S&L; Figure Claims Poverty but Runs Up Big Tab : Finance: Oldenburg, facing charges of looting thrift, said he was indigent and needed a public defender. At the same time, he was staying in a $6,000-a-night hotel room.
Accused savings and loan looter J. William Oldenburg may not be living in the lap of luxury any longer. But he was able to drop by for a visit last week.
On the day Oldenburg filled out a statement claiming to be indigent and in need of a public defender to represent him in his legal battles, he was staying in perhaps the grandest hotel suite in the country--the $6,000-a-night Ben Swig Suite at the Fairmont Hotel atop Nob Hill.
With tax, that’s $6,600.
“It made my blood boil,” prosecutor Joseph Russoniello said Friday after learning that Oldenburg stayed in the suite, which is usually reserved for heads of state, captains of industry or celebrities at the height of their popularity.
But in a hearing Friday, U.S. District Judge Eugene Lynch noted that Oldenburg has not been paying his lawyer, Joseph Alioto, and permitted the former San Francisco mayor to withdraw from the case.
Lynch appointed the federal public defender to represent Oldenburg when he goes on trial later this year on charges of bilking a Utah savings and loan he owned in 1984 out of more than $20 million to pay off spiraling debts from his real estate investments. Lynch also asked a magistrate to investigate the legitimacy of Oldenburg’s claim of poverty.
Oldenburg signed a statement last week saying he had $500 in cash and had not worked since 1984. He listed debts of $30 million to Valley Federal Savings & Loan, $3 million in a federal tax lien, and $9 million to various other people, institutions and lawyers.
“It was my understanding that someone else will pay that (hotel) bill,” Public Defender Barry Portman said after the hearing Friday. Portman described Oldenburg, who lists his address as being Mercer Island near Seattle, as a “businessman, trying to make it back,” and said he “has no assets.”
“Not all friends kick people when they’re down. Bill still has a few. I suspect that that is where this room came from,” Portman said.
Fairmont spokeswoman Sharon Arnold would not discuss Oldenburg’s stay or say whether the bill had been paid, citing a hotel policy against talking about guests.
But in a court filing Friday, Russoniello submitted a Fairmont bill showing that as of Tuesday, Oldenburg owed $15,075.14 for his stay last week. The bill reflects charges of $6,600 for each of two nights and $700 for a third day.
The Fairmont has touted the suite, once home to its late owner, Ben Swig, as the most prestigious hotel suite in the country. At 6,300 square feet, it has three bedrooms, a two-story library, a billiards room, a living room with a baby grand piano, and four baths with 24-karat gold-plated fixtures.
Back when he had money, Oldenburg had a taste for the finer things in life. He was known for Rolls-Royces and private jets. His downtown San Francisco headquarters featured marble floors, rosewood-paneled walls, and sculptures.
He made big news in the sports world when he owned the Los Angeles Express in the now-defunct U.S. Football League. But his primary business was brokering loans for real estate developments, many of which went sour. In 1984, using a loan from another thrift, he bought State Savings of Salt Lake City.
Oldenburg is scheduled to go on trial in December for a second time on charges of fraud and conspiracy related to State Savings’ purchase of 363 acres in the hills above Richmond, east of San Francisco. Oldenburg had bought the land for $1 million in 1979, and sold it to the S&L; in 1984 for $26 million. In a trial last December, a jury deadlocked on the charges.
Russoniello said Oldenburg either “was going to stiff the hotel or he had the wherewithal to pay (the bill), in which case it raised the question whether he was indigent” and in need of an attorney at public expense.
Russoniello learned of Oldenburg’s Fairmont sojourn when Chronicle columnist Herb Caen reported it. Alioto and an associate did not return phone calls Friday. Alioto’s firm filed papers in court saying Oldenburg owes him a “substantial amount of money.”
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