate wheeler and dealer rarely has been without controversy. For 20 years, all the allegations against him — including one in which he was accused of plotting arson to collect insurance money — came to nothing.

Then the power plant happened. The deal Malcolm brokered as chairman of the Port turned over the plant's operations to Duke Energy, a power company in North Carolina. Duke, in turn, hired a company Malcolm ran for $20,000 a month to try to make similar deals happen elsewhere. In essence, Malcolm began working for a major Port tenant.

Malcolm stayed on the Port, which was negotiating tax breaks for businesses, like Duke, operating on Port lands in the South Bay...

Instead, Malcolm was sentenced to 120 days in a county-lockdown facility, probation and almost $300,000 in fines and court fees. His public career was over.

But Malcolm didn't leave the issue alone.

He sued the Port unsuccessfully over its legal advice. Three years after his plea, Malcolm won a fight to get the charge reduced to a misdemeanor and the conviction expunged from his record. The topic remains raw. Malcolm speaks in extended monologues about the case's arcane details...

[Maura Larkins' comment: I have a sense that plenty of public officials betray the public trust even more than Malcolm did, and they never get called to account. For example, Juan Vargas took a lucrative job with an insurance company right when he left his job on the California Assembly insurance committee. And then the voters returned him to office a few years later!

Also, Duncan Hunter is famous for warm relationships with military contractors. I also have sympathy for Malcolm's disgust with public entity lawyers. It seems that they are often chosen because they tell officials they can help them get away with ignoring the law.]

With Malcolm was his cousin Dan Malcolm, an incoming Port commissioner from Imperial Beach. David Malcolm said that he and Dan were "very close," according to a Port memorandum on the conversation. The memo added the environmental director felt uncomfortable discussing the power plant and the conversation ended.

"This information is included only for public disclosure and to avoid any appearance that the District has been cooperating or in any way engaged with David Malcolm on matters related to the South Bay Power Plant," the Port report states.

It's not just future development that's at stake. There's about $60 million set aside to pay for the plant's demolition. The Houston-based company that currently owns the plant, Dynegy, pays the Port rent. Dynegy also is for sale.

The city of Chula Vista wants in, too. Its leaders were the ones who contacted Malcolm, Peace and other South Bay leaders over the summer to get the plant down. Malcolm and Peace helped arrange a meeting with state regulators this fall to push for the plant's closure.

"I had a choice of saying, 'Oooh, I'm not going to call David Malcolm,'" said Chula Vista Mayor Cheryl Cox. "Why wouldn't you call someone who knows as much about it as he does?"...

Last week, that ask came. A Chula Vista councilwoman emailed Malcolm, Peace and others requesting advice for responding to the Port's latest demands...

[Maura Larkins comment: Was that councilwoman Patricia Aguilar?]

Convicted of a Felony, But Not a Convicted Felon

July 5, 2006
Convicted of a Felony, But Not a Convicted Felon
Voice of San Diego

You'll remember my question about the little present former Port Commissioner David Malcolm received last week from Superior Court Judge John C. Einhorn. In 2003, Malcolm pleaded guilty to violating the state's law against public officials participating in deals in which they have a personal financial interest. He was sentenced to three years probation and he had some fines and other economic penalties.

Like many people who finish their probation time, Malcolm asked the judge to expunge his record. Einhorn agreed and gave Malcolm one more little benefit - he ordered Malcolm's charge to be lowered from a felony to a misdemeanor and then expunged.

I wondered what the deal was. Did this mean that, like Britney Spears' first marriage, Malcolm's conviction was successfully annulled? Does it mean that Malcolm is no longer a convicted felon?

I called the district attorney's prosecutor in the case, Stephen Robinson. He said, essentially, that no, Malcolm is no longer a convicted felon, but he was still convicted of a felony.

My brain exploded after we talked but let me try to put this puzzle together:

Malcolm's recent pardon allows him to have the benefits and privileges that we non-felon citizens enjoy: to vote, to run for office, etc. But Robinson said that certain benefits won't be available to Malcolm. For instance, he can't carry a firearm.

"If, four years from now, I was going to run his criminal record sheet - his rap sheet - it will be there. It doesn't disappear," Robinson said about the criminal conviction. He said that if he was investigating Malcolm again, he could use the "rap sheet" to argue that Malcolm has a history doing such and such.

Now, apparently, it's a normal thing for someone to complete his or her probation and to ask the judge to expunge the record as such. If it's not normal, let me know.

But what's really interesting is the second part of this deal: that Malcolm had his charge reduced to a misdemeanor before it was expunged.

I asked Robinson if Malcolm could now argue that he was never convicted a felony, but, instead he was convicted of a misdemeanor.

"I suppose he can say that. I just look at it from my perspective, which is from the criminal-justice perspective. The conviction still stands," Robinson told me.

My brain just exploded again thinking about it.

Robinson, for the record, had argued strongly against the judge allowing Malcolm's charge to go from a felony to a misdemeanor.

His reasoning seems pretty logical: While a port commissioner, Malcolm agreed to become a paid consultant to Duke Energy and he agreed to put the interests of Duke Energy above those of the Port District.

From the DA:

While actively participating in Port District business that directly benefited Duke Energy, Malcolm was being paid $20,000 each month.

So, it wasn't as if he were urinating in public or committing another such misdemeanor violation. This is a heavy accusation to which Malcolm pleaded guilty.

Again from Robinson's brief:

While occupying this position of trust, he betrayed the people of San Diego for his own pecuniary gain. Malcolm's behavior cannot be described as one or two mistakes. It similarly was not a series of errors that took place over a short period of time or in haste. Rather, Malcolm deliberately and methodically engaged in a course of conduct that put the interests of the people of San Diego second to his own financial interests.

Again, it doesn't appear to be a misdemeanor offense.

I called the judge, who referred me to Malcolm's own court filings. When I get them, I'll share them. We still, after all, are left with important questions: If it's true, as Robinson said, that Malcolm's conviction will always haunt him as a felony, then why would Malcolm want it to be reduced to a misdemeanor before it was expunged? What's the point?

"I'd have to ask him what motivated him to take that two-step process," Robinson said.

- SCOTT LEWIS