Argyros Scrambling

Newport Beach tycoon impatient over delays in his ambassador nomination

Sources close to George Argyros say the U.S. ambassador to Spain-designee is increasingly disturbed that his three-month-old nomination to the coveted European diplomatic post appears to be in limbo.

The delay has reportedly prompted the feisty Newport Beach real-estate tycoon—worth more than $600 million—to share his frustration behind-the-scenes with White House officials as well as other California Republican bigwigs.

"He's pissed," said one source who spoke on condition of anonymity. "You have to remember this is a man who is used to getting his way—all the time. He has no patience and can't understand what the holdup is."

The Bush administration has already moved 132 nominations through the Senate, including several ambassadors. On June 21, the Senate Foreign Relations Committee, which has jurisdiction over ambassador nominations, heard from four more nominees, including the proposed ambassador to Malta. Argyros, named for the more significant post in Madrid, has not yet been scheduled for a hearing.

Part of the holdup might be that Argyros has no known diplomatic skills. Or that he speaks no Spanish. Or that he has virtually no foreign-policy experience. Or that some believe his only qualification is money—he has showered Republican politicians with millions of dollars in contributions.

Then again, the holdup might be all of the above, plus an ugly simmering scandal. In December, local prosecutors said Argyros was responsible for his company's massive "rip-off" of thousands of poor Orange County apartment tenants, many of whom are Vietnamese and Mexican immigrants. After derailing the investigation and a subsequent complaint by his own prosecutors, Republican District Attorney Anthony J. "Tony" Rackauckas kicked the case up to Sacramento. California Attorney General Bill Lockyer, a Democrat, has assumed control of the probe. That investigation could result in Argyros and his Arnel Management Co. paying huge fines and refunding millions of dollars to former tenants.

A source close to Argyros said his esteem took another hit after the OC Weekly's June 22 report of a previously undisclosed December 2000 law-enforcement report. That report alleged that the businessman played a hands-on role in schemes involving tenant security deposits and cleaning charges. For example, prosecutors say they have evidence that Argyros—an outspoken proponent of conservative religious causes—paid bonuses to employees who cheated tenants. They also allege that his company, which owns more than 4,500 apartments in Orange and Los Angeles counties, targeted Vietnamese tenants for the worst of the abuse.

Until recently, Arnel Management Co.'s questionable policies remained unchanged, tenants said. One ex-tenant, 28-year-old Thai Hoang and his wife, were hit with an inexplicable $2,400 bill when they moved out of their Westminster apartment in May. The Hoangs, who were featured in the Weekly ("Argyros' Vietnam War Rages On," June 29), received a letter from once-belligerent Arnel managers offering to reduce their bill to zero if they agreed not to sue for fraud.

"George wasn't worried a couple of weeks ago, but things have definitely changed," said the source, who has known Argyros for decades. "He is definitely scrambling now."

If prosecutors are right, Hoang—an unintimidated Newport Beach financial consultant who graduated from UC Irvine—is one of the few lucky ones. They say thousands of immigrants were either unaware they were being shortchanged or were too afraid to challenge the politically connected Argyros, who is chauffeured around town in a massive, window-tinted, black Cadillac limousine.

To date, private attorneys for tenants have filed three civil lawsuits against Arnel Management Co. and Argyros, who—through a lawyer—declined to be interviewed. It is expected that the suits will be granted class-action status in coming weeks.

The scandal has been largely ignored in recent weeks by The Orange County Register,whose management is close to Argyros, and the often-befuddled Orange County bureau of the Los Angeles Times. But the controversy is one of the hot cocktail-party topics among Argyros' swank Newport Beach crowd. More important, the case has the attention of powerful members of the Democrat-controlled Senate Foreign Relations Committee, which ultimately may decide Argyros' fate.

If you have information about Arnel Management Co.'s tenant practices, please e-mail rscottmoxley@ocweekly.com or call (714) 825-8433.
 
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