TOTAL RECALL

How Darrell Issa really got rich

Illustration by Bob AulForget $35 million. According to the latest figures from the Secretary of State's office, the Davis recall election will cost Californians between $53 million and $66 million. On the county level, the cost for OC alone is estimated at upwards of $2 million.

In the only good news regarding the cost of the election, Gray Davis has announced he won't take advantage of a law that allows him to be reimbursed for the cost of his campaign if he survives the recall. Davis issued a challenge to his multimillionaire opponents to do likewise, and promise to give the state an amount equal to what they spend on their campaigns if they lose. So far none of the multimillionaires to the right of Davis—Bill Simon, Darrell Issa, Michael Huffington, Richard Riordan, etc.—has shown any interest in reimbursing the taxpayers.

Neither has the multimillionaire to the left of Davis. Larry Flynt, publisher of Hustler and one of the giants of America's porno-industrial complex, has tossed into the ring what we can only pray is his hat, and unveiled a plan to erase California's massive deficit: allow slot machines in all private clubs. Candidate Flynt is certain that the tax revenue generated by hordes of quietly desperate people yanking the handles of slot machines will restore California's fortunes. And Flynt knows whereof he speaks. After all, not only does he have a financial interest in casinos, his entire fortune is built on persuading the quietly desperate to spend hours yanking.

If Flynt is serious about his plan, he should reach across the political divide to his old enemy William Bennett. A slots-based economy needs men like the former Reagan and Bush administration official turned professional moral guide. In May, news broke that Bennett is such a slots jockey that he's achieved "preferred customer" status in at least four casinos in Atlantic City and Las Vegas. At the time, Bennett claimed he had broken even during his years of serious yanking. But in an interview aired on CNBC on July 30, he changed his story, admitting to major losses: "It was a high level, was a lot of money." Bennett, however, insists that his slots habit and his lying have done nothing to diminish his credibility as a moral exemplar.

Presumably, Darrell Issa would agree. On the day Bennett's interview was aired, the Los Angeles Times carried a story featuring Issa squirming away from yet another phony claim with Bennett-like vigor. This time, it's Issa's claim to have won Inc.magazine's prestigious Entrepreneur of the Year award for 1994. Actually, he won a related local San Diego award that year. And Issa can't even honestly claim to be the local entrepreneur of the year, since, as the Times notes, he was "one of several winners" that year in San Diego. But let's be generous: even if Inc.didn't recognize Issa on a national level, the magazine could probably still pick him out of, say, a police lineup.

The Times article doesn't give Issa enough credit for being less dishonest about his business prowess than he was the last time he ran for statewide office. In 1998, while campaigning for the U.S. Senate, Issa ran commercials claiming he had built his car-alarm company "from scratch" back in his home state of Ohio. But after an investigation by the Times, Issa had to do some Bennett-style backpedaling. Issa's company started out as Joey Adkins' A.C. Custom Electronics. Adkins' company had a contract producing car-security devices for Ford. In the early 1980s, Issa owned a smaller electronics company that did work for A.C. Though profitable, Adkins' company was having some financial difficulties, and in 1982, Issa loaned Adkins $60,000. As the Times' 1998 article explains, "A similar loan from Issa was repaid the previous year. But this time, Adkins asked for a few more weeks to repay the loan—and Issa says he agreed." Such magnanimity didn't last even one week: "Within days, however, Issa went to a judge and—under an Ohio law that did not require the debtor to be present—won a judgment for the outstanding $60,000." Adkins didn't find out until Issa phoned to inform him he was taking possession of the company.

Issa insists this was simply sound business practice, telling the Times, "There wasn't any stealing of the company." Issa also insists it wasn't arson that caused the fire that gutted his company's manufacturing plant seven months after he took over A.C. Custom Electronics.

Others, such as Issa's insurance company and the fire marshal, were less certain. In a July 24 article, Issa's hometown newspaper, the Cleveland Plain Dealer, summarizes what made the fire marshal suspicious: "Three weeks before the fire, Issa had quadrupled the insurance coverage on parts and equipment in the building. He had ordered that a computer be removed for reprogramming about a week before the fire, according to transcripts of employee interviews, and wanted equipment blueprints, normally kept in a filing cabinet, to be put in a fireproof box." And the Times' 1998 article notes: "Flammable liquid appeared to have been poured on the only area not covered by fire sprinklers, investigators found." Although the fire was officially classified as "suspicious in nature," the arson investigation was dropped, and Issa eventually settled with his insurance company, though for far less than he felt he deserved.

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