Fired Register Circulation Executive Sues Paper : Media: Patrick Elster claims he was a scapegoat in scandal over inflated figures and was terminated to settle a lawsuit by dealers. General manager defends newspaper’s action.

A fired Orange County Register circulation executive has sued the newspaper, alleging he was terminated to settle a costly lawsuit by a group of independent dealers.

Patrick Elster was dismissed in September on charges of mismanagement and violation of company policy, after spending a month on administrative leave.

He is asking for an unspecified amount of money lost since his firing and punitive damages, claiming the newspaper slandered him by falsely implicating him in a scandal over inflated circulation figures last year and fired him to avoid a multimillion-dollar court judgment against the Register.

“I don’t have any doubt that the lawsuit’s going to stand up in court,” Elster said. “Finally, the truth will be told about what actually happened.”

Register general manager Richard Wallace said Monday afternoon that neither the newspaper’s top executives nor its attorneys have received a copy of the lawsuit, which was filed Friday in Orange County Superior Court. He dismissed Elster’s suit, however, saying the paper did not act incorrectly in firing him.

“Some people have vivid imaginations,” Wallace said. He declined further comment.

The 18 dealers, who have contracts to supply newspapers to stores and news racks, filed suit against the Register and Freedom Newspapers Inc. in February, 1991, after their contracts were terminated by Elster, then Register vice president of circulation.

The dealers eventually dropped their suit and were reinstated two months after Elster’s firing. Details of the settlement remained undisclosed at the request of both the Register and the dealers, said Torrance attorney Taylor Daigneault, who represented the dealers.

Elster contends in the lawsuit that he and another circulation manager were told they were dismissed for dishonesty. However, Elster’s suit said he and top aide Joseph Mertens were actually fired as part of a “quid pro quo,” that led to the dealers’ rehiring.

The Register “tried to paint us as bad guys, doing bad things,” Elster said. “They needed a couple of scapegoats and needed to save face. We took the fall.”

Daigneault said that nothing in the agreement “even remotely suggests the (reinstatements) were contingent on Mr. Elster’s discharge.”

Although he has not seen the lawsuit, Daigneault said he was confident the dealers will prevail if the case gets to court.

“In my judgment, it’s going to be a tough case (for Elster) to win,” Daigneault said.

The dealers’ firings occurred as the Audit Bureau of Circulation was undertaking an extended review of the Register’s claim that it had a daily circulation of 372,750 and Sunday circulation of 429,146 in the six months ended March 31, 1991.

In the wake of the audit, the Register’s circulation was revised to 357,940 for daily circulation and 411,798 for Sunday. For the six months ended Sept. 30, 1991, the ABC audit found, daily circulation was 347,675 and Sunday’s was 400,375.

ABC spokesman Raymond Chalmers declined to explain why the March figures were reduced, citing confidentiality agreements between the Schaumburg, Ill., nonprofit agency and its clients.

Elster’s lawsuit states that he was the first to discover wrongdoing in the circulation department. He vehemently denies that he or his assistant had any involvement in the circulation discrepancies.

In fact, Elster contends in the suit, he had alleged wrongdoing by the dealers in a report to his superiors, including Wallace and Publisher R. David Threshie.

Elster claims that Threshie had initially approved the dismissal of the dealers, then changed his mind when it became apparent that the dealers’ suit, if heard in court, could have cost the Register as much as $50 million.

Daigneault said that the dealers’ case was finally settled when the Register “realized there was no skimming or dishonest activity going on.”

“It’s ridiculous to think that the Register was going to be coerced into taking a bunch of people back who were habitually stealing from them,” Daigneault said.

Elster’s suit is the latest fallout since last year’s shake-up in the Register’s circulation department.

Last month, Woodrow W. Combs Jr., a six-year Register circulation employee, also filed a wrongful termination suit against the paper.