Stein’s Default Won’t Slow Him as Party Activist, Democrats Say

All winter long, rumors had circulated in Orange County political circles that Laguna Niguel developer and Democratic fund-raiser David Stein was in financial trouble.

As the story went, Stein, the 38-year-old promoter of a dazzling, 550-acre development called Monarch Beach, might be defaulting on a critical loan.

On Wednesday, the rumors became official. The Stein-Brief Group, a partnership of Stein and builder Barry Brief, had failed to make a $4.3-million interest payment due in December. The partners were in default on a $49-million loan from San Diego-based Avco Community Developers and were reportedly trying to restructure their debt on the prime coastal property between South Laguna and Dana Point. But if Stein is experiencing financial trouble, it hasn’t affected either his activist style or the Democratic Party of Orange County, Stein’s friends and political associates said Wednesday.

Stein could not be reached for comment but his colleagues reeled off a long list of political activities the developer has been involved in during the past six months. And rather than drop out of politics to resolve his business problems, Stein will remain the activist, they predicted.

“David is a major league fund-raiser and organizer,” said Michael Ray, chairman of the Democratic Foundation, a county fund-raising group that Stein helped form. “. . . I don’t think he’s going to be affected by it--other than a bruised ego.”

During the last six months, Stein helped raise money to retire Colorado Sen. Gary Hart’s debt from his 1984 presidential race, became an active co-chairman and fund-raiser for Superior Court Judge David O. Carter’s bid for Congress and helped organize a political roast that raised $25,000 for a Democratic voter-registration drive.

In addition, he has continued to attend board meetings of the Democratic Foundation of Orange County, the California Democratic Party and, in Washington, the Democratic National Committee, Stein aide Christopher Townsend said.

Also, after the Pro-Peace march for disarmament disbanded in March and left many of its marchers stranded in the Mojave Desert, Stein invited the remaining marchers to use two phones and an office at the Stein-Brief Group headquarters for their reorganized Great Peace March for Disarmament.

And as founder of the newly formed Monarch Institute, a nonprofit educational foundation, Stein recently contributed more than $100,000 toward the current year’s budget, the institute’s newly hired executive director, Paul Freeman, said. This year’s program will include lectures and symposiums on such topics as terrorism and Mexico-U.S. relations, Freeman said.

“Has Stein pulled back? To the contrary,” said Bruce W. Sumner, chairman of the Democratic Party of Orange County. “He’s been extremely active--in the Gary Hart campaign, in the peace march,” and in national and local Democratic politics.

Sumner said that the Stein-Brief loan default “doesn’t do anything to the Democratic Party. That happens every day to a lot of people . . . . I don’t see how it will have any effect.”

He added that Stein’s problems are typical of most of the developer-friends he has known. They often are “rocketing around,” Sumner said. “One time it’s chicken (to eat), one time feathers.”

Howard Adler, a former county party chairman, agreed, saying: “I don’t think the reporting of David’s financial problems will have any effect on the (Democratic) Foundation.”

As a fellow developer--Adler builds shopping centers--the former chairman said he understood the “ups and downs in real estate. I’ve been there many times myself and it hasn’t in any way diminished my involvement in the party. . . . Sometimes when (a) company’s finances aren’t doing well, you still personally have the financial ability to be very involved” in party politics,” Adler said.

sh Acting as Proxy

Stein aide Townsend, 24, said he would be attending the California Democratic Party board meeting this weekend in San Francisco as Stein’s proxy so that Stein can focus on business.

But “this meeting is not terribly important,” Townsend said. Besides, he added: “We’re a team. So people know that talking to me is like talking to Stein.”

Townsend added that Stein planned to continue using his contacts to invite Democratic leaders to Orange County. San Antonio Mayor Henry Cisneros and Joseph P. Kennedy III recently addressed Democratic Associates of Orange County, another group Stein founded, largely because of Stein’s connections.

“One of our biggest roles was to bring more people in. . . . We will continue that role,” Townsend said.

He added: “I don’t see our role really diminishing. And even if for some reason, in the final course of affairs, we can’t see as much as we would like, it’s absurd to think the activity of the (Democratic Party) sloughs off. That was the point of (starting) the Democratic Foundation--to expand the base.”

Of a dozen Stein associates queried Wednesday, only one said he had noticed an impact from Stein’s business difficulties.

“I don’t get to talk to him as much as I’d like” because of the financial troubles, Freeman said. “Particularly the last couple of months, I’d just like to talk to him more. He thinks big and has great ideas.”

But like Stein’s other associates, Freeman said he was confident that the developer would successfully restructure his debts. “I trust David Stein,” Freeman said.