Border Dreamer : San Diegans Call O.C.’s Man’s Plan for Binational Authority Crazy

When it comes to talking about Mexico and its economy, few can match an Orange County financial consultant with the decidedly Anglo name of Samuel Copeland Palmer IV.

He knows the number of Mexicans who read comic books each week (85 million), as well as the availability of telephones (three for every 100 people). He can wistfully describe his childhood vacations on a Baja California ranch, wax philosophic about Mexico’s spiritual ties to the land and speak enthusiastically about the economic potential of the country’s relatively young population (half are under 18 years old).

Yet, for all of his knowledge, there are those who want Palmer to shut up and go away.

The reason is his grandiose plan to create a binational authority that would coordinate government efforts and raise cash to help solve the chronic problems of pollution, inadequate roads, traffic congestion and broken-down sewers along the border--problems that Palmer says will eventually sap the economic potential of border industry.

Palmer’s plan, embodied in a bill working its way through the Legislature, has angered many San Diego government and business leaders who view the proposal as meddling in their painstaking efforts to forge economic ties with their counterparts in Tijuana and Baja. Openly suspicious of Palmer and his motives, the San Diegans are maneuvering to kill the bill, which comes up for a crucial vote this week.

“I was hurt,” Palmer said recently about the San Diego reaction. “I’m a sensitive person and a very idealistic person and I was crushed.”

“Just because I live in Orange County, I was viewed as this monster that intervened in San Diego,” he said. “I couldn’t believe that someone who had spent hundreds, if not thousands, of hours and his own money (on the idea) was regarded as an outsider.”

But he is. And some San Diegans say they don’t know what to make of the 31-year-old Palmer, except for the fact that he is stubborn.

“We don’t know who he is and where he came from,” said Dan Pegg, president of the nonprofit Economic Development Corp., a private group that works closely with Mexican businessmen and officials. “Although he may be well-intended, his persistence on this bill is counterproductive and distracting a lot of energy that could be put to good use.”

Palmer insists his motives are pure and that he’s looking for a way to tap the economic potential of Mexico, which he considers his second home. Reared in the privileged neighborhoods of La Canada Flintridge in northern Los Angeles County, Palmer said he and his family spent weekends and vacations during his childhood at their 2,000-acre, eucalyptus-lined ranch in San Antonio de las Minas, in Baja California Norte.

His excursions, he says, left indelible impressions of the contrast between the affluence of Southern California and the poverty of his Baja vacationland.

“We passed a thousand times through the abject poverty of the transient shantytowns that choked and festered in the smoking fires of garbage and sewage that paralleled the lower side of the fence that ran along the international crossing,” Palmer wrote in a paper about his impressions. “There, in those hideous encampments, children played among dead animals and scrap houses made from cardboard. That part of our weekly journey sickened me.”

Yet there was enchantment. Life was simpler, the people gentler than in his Anglo realm, which included playing water polo as a student at the exclusive Harvard School in Los Angeles. He said his affinity for Latin America was so strong that, at 17, he spent several months as a volunteer paramedic in Nicaragua.

While attending UC Davis, where he was graduated in 1982 with a degree in agricultural economics, Palmer demonstrated a continuing interest in developing countries. A former professor remembers how Palmer made his mark on a government-funded project to study Egyptian flower growers. Palmer was the one who perceived a fatal flaw: the Egyptians were growing dainty varieties that wilted before arriving at European markets.

“If you ever worked with him, you would never forget him because he always exceeded your expectations,” chuckled Lee Garoyan, now director of the UC system’s Center for Cooperatives. “I don’t know what he’s proposing now but I’m kind of laughing. . . . He was always very innovative.”

After moving to Fresno, Palmer became a financial adviser at Merrill Lynch while working on his master’s degree at Fresno State. Living in the hub of the San Joaquin Valley, he was perfectly poised to establish himself as an expert in the big business world of California agriculture.

But Mexico, it seems, wouldn’t let him go. One day, Palmer said, a family friend and Baja landowner named “Uncle Luis” telephoned the budding economist and invited him to a seminar in Monterrey, Mexico, about the booming maquiladora industry.

Touted as a godsend for a struggling Mexican economy, the maquiladoras are foreign-owned border plants that tap the plentiful supply of cheap labor south of the border by hiring Mexican workers to assemble and manufacture goods later sold abroad.

To many, the maquiladoras are the best of all worlds. They employ Mexican workers. Since the workers are paid in American dollars, it helps the Mexican government ease its foreign debt. American and foreign manufacturers keep their production costs low. Border cities such as San Diego reap secondary benefits by selling supplies, making repairs and building warehouses for the plants on their side of the border. As an added bonus, studies show the Mexican workers spend about 50% of their wages on American goods.

There are now 600 plants in Tijuana employing about 65,000 Mexican workers. About 42% of the plants use warehouses, distribution or other facilities in San Diego.

The glittering promise of the maquiladoras, however, has been tarnished by chronic border problems. As plants proliferate, public and private improvements to support them cannot keep up, leaving a woeful lack of adequate roads, water pipes, sewer mains, border crossings, cheap utilities, reliable telephone connections and housing.

Perhaps the most notorious problem is the millions of gallons of raw sewage that spill daily from Tijuana’s antiquated sewer system and onto San Diego beaches.

The problems are compounded by the fact that any solution must be struck among two countries, two states and a patchwork of local governments. The result has been years of international inaction.

It was the kind of puzzle that appealed to Palmer, who said he saw in the maquiladora mess the grander challenge of unlocking Mexico’s economy. That seminar three years ago, he says, sparked an obsession that prompted him in 1988 to move from Fresno to Newport Beach. After taking a $120,000-a-year job with Smith Barney, where he learned about public finance, Palmer said he quit and became a $39,000-a-year consultant so he could dedicate more time to his border passion.

Palmer said his quest led him to statistical gems about Mexico: It sometimes takes 15 to 20 tries before making a long-distance telephone call to Mexico. One million Mexicans will turn 18 between now and the end of the century. By the year 2000, more than 1 million Mexicans will be employed in maquiladora plants, which will add $10 billion to the economy. Public sector deficit is down from 12.3% to 5.8%.

The major find, Palmer said, was a book published in November, 1988, by the Bilateral Commission on the Future of United States-Mexican Relations, a now-defunct panel run out of UC San Diego. Among the recommendations was the idea of “a binational authority on border affairs.”

Palmer took up the cause. He chatted up the bonding authority to strangers. One of them, Irvine real estate attorney Doug Davidson, said he met Palmer and his one-man campaign during a weight-lifting workout at the Pacific Club in Newport Beach.

“He said, ‘I’m playing around with something that’s kind of neat and maybe you would want to get involved,’ ” recalled Davidson, who eventually agreed to help Palmer promote the border agency idea.

Meanwhile, Palmer said, he had only limited success with his first sortie into San Diego.

It is not surprising that Palmer’s first trek there caused little more than yawns. Not only was he viewed as an outsider from Orange County, but his big-fix approach was vastly different from the years of working through official channels and trying to solve the border problems via painstaking alliances and negotiation.

Indeed, Palmer’s campaign came on the cusp of some promising signs for San Diegans. Most important, the federal government was planning for a $200-million treatment plant to catch and neutralize the flow of Tijuana sewage.

But Palmer would soon get San Diego’s attention. Using his father’s connections, he persuaded an influential state legislator to introduce a bill in March, 1989, establishing a binational bonding authority for the border.

The measure, introduced by Sen. Ken Maddy (R-Fresno), alarmed San Diegans because it gave something called the California and Baja California Enterprise Zone Foundation unusual powers to condemn property, impose taxes, charge tolls and appoint a number of members to its own board.

The San Diegans hit the roof, however, when they learned that the CABEZA Foundation was under the direction of Palmer, who had incorporated the entity the same month that Maddy introduced the bill.

“Mr. Palmer has been pursuing this thing for two years and several groups have asked him for specific projects and financial models to show how this program would work,” Pegg said. “Because he has not been forthcoming, there’s a great deal of suspicion.”

Although he concedes that he makes some money advising businesses about prospective investments in Mexico, Palmer insists he has no personal stake in the border authority idea. The intention of CABEZA, he claims, was simply to make sure the private sector had input into which border projects would be funded.

“You’re just going to have to trust me,” he said. “It’s all altruistic. If you knew how much I struggle each month to pay my bills, you would trust my assertion of altruism.”

Occasional evasiveness like that has continued to fan suspicion, especially in the wake of a second border authority bill that surprised San Diegans in November, 1989. The author, Assemblyman Richard Polanco (D-Los Angeles), and his staff have discussed provisions of the measure with Palmer, but they adamantly deny he is behind the bill.

Pegg, the San Diego Chamber of Commerce and city representatives are unconvinced. They are fighting the measures so ferociously that Maddy announced earlier this year he would all but abandon his measure. Polanco has continued to push his bill and his measure comes up for a crucial vote in an Assembly Ways and Means Subcommittee on Wednesday.