Malcolm’s Hard-Charging Road to Success Turns to Controversy

When he was a kid growing up poor in Chula Vista, David L. Malcolm vowed someday to be rich.

The bravado behind such a promise was not unusual. Poor kids in small, working-class towns across the nation make similar vows every day.

But, while most others have faltered, Malcolm became a boy wonder and kept his promise.

Today, at age 32, David Malcolm has used this hunger for success and a hard-charging--some say arrogant--style to lead him from the valley to the mountaintop.

With that success has arrived controversy, fueled by the very elements that have made Malcolm an over-achiever--a head-on, brash, outspoken style applauded by his supporters but which his critics contend have carried him to the edges of propriety and political opportunism.

Most recently, Malcolm has become the focus of a San Diego County district attorney’s office investigation, focusing on tape recordings in which Malcolm discusses blowing up an expensive Mission Hills house to collect more than $1 million in insurance.

Prosecutors are trying to determine whether the tapes are evidence of wrongdoing by Malcolm or whether they were used in an extortion attempt against Malcolm, or both.

The allegations are the most serious ever made against Malcolm, and since the investigation was made public, Malcolm has declined to be interviewed.

Malcolm is by his own estimate a millionaire, his wealth gained by prospecting in properties. Malcolm earned his real estate license while attending Chula Vista High School and went to work selling real estate at the age of 18.

He started with buying one house, parlaying the profits at resale into two, then four and eventually 14 rental units.

Today, he is involved in various real estate partnerships and is founder and president of Suncoast Financial Corp., a mortgage-banking company, a business he turned to in his early 20s.

Along with the wealth has come recognition and an appetite for politics. He is a Chula Vista city councilman and has become a player on a larger political stage as an appointee to the state Coastal Commission.

He counts among his friends many politicians, including Assemblyman Steve Peace, (D-Chula Vista) and Assembly Speaker Willie Brown, (D-San Francisco), who three years ago appointed him to the commission and who, Malcolm is apt to say, has an abiding interest in Malcolm’s endeavors.

Along with the money and political connections have come the trappings of the elite. He lives with his wife and two small children in Coronado Cays, an enclave of expensive homes and yachts on San Diego Bay across the water from Chula Vista.

And he has entree to places that poor kids from Chula Vista only dream about.

Malcolm spent the Fourth of July in New York Harbor, where he viewed the Statue of Liberty extravaganza from the deck of a ship as the invited guest of San Diego businessman Roque de la Fuente II and in the company of a number of Washington politicians, including Rep. Bill Lowery (R-San Diego).

Back home, it’s not the first time that Malcolm’s business and political endeavors have come under scrutiny and caused him consternation.

He publicly has threatened several times to leave politics, at least his City Council office, because of the legal restrictions and public glare it has put on his financial dealings.

For example, in October, 1985, Malcolm formed a partnership called Valley Land Co. Included in the venture was his longtime friend and political ally, Peace. Others involved were Chula Vista Mayor Greg Cox and several Chula Vista eye doctors and surgeons who had hired Malcolm as a consultant.

Valley Land Co. acquired a 48-acre piece of property in the Sweetwater River Valley just outside Chula Vista. The company approached the county in hopes of using the property for high-density condominiums.

When the county was reluctant to approve the higher density, Malcolm helped persuade adjacent National City to annex the land, pre-zoning it to a density that would allow the condominiums to be built.

But publicity about the project, its high density and the people involved prompted Cox to sell his interest and, later, both Malcolm and Peace agreed to donate their shares to charity once the land was sold to a developer.

It was not surprising that Malcolm and Peace would be business partners, as their political relationship is a strong one, despite the party differences--Peace is a Democrat and Malcolm a Republican.

The two men are more alike than they are different, and each has a similar kind of high-voltage, at times overbearing, personality. They have known one another for several years. Peace was a high-school friend of Malcolm’s wife, Annie, and through her met David.

Both ran for office in 1982, Peace for the Assembly and Malcolm for City Council.

“He’s one of the most straightforward people I know,” said Peace, noting that the same label has been applied to him. “If he disagrees with you, he’ll tell you. In the world of politics, that generates enemies.”

In 1984, Peace was instrumental in putting together a slate of three South Bay candidates who sought election to the first board of directors of UCAN--Utility Consumer Action Network--a grass-roots group formed as a consumer watchdog over San Diego Gas & Electric Co.

One of the three was Malcolm. “Assemblyman Peace was involved trying to ensure it (the candidacy) was successful,” said W.D. (Bud) Pocklington, a Navy captain and opponent of a proposed Chula Vista trash-burning plant who was on the slate with Malcolm. “He was sort of coordinating it . . . and involved in determining who should run.”

Despite Peace’s intervention, both Pocklington and Malcolm lost, though the third member of the slate, La Mesa Mayor Fred Nagel, was elected.

The Peace-Malcolm connection, which has included sponsorship of political fund-raising events, was more successful when Malcolm was nominated to the state Coastal Commission.

The entire San Diego legislative delegation endorsed Malcolm’s candidacy, but it was Peace who pushed the hardest and helped sway Brown to pick Malcolm, according to sources familiar with the selection.

Since his selection to the Coastal Commission nearly three years ago, Malcolm has repeatedly attempted to show--sometimes to his detriment--that he has cultivated a political friendship with the powerful speaker of the Assembly. On more than one occasion, he has suggested his actions as a commissioner have been at the behest of Brown.

Although Brown has appeared with Malcolm at various events, such as when he and Malcolm arrived by helicopter in May at a huge ground-breaking ceremony in Otay Mesa for an industrial park owned by De La Fuente, the strength of their political link is unclear. Brown declined to be interviewed for this story.

Several people, including lobbyists and his fellow commissioners, say Malcolm regularly invokes Brown’s name, explaining the speaker’s position on issues.

Whether it’s part of a political game of bluff or not, Malcolm’s insistence on using Brown as a political weapon has at times raised questions.

In a Sierra Club lawsuit filed against the Coastal Commission over its approval of Chula Vista’s plan for a major multimillion-dollar hotel-convention center development on the bay front, former commission Chairman Melvin Nutter--who opposed the project-- said “he had a conversation with Malcolm in which Councilman Malcolm referred to his friendship with Assemblyman Brown and urged Nutter to vote in favor of the Chula Vista (plan). Subsequent to his vote, Chairman Nutter was not reappointed to the commission by Assemblyman Brown.”

Nutter now is a lawyer in Long Beach. In a recent interview, he said Malcolm never threatened him by saying he’d be pulled off the commission.

But there’s no question, Nutter said, that Malcolm was intensely lobbying his colleagues to support the Chula Vista bay-front plan and using Brown’s name in doing so.

“He wanted people to know he had influential access to Willie Brown,” Nutter said. “There’s no question that Malcolm mentioned Willie to me . . . and that he (Brown) was concerned about the plan.

“At one point, he (Malcolm) indicated that he had heard from reliable sources that I was busy opposing the plan . . . and that it was in my best interests not to do that.

“He said I might well be receiving a telephone call from Willie Brown, and it might be well to not do any lobbying.”

Nutter said he told Malcolm that although he opposed the project, he wasn’t lobbying against it.

“He was delighted to hear that . . . and said (Sen.) Wadie Deddeh (D-Bonita) and Steve Peace would be happy to hear that . . . because he was talking to them regularly,” Nutter said.

Nutter and other commissioners interviewed say that Malcolm regularly talks up his connection to Brown.

“One of the things that David liked to talk about was his close connection with powerfully connected people,” Nutter said. “Willie Brown was someone he was talking to regularly, if you believed him.”

A Sacramento-based lobbyist, who declined to be identified, said that despite what Malcolm says, Brown is not that interested in Coastal Commission matters.

“That’s the feeling that he would like to portray about himself, that Willie is interested in what he (Malcolm) does. I don’t think that’s true,” said the lobbyist, who follows Coastal Commission matters in the Legislature. “I think the speaker finds David Malcolm to be a big pain. . . . He puts up with David Malcolm to please Steve Peace because he needs Democrats from San Diego in the Legislature.

“Willie Brown is not that interested in the week-to-week or month-to-month workings of the Coastal Commission. Once in a while, something becomes a headache, and he has to deal with it. To hear David, you’d think Coastal Commission issues were at the top of Willie’s agenda. Actually, he couldn’t be more disinterested.

“Basically, what you have is David overplaying his own importance.”

The lobbyist’s observations were affirmed by another lobbyist.

Malcolm’s tendency to lobby for his position recently got him in trouble with another commissioner, Steve MacElvaine of Morro Bay.

MacElvaine, in an unusual and angry public rebuff, denounced Malcolm for influence-peddling three weeks ago at a commission hearing.

“I just got approached by Commissioner Malcolm, who stated that apparently I have a problem with one of the lobbyists that’s involved in either this project (then before the commission) or some other project, that I’m going to get a call from a state senator on those issues,” MacElvaine shouted.

MacElvaine has refused to identify the lobbyist and state senator that Malcolm mentioned.

But several commissioners said the lobbyist is Sacramento-based Bernard Teitlebaum, whom Malcolm introduced to several commissioners before the start of the Oct. 9 hearing at which MacElvaine made his outburst.

“I was sure I was introduced (to Teitlebaum) for a reason,” said one commissioner who asked not to be identified for fear of causing more strain on the commission. “David jumped me the day before, . . . saying this is a San Diego issue and we need to put this thing through.”

Teitlebaum declined to return several phone calls.

The Oct. 9 hearing involved a proposal by Grupe Development Co., which is building an apartment complex in Carlsbad, for a refund of money it had given to mitigate the effect of developing on coastal farmland.

Donald McInnis, a coastal commissioner and former Newport Beach mayor who lives in Fallbrook, said, “David has a tendency to put his mouth in gear before he engages his mind. That’s what happened with MacElvaine.

“He needs a little bit of seasoning, yet. He’s very aggressive as far as San Diego County is concerned, and he stays fairly close to San Diego County politics.”

Others say that Malcolm has been instrumental in bringing a new level of politics to the commission, as illustrated by his habit of introducing lobbyists to other commissioners, and now more and more of the commissioners are doing much the same thing.

But Malcolm, it is said by observers and other commissioners, is not alone in making the Coastal Commission more political.

Roy Gorman, former chief counsel for the commission, who left the post in March, said he and the state attorney general’s office repeatedly warned Malcolm and other commissioners not to talk about projects outside of a public hearing because the commission is a quasijudicial body.

“During the meeting, he would talk to people at the back of the room, at the side of the room, or in the hallways. Some (discussions) may have been initiated by the project proponents, and others, I’m fairly certain that he initiated,” Gorman said.

Dorill Wright of Port Hueneme, who has the longest tenure on the commission, declined to talk about Malcolm specifically. But he said that “over the past year, the stresses on the commission working together have increased considerably.”

As for his voting pattern on the commission, Malcolm--who has one of the commission’s worst attendance records, missing 40% of the votes during the last five months--is often a swing vote.

Those who have observed him say that he is often a pro-environment vote in Northern California and a strong pro-development vote in the south, particularly in San Diego County.

Soon after Malcolm had been appointed to the commission, he cornered Ann Notthoff, a project planner for the Natural Resources Defense Council, a staunchly pro-environmental group based in San Francisco, at a hearing.

“When he was appointed, environmentalists characterized him as a developer,” recalled Notthoff in a recent interview. “He went out of his way to seek me out at the hearing. He said to me, ‘I’m not a developer. I don’t know where you got that. I’m not like that.’

“It was clear to me,” Notthoff said, who until then had never met Malcolm, “that he was sensitive to what was being said about him.”

Having seen Malcolm at work now for two years, Notthoff says of him, “I’d characterize him as an undependable vote. There seems to be no point of view that is consistently applied.”

Others are not as diplomatic. “He’s a good-guy environmentalist when it costs him absolutely nothing,” Nutter said.

Malcolm has voted the environmental line, particularly on offshore drilling proposals such as platform Gail (a project proposed for the Santa Barbara Channel near a national marine sanctuary) and platform Julius (a project off the coast near Vandenberg and near the territory of the endangered sea otter).

“My own belief is that he’s been a pretty good member,” said Commissioner Duane Garrett, a San Francisco lawyer and former national co-chairman of the Mondale for President campaign.

“He’s sometimes unpredictable on matters, but on the big-issue matters, he’s generally been there,” Garrett said.

One example of such unpredictability occurred last year when the commission voted on a controversial six-lane bypass of a two-lane section of California 1 south of San Francisco known as Devil’s Slide in San Mateo County.

Environmentalists were opposed to the inland bypass, claiming it would be growth inducing.

Malcolm--considered a pro-bypass vote--missed the first meeting, which ended in a 6-6 deadlock, including a vote lodged against the project by Malcolm’s alternate, San Diego City Councilman Mike Gotch.

The county and Caltrans later asked the commission to reconsider the matter and Malcolm voted for a rehearing.

After another daylong hearing, however, he voted against the bypass, the opposite of what both sides thought he’d do.

What few people knew at the time is that Malcolm had indeed, at least initially, supported the bypass.

“He raised the issue with me before the hearing,” said Gotch, who said he likes and respects Malcolm. “He indicated his preference (for the bypass), but he never tried to twist my arm. I simply told him my feelings on the matter.”

Gotch said he didn’t know why Malcolm changed his mind.

Times staff writer Ralph Frammolino contributed to this story.