D.A. Probes Housing Panel’s Plan to Buy Reputed Mobster’s Property

The district attorney’s office has begun an investigation of the proposed purchase by the San Diego Housing Commission of properties owned by reputed mobster Alvin Malnik.

San Diego Assistant City Manager Jack McGrory informed the City Council of the district attorney’s probe in a brief memorandum issued Tuesday. McGrory was out of town Thursday and unavailable for comment, and other officials declined to comment when asked what district attorney investigators were looking at.

District attorney spokeswoman Linda Miller downplayed her office’s role in the matter, saying it was “just a continuation of what we have been doing before.” She said that Deputy Dist. Atty. Michael Pent promised the City Council on Oct. 1 that his office would look into council members’ concerns about purchasing two low-income housing units from Malnik.

At the Oct. 1 council meeting, Mayor Maureen O’Connor referred to reports from the Nevada and New Jersey gaming commissions and a variety of newspaper stories that link Malnik to organized crime. The council asked local law enforcement officials to investigate Malnik’s background.

Malnik, a Florida lawyer and businessman, repeatedly has denied accusations that he has ties to organized crime and usually responds to such allegations by pointing out that he never has been convicted of a crime.

McGrory’s memo said that San Diego police have “conducted a preliminary criminal investigation into the proposed transaction.” It went on to say that San Diego Police Chief Bob Burgreen and Dist. Atty. Edwin Miller met to discuss the “results of this preliminary investigation.”

However, district attorney spokeswoman Linda Miller and other law enforcement officials declined to say whether the police probe uncovered any evidence of wrongdoing, or why the district attorney is now in charge of the investigation.

When asked if the district attorney is investigating Malnik, or whether investigators are looking into the role played by the Housing Commission staff in the proposed sale, spokeswoman Miller said:

“People are looking at the whole process of who Malnik is, and if the city should deal with him.”

Malnik owns the Penasquitos Gardens apartments and the Mt. Aguilar apartments in Clairemont. The two complexes contain 816 units that are rented to low-income families, whose rent payments are subsidized with federal money.

Councilman Bruce Henderson, who opposes the purchase, said the district attorney might be looking at possible wrongdoing by some commission staff members in arranging the purchase of the units.

“We don’t know about the contacts that Malnik has at the Housing Commission. . . . The other conclusion is that the police turned up things that required the district attorney to conduct another investigation,” said Henderson.

At the Oct. 15 council meeting, an angry O’Connor charged that the commission staff had omitted Malnik’s name from documents relating to the proposed purchase.

“Someone made the decision (to omit Malnik’s name). . . . Why was his name never disclosed?” O’Connor said.

On Thursday, commission spokeswoman Mary Jo Riley said staff members were not trying to hide Malnik’s name from the council. Instead, the documents questioned by O’Connor had the name of the company owned by Malnik, which was listed as the owner of the two apartment units.

“We always referred to the properties as California Properties. In the documents that required the financial participation of the principal owner, we used his name,” said Riley.

She said housing officials do not know what district attorney investigators are looking at and added that they were never told what, if anything, was revealed by the police investigation.

“We haven’t been given any specific information of any findings, and we don’t know that the district attorney is looking at,” Riley said. “ . . . But we aren’t having a long-term agreement” with Malnik. We’re just trying to buy his property.”

The Housing Commission offered Malnik $38.5 million for both apartment complexes. Henderson criticized the commission’s offer as too high, because commission staff members estimated that it would take an additional 10 million to $20 million to renovate the units.