Councilman in Extortion Probe Secretly Wired

David L. Malcolm, Chula Vista city councilman and a state coastal commissioner, was wired for sound by district attorney’s investigators earlier this year to secretly record conversations with a man he claims was trying to extort him in connection with the possible arson of a Mission Hills home, Malcolm’s attorney said Monday.

But the tapes made by Malcolm failed to turn up sufficient evidence of any extortion plot by William M. Hirsch, who was advising Malcolm and Malcolm’s business partner, Dennis Schmucker, on how to remodel the Mediterranean-style villa on Presidio Drive, according to a source close to the investigation. Malcolm and Schmucker had taken over the home by foreclosing on a loan they made to a trust for which Hirsch was the agent.

Last week, Hirsch turned over to the San Diego County district attorney copies of his own secretly recorded tapes of conversations with Malcolm in January and February, 1985, during which the councilman discussed blowing up the house to collect more than $1 million in insurance.

Investigators are now trying to establish whether the tapes prove any wrongdoing by Malcolm, or whether they are part of an extortion plot by Hirsch, or both. District attorney’s spokesman Steve Casey on Monday said he couldn’t predict how long it would take before prosecutors knew which direction the investigation would take.

Malcolm and his attorney, Charles Goldberg, have said that Hirsch was trying to use the tapes to extort money. Malcolm told the district attorney’s office about the alleged extortion six months ago, and investigators wired the politician several times, beginning last May, to record conversations with Hirsch, Goldberg said.

Goldberg said that the tapes made by Malcolm under the direction of the district attorney’s office show “Hirsch’s continued extortion demands and threats.” Prior to one meeting, however, Hirsch “patted Malcolm down” and found a tape recorder, Goldberg said. “I think that was probably the last” meeting.

Those tapes failed to prove extortion, however, according to a source close to the investigation, who asked not to be identified.

Hirsch could not be reached for comment, but his attorney, Michael J. Aguirre, said that he was “not aware” of any tapes made by Malcolm.

“I wish that he would put in a request to get copies of them and release them,” Aguirre said. “It doesn’t sound to me like there was too much evidence there for extortion, if Mr. Hirsch hasn’t prosecuted for extortion yet.”

Malcolm and Schmucker took over the home in early 1984 when they foreclosed on a $450,000 loan they made to the owner, Chittenden Trust. Hirsch represented the trust and coordinated the remodeling of the home. Aguirre said Malcolm and Schmucker made an oral agreement with Hirsch that allowed him to retain an interest in the property.

Malcolm has said he was leading Hirsch on during the taped conversations in which arson was discussed. No attempt was made to destroy the house.