The Harkeys' Shamu-Size Scandal May Be More Than A Fluke
Let's get the obvious out of the way. Someone over at the Register took my advice. How else to explain that their headlines about Dana Point Festival of Whales have evolved from the predictably punny triteness of last week's "Whale of a Festival" to yesterday's far more excellent "Festival of Whales isn't fin-ished"? This really represents a sea change for the newspaper.
Anyways, at the kick-off for the festival last Saturday, your reporter spotted the white whale of South County politics at the local pub. Well, actually, "white whale" is totally the wrong descriptor. Were state assembly-woman Diane Harkey any sort of marine mammal, she'd be a dolphin: small, chipper and eager for human approval.
The sighting of Harkey, Dana Point's former mayor, smiling widely and chatting with current mayor Lisa Bartlett reminded me to refresh my memory on the reasons why there's a dedicated contingent of locals who seem to want Ms. Harkey sold to Sea World and never seen again. So I pulled out the packet of literature handed to the Weekly by one of the Harkey-haters a few years ago and start reading.
The only thing worth noting at the moment is a Jan. 2007 Register article that went out over the national business wires. It's about trust-deed investment, and about half-way through it quotes Dan Harkey, the politician's husband. His company, which specialized in trust deeds (whatever that means), was accused last month of running a Ponzi scheme that helped raise funds for Diane's campaigns (leading to an entirely new website devoted to Harkey-hating). Which is funny, because the article warned that something like this might happen:
Premium Seating: Los Angeles Angels v. Oakland Athletics
TicketsMon., Aug. 28, 7:07pm
Los Angeles Angels vs. Oakland Athletics
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Women's Volleyball Cup - United States Versus Brazil
TicketsTue., Aug. 29, 7:30pm
Orange County Soccer Club vs. Reno 1868 FC
TicketsSat., Sep. 2, 7:00pm
But trust deeds are ripe for scams. Some of the biggest scams are Ponzi schemes, in which early investors are paid with new investors' money - until the money runs out.
...Dan J. Harkey, president of Point Center Financial Inc. in San Juan Capistrano, which has done privately financed residential, commercial and construction lending for 30 years, wants to make sure his investors are fully informed.
He sends out a disclosure package as thick as a phone book including a loan summary, photos and maps of the property, the appraisal, a copy of the promissory note, trust deed and a preliminary title report.
"It is prudent for the investor to understand what they are doing before they invest," he says.
Hmm. It sounds like three things could have happened. Dan could have been taking the low road and been purposefully defrauding people back while he was saying he wasn't. Or he could have been trying to make his customers aware all along, as would have been prudent, that they were getting in on some risky investments. Or someone read this article (or already knew the information in it), realized that the kind of business Dan runs is "ripe for scams" and used that knowledge to make some accusations.
Check out this unrelated press-release Diane sent out this morning. "Harkey Introduces Bond Reform Package to Help California Avoid Future Bankruptcy" is the title. The money quote:
AB 1278 will require proper disclosure at the ballot box of true costs associated with the approval of bond initiatives fully disclosing to Californians how new debt will impact their pocket book long term.
"Ballots should disclose the true costs of proposed bonds in simple, easy-to-read text instead of deceiving the voters with catchy ballot titles and pages of legal jargon," said Assemblywoman Harkey. "Every Californian has the right to know the real impact of debt approved by the voters - they are tired of being deceived."
So Harkey wants clear public disclosure to tax-payers about investments. That's exactly what Dan Harkey's accusers say they didn't get, and exactly what he was discussing in the 2007 Register article. Perhaps she's been inspired by her family's own critics.
Just floatin' some boueys here. Nothing connecting them yet. But something seems... well... fishy.