Argyros Moves Closer to OK for Spain Post

Orange County billionaire George L. Argyros, whose nomination as ambassador to Spain has been held up since spring, appears closer to getting his ticket to Madrid.

Congressional sources say Argyros’ path was cleared when state prosecutors settled a consumer fraud investigation into one of his companies. And since the terrorist attacks last month, members of the two major parties have shown more willingness to cooperate, which also should help the 64-year-old developer and major Republican fund-raiser.

“Sept. 11 has put things in better perspective,” said Republican Party political consultant Sal Russo. “Things are going to get moving, including our ambassadors.”

While a posting in Spain isn’t as sensitive or urgent one as to the U.N. or Middle East countries, the Senate Foreign Relations Committee was expected soon to schedule a hearing on Argyros. It was unclear whether the U.S. attack Sunday in Afghanistan will delay the process.

Whenever his hearing occurs, Republicans and Democrats alike say he should pass muster.

The main holdup has been the California attorney general’s office, which had been investigating allegations that Argyros’ Arnel Management Co., a major Orange County apartment operator, systematically withheld security deposits from tenants.

In settling the case late last month for $1.5 million, Arnel Management did not admit any wrongdoing. Atty. Gen. Bill Lockyer, a Democrat, did not name Argyros individually in the settlement or take criminal action against anyone.

California’s two Democratic senators, Dianne Feinstein and Barbara Boxer, the latter a member of the Senate Foreign Relations Committee, will be involved in the decision on Argyros.

“With the issues in California cleared up, unless there’s something particularly bothering Feinstein or Boxer, this [nomination] will probably move ahead without delay,” said Hal Dash, president of Cerrell & Associates, a Los Angeles political consulting firm for Democrats.

Boxer and Sen. Joseph R. Biden Jr. (D-Del.), the Foreign Relations Committee chairman, were said to have delayed a hearing on Argyros. The senators declined to comment on the pending nomination, as did Argyros.

Argyros is one of 31 nominees still awaiting approval by the Senate committee, which has cleared 113 others. The Detroit-born grandson of Greek immigrants stands out for his extraordinary wealth.

Almost since his nomination in April, the Newport Beach businessman has been preparing to give up his hands-on control of his companies, step down from the boards of a number of corporations and sell his holdings in some of them.

As ambassador, Argyros would be paid $145,000 a year and be expected to use some of his fortune for entertaining foreign dignitaries and guests.

His eagerness to go to Spain marks a career shift for a man who, after 30 years of being his own boss, would become essentially a branch manager for a president who views his job as that of a corporate chief executive.

The Spain posting is widely viewed as a payoff for Argyros’ financial support for Bush, a connection that has not gone unnoticed in Europe. European journalists have detailed the campaign donations of many of Bush’s ambassadorial nominees, including Argyros, who helped raise $30 million for Bush last year.

For Argyros, the bid to be ambassador has not come without a cost. As part of the process, he was required to file a financial disclosure report, which laid bare what Argyros had long sought to keep under wraps--a private fortune of up to $2.2 billion.

The report, aimed at revealing and dealing with potential conflicts of interest, details holdings accumulated first in real estate and then in a host of disparate ventures--more than 800 investments in all. Argyros, who began as a broker, parlayed a small strip mall in Tustin into developments that, over three decades, would include more than 5,000 apartments and 2 million square feet of office, retail and industrial space in Southern California.

Argyros saw his public stature grow in the 1980s, when he owned the Seattle Mariners baseball team and was co-owner of Air Cal airlines. By then, he had befriended former President Richard Nixon and had begun doling out some of his growing fortune to Republican, educational and philanthropic causes.

As of last spring, Argyros’ portfolio was valued at $1.1 billion to $2.2 billion, according to his 58-page disclosure. The filing indicated that over a 16-month period, he and his wife, Judie, received income of up to $100 million. Investment losses or his debts were not disclosed in the report. (Forbes magazine last month ranked Argyros as the 236th richest American, with a net worth estimated at $1 billion.)

Developer Is Called ‘Sophisticated Investor’

Besides his primary source of income--apartment and other real estate assets--Argyros has large stakes in Citigroup, Del Monte Foods and even a chunk of the famed Pebble Beach golf course on the Monterey Peninsula, according to the filing. His investment partners have included the likes of golf great Arnold Palmer and actor-director Clint Eastwood.

“He’s a very sophisticated investor with a thoughtfully constructed portfolio, and very well diversified,” said Jeffery Coyle, chief strategy officer for MyCFO Inc. in Mountain View, Calif., an investment advisor familiar with Argyros.

In most cases, Argyros’ investments are small and his interests passive. But he holds substantial stakes and takes active roles as chairman or director of a number of companies, including DST Systems, the nation’s largest mutual fund information processor, and Santa Ana-based First American, the second-largest title insurer.

Some companies haven’t fared so well under his oversight, such as Apria Healthcare Group, where Argyros stepped down as chairman in April 1998 during a time of significant losses. And several of his investment companies were criticized for some of the financial troubles at Doskocil Manufacturing Co., a pet products maker. Doskocil merged with Argyros’ Dogloo Inc., a maker of igloo-shaped doghouses, in 1997, and Argyros ended up with 87% of the merged company. But since then, Doskocil has lost $62 million, requiring repeated cash infusions.

Neither Argyros nor his top executives would discuss the disclosure report or the nomination, saying the White House has imposed a no-comment period until his appointment is approved.

Argyros is preparing to leave behind his vast stake in private industry. In a letter accompanying his disclosure form, he pledged to give up daily control of Arnel Development, the umbrella organization for his real estate businesses, including Arnel Management.

For much of his career, Argyros has flinched in the footlights of fame, mainly because he likes to keep his business dealings private. But he took center stage with his active support for turning the former Marine Corps Air Station at El Toro into a commercial airport. He has spent about $3.5 million in the last decade promoting the concept, but said he will also end his involvement there once he becomes ambassador.

*

Times staff writers Jean O. Pasco and E. Scott Reckard contributed to this report.