Blowing Smoke, Breathing Fire (Part I)

The Fang family rides tabloid journalism and hardball politics to the winner's circle

In the spring of 1993, James and Ted Fang invited some 30 businesspeople to a fund-raising party at the Grand Palace, the family's restaurant in Chinatown. The brothers, sons of a local family that owns eight community newspapers, a national newsmagazine, a printing company, and $6.5 million worth of real estate, wanted to raise money for a new political action committee they had just formed.

James, a member of the BART board, told the potential donors, many of them Asian professionals, that giving to the PAC -- Citizens for Mass Transit -- would be good for their businesses. Fang wasn't just blowing smoke. He and Ted had lined up two powerful politicos -- BART board member Michael Bernick and transit-obsessed state Sen. Quentin Kopp -- to warm up the crowd at the Grand Palace with speeches about the future of Bay Area public transit.

According to one donor, James told him something like this: You're an architect and I have some power over who gets BART contracts. But the donors were also told that their money would advance transit issues like extending BART to the San Francisco airport and support candidates who agreed with their transit policies.

The Fangs didn't exactly make good on their pledge. According to campaign disclosure statements on file with the Registrar of Voters, not a dime of the PAC money disembarked anywhere near a transit issue or a viable candidate. The vast bulk of it, $14,000 of the $20,660 the Fang brothers raised, went to help retire the debt of Ahmad Anderson, an also-ran BART board candidate who had lost in the previous November's election. Anderson owed the $14,000 to the Fang's printing company, Grant Printing, for campaign literature it had produced for him.

The remainder of the funds, $5,728, went to Grand Palace for its cost of putting on the fund-raiser, to Grant Printing for the invitations, to the Fangs' attorneys, and to pay for postage and a consultant.

"The whole episode left a bitter taste in our mouth," says Kendall Young, a local architect who gave the PAC $250. "We felt we had been taken."

Whether the Fangs violated campaign finance laws is a topic the assistant district attorney in charge of investigating campaign finance violations, Tom Boggot, refused to comment on.

And don't bet that Boggot's new boss, District Attorney Terence Hallinan, will have Boggot scrutinize the Fangs. Ted Fang, publisher of the family's flagship newspaper, the San Francisco Independent, combined with companies owned by or that work regularly with the Fangs, assisted Hallinan's victorious campaign to a wide-ranging extent.

During the December runoff between Hallinan and former Assistant DA Bill Fazio, Ted Fang says he ran the media campaign for Hallinan. He designed and helped lay out brochures and produce direct mail as he advised Hallinan on overall strategy. "Ted was the de facto chief of staff of the campaign," a source close to the Hallinan camp says.

Grant Printing produced the Hallinan mail pieces, the 33-year-old Ted Fang says. Fang could not recall if Hallinan still owes for direct-mail brochures produced by Grant Printing. If Hallinan does owe Fang for direct mail, the debt could easily exceed several thousand dollars. Fang did say, however, that Hallinan still owes the Independent $2,500 for ads it ran on his behalf during the DA's race. But neither the advertising nor direct-mail costs show up on Hallinan's campaign disclosure statements.

If Hallinan owes anybody any campaign money, he is required to list it as an accrued expense. If the Fangs have directly donated services gratis to Hallinan, Hallinan must list them as in-kind contributions. Hallinan has done neither, according to the latest campaign finance documents filed at the Registrar of Voters' office. To avoid a fine, Hallinan must file an amended statement.

The purpose of the campaign laws is to let the public in on who is backing politicians like Hallinan and for how much. Without this information, it's hard to hold Hallinan answerable for his decisions. Such low accountability comes from the city's top cop regarding the very laws he's supposed to enforce.

Meanwhile, the Fang fund-raising for Hallinan continues. On Jan. 23, the Fangs opened the doors of the Grand Palace for a Hallinan debt-retirement fund-raiser.

What Hallinan's campaign statements do show is that the new DA owes nearly $4,000 to an advertising brokerage company that works regularly with the Fangs for campaign literature and management services. The documents also show that Hallinan owes $2,500 to Grant Printing from his 1992 re-election to the Board of Supervisors. Hallinan says that debt has been whittled down over the years in accordance with the law.

In several campaigns over the years, the Fangs have billed politicians thousands of dollars for campaign goods and services, but in many cases the Fangs have not collected on those debts according to campaign finance statements.

In 1991, for instance, the Independent published The Agnos Years, a compilation of anti-Agnos diatribes written by Independent columnist Warren Hinckle. California Common Cause filed a complaint with the city attorney's office, saying the book was an in-kind contribution to the Frank Jordan campaign and should be listed on campaign finance statements. Two local voters brought suit in a separate action on the same issue. According to court documents, Fang was deposed and said his company spent between $30,000 and $60,000 on the booklet. Ted Fang has insisted all along that The Agnos Years was a promotional vehicle for his newspaper. A superior court judge disagreed with Fang, but the matter was dropped by both parties on appeal. The Common Cause complaint is still active.

That same year, an Independent employee formed an unaffiliated anti-Agnos campaign committee, Citizens for a United San Francisco. The committee printed one anti-Agnos hit piece, which was designed by another Independent employee and printed on Grant Printing presses. Campaign disclosure statements filed by the committee show the printing bill amounted to $7,321. Ted Fang says the debt was never paid. And Asian Week, the national magazine owned by the Fangs, spent $2,600 using its bulk-rate mailing permit to send the flier out. In the 1991 lawsuit, plaintiffs Agar Jaicks and Ellen Chaitin alleged that the Asian Week expenditure constituted an illegal loan in excess of the $750 contribution limit.

There is no record in campaign disclosure statements that the Fangs' Independent newspaper has collected a $14,172.08 political advertising debt owed to it by the "BART to the Airport" campaign of 1994, controlled by the family's longtime ally Quentin Kopp.

Campaign disclosure statements also show that in his 1994 BART board campaign, James borrowed $45,000 from his mother, Florence. Available campaign statements do not reflect a repayment. James Fang, 34, and Florence Fang declined to be interviewed for this story.

During the 1990 and 1994 campaigns for his BART seat, James incurred debts from the Independent, Asian Week, the Grand Palace, and Grant Printing in excess of $31,000, all of which are reflected in campaign disclosure filings. Current statements show no repayment on these debts either.

California Common Cause has accused the Fangs of essentially giving services away and evading the $750-per-contribution limit proscribed by local law.

Ted Fang acknowledges that there are uncollected campaign debts, but says they are the result of bad bookkeeping, not a desire to skirt campaign finance laws.

"We have had lax collection efforts in the past, but we are getting better," he says. "Besides, we don't need to give free services to have a political impact."

The family has myriad other ways to make its voice heard. They don't need to break the law -- as James did in 1995 when he was fined $22,000 by the California Fair Political Practices Commission (FPPC) for illegally funneling contributions to the 1991 Jordan campaign. Fang obtained four $500 cashier's checks, the FPPC says, and signed his family members' names to the check that then was given to the Jordan campaign.

But the Fangs have been accused of engaging in political dirty tricks. In 1994, the DA investigated whether Independent distributor Marc Chamot tried to bribe a printing company official and abscond with campaign literature belonging to James Fang's opponent in the 1994 BART board race, Victor Makras. (The DA declined to prosecute.) The literature, produced for Makras, compiled James Fang's alleged ethical transgressions and was packaged in a purple can that bore the label: "Can James Fang."

An eyewitness, who asked not to be named, says that 10 Hefty bags of the cans showed up at the Burlingame offices of the Fangs' Independent Newspaper Group, and were stored there for several months.

In an interview, Ted Fang denies all of the allegations.
Over the years, the Fangs' political machine has raised hundreds of thousands of dollars for politicians ranging from George Bush and Pete Wilson to Frank Jordan and Willie Brown. And the Fangs' political allies seem to care not that the family has trod on and over the line of what is allowed by the law, or that when they climb into the political ring it's often with horseshoes in their gloves. Year after year, they advance, making friends and racking up success after success in the political and business arenas. This last election they were in the winner's circle again, arm in arm with the new mayor, for whom Ted Fang says they raised five figures, and in a love lock with the new district attorney, for whom they employed their newspaper like a laser guided missile against opponent Bill Fazio.

Fear and loathing still outstrip respect in local political circles when some people talk about the Fangs. But the Fangs don't seem to care. They're winning.

"People are just uncomfortable that an Asian family knows how to play hardball," Ted Fang says. "We play by the same rules as everybody else."

The strongest political support that rolled off Grant Printing presses for Terence Hallinan was the editorial content of family's flagship, the San Francisco Independent. Reporter Joe Strupp and consultant to the publisher John Gollin wrote some of the most unfair and distorted stories in recent memory -- all aimed at Fazio.

The most damning allegation, that Fazio consorted with criminals, was contained in the first story of a three-part anti-Fazio series titled "Tainted Prosecutor?" The headline, above the masthead of the paper's Nov. 28 issue, screamed: "D.A. Candidate's Underworld Ties." Further review of the article reveals no support for that wild and reckless claim. Fazio says he is consulting a local attorney about suing the paper for libel.

Contacted at Independent offices, Strupp and Gollin refuse to defend their stories. Asked to identify Fazio's exact underworld ties, Strupp dodges. "I'm not going to get into a long back-and-forth," he says. "The story speaks for itself." Informed that the story apparently does not speak for itself, Strupp refuses to comment. Gollin is equally evasive. First, he admits that he isn't a journalist and has spent most of his career on the business side of papers. Then when pressed on the distortions in the series, he refuses to comment except to say, "We wrote what was told to us."

Regardless, the hit pieces paid off for Ted Fang. Hallinan won -- by a thin margin -- and made Fang co-chair of his transition team where the newspaperman is now advising the DA on hiring and firing. Fang played a key role in the hiring of the No. 2 assistant in the office, former private attorney and federal prosecutor Marla Miller.

And while Ted Fang rewarded his friends, he apparently sought to punish his enemies.

The first to be shown the door by Hallinan was John Majka, the chief investigator for the office. Ted Fang says that during the race, he requested information on Fazio from Majka, and that the investigator was rude to him.

"He acted very unprofessionally," Fang says. The publisher admits to conveying this impression to Hallinan before Hallinan fired Majka.

Majka did not return phone calls seeking comment. But two sources in the DA's Office to whom Majka has spoken confirm that he believes he was fired as a result of the conversation with Fang.

Fang's influence on the nonsalaried transition team extends beyond his appointment. Also on the Hallinan transition team are the following Fang associates:

* David Balibanian, the Fangs' longtime attorney whose law firm, McCutchen, Doyle, Brown & Enersen, has represented the family in its two suits against the San Francisco Newspaper Agency, the business arm of the Examiner and the Chronicle. The firm has also represented the Fangs in their real estate purchases and in a lawsuit resulting from alleged campaign finance violations in the 1991 mayor's race.

* Samson Wong, the Independent's field manager and former organizer of the Asian-American Voters Project. The Common Cause complaint alleges that far from being an independent committee, the AAVP was established by James Fang in 1991 to illegally funnel contributions to the "Frank Jordan for Mayor" campaign.

* Capt. Richard Cairns, a friend of the family and a close associate of Jack Davis, the local political consultant who ran Willie Brown's mayoral campaign. Davis takes a yearly vacation with Ted Fang and calls the Fangs "my family in San Francisco." (Cairns was Davis' pick for police chief and the flash point of the recent rumble between Davis and Brown's choice for chief, Fred Lau.)

What Fang is hoping to gain from his cozy relationship with the new DA is open to question. He says he's just making sure the new DA pays attention to the needs of San Francisco's neighborhoods. After all, Fang notes, looking out for San Francisco's neighborhoods is his newspaper's mission.

But Fazio has a different theory.
"The Fangs obviously thought they would help Hallinan by bringing me down, and why they helped Hallinan is they thought, maybe, that Hallinan would guarantee that nothing would happen to them if there was any investigation [into the Fangs]," Fazio says.

Given Hallinan's long-standing pledges to get tough on pols who violate the Political Reform Act and other election laws, it's inconceivable that the Fangs could purchase immunity from the new DA.

Hallinan dismisses the suggestion that he'd go light on the Fangs if they do run afoul of the law. "I will discharge my duty," he says firmly.

Hallinan defends the Fazio series in the Independent.
"Listen, I'm not so cavalier about Fazio's behavior," Hallinan adds. "I'm not going to tell you why because of my position. But I wouldn't make any accusations about the Independent if I were you."

The district attorney's race is only the latest in a string of political and business successes for the Fang family.

The Fangs intensified their involvement in local politics in 1990, when James Fang ran for the BART board. Suddenly he became the subject of Page One Independent stories, and his campaign literature depicted him in the paper's newsroom posed before a desk and plaque saying "comptroller," even though, a source says, he had nothing to do with the running of the paper.

It wasn't until the 1991 Jordan campaign for mayor that the Fangs revealed their willingness to play for keeps. According to Ted Fang, Jordan campaign manager Jack Davis mediated the hiring of Warren Hinckle, whom the paper unleashed on Art Agnos. The first column was edited by Davis and Jordan campaign press secretary Dee Dee Myers, an eyewitness says. Ted Fang then compiled the series in The Agnos Years booklet and distributed it just days prior to the runoff election.

In 1993, Pan Asia Venture Capital Corp., the family's business arm, bought seven weekly newspapers on the Peninsula, giving the Fangs immense power to shape public opinion and affect political contests from Redwood City in the south to San Bruno in the north.

The next year, James Fang won his re-election bid for the BART board, even as he had to pay his $22,000 FPPC fine, and the family won at the ballot box with Proposition J, the initiative wresting from the Examiner a quarter-of-a-million-dollar contract to publish public notices. Prop. J was so specifically written to benefit the Independent that it could have been called the Independent Relief Act of 1994. (Sources at the Independent say the public notices contract is the difference between breaking even and making money for the newspaper.)

And last year, in addition to gaining influence with the district attorney, the family dumped their old friend Frank Jordan and jumped on Willie Brown's victory train. Ted and James' mother, Florence, helped organize several fund-raisers in Chinatown for Brown. Ted Fang says his mother raised at least five figures for Brown's treasury. Even Asian Week pitched in, allowing Willie Brown phone banks to operate out of its offices, according to campaign disclosure statements.

As a reward, James Fang was appointed to Brown's transition team where he reviewed the rŽsumŽs of potential commission and department heads and interviewed job candidates. The post wasn't a plum, but it helped rehabilitate James, who has been keeping a low profile politically ever since he became a laughing stock for inflating his resume in 1992 as he sought appointment as the mayor's international trade director.

But at the onset of this flowering, the family lost its leader, John Ta Chuan Fang, who died in 1992. The father had always called the shots, set the agenda, kept the boys -- James, Ted, and Doug, the youngest -- on a steady course. In John's absence, Ted has taken the reins of the family. Sure, Florence still makes her opinion known and James, the oldest, is the public figure and politician of the family. But truth be told, Ted Fang is the man of the house now.

And as Ted sits atop his formidable, expanding political machine, he has a lot to learn. Power is an intoxicating thing, but one needs to wield it wisely. John Fang was known for taking care of the Chinese community as much as he advanced his family's interests, observers in that community say. But since his death, the family has developed a reputation as self-serving, as the Citizens for Mass Transit episode illustrates. Winnercrats, some call them, for their willingness to support candidates based largely on their ability to win.

"The comment I hear frequently these days is that this or that wouldn't have happened if John was alive," says Wendy Paskin Jordan, securities broker and wife of former Mayor Frank Jordan.

True enough, while John Fang was alive, the FPPC and other ethics watchdogs never came sniffing around the family encampment.

A close associate of Ted Fang's says the publisher recently found a letter his father wrote to himself shortly after arriving in America. The text of the letter centers on resolve and focusing on one's goal. Ted Fang has framed the letter and hung it in his office, where he also keeps a large photograph of his father.

The baby mogul would be wise to tack to his father's course, especially considering the trouble the family has gotten into since John's death. Talking to Ted Fang, one comes away with the impression of a man at once savoring and fearing his power. In one breath he will brag of political feats. In the next he will feign surprise that he is considered so powerful. Like a hand-me-down from his late father, the mantle of power doesn't fit yet.

Ted Fang orders breakfast for dinner at the Baghdad Cafe, a steak-and-eggs joint in the heart of gay San Francisco. The conversation begins with the perception of power and how that changes depending on who holds it. Forking into his huevos de chorizo, Fang uses as an example the way local journalists, especially Examiner reporters, characterize his family.

First he takes off on SF Weekly for a 1992 headline calling his mother "Imelda of Chinatown." "Can I just say that was racist?" he says. Fang then turns to the Ex, complaining that whenever the paper writes a story about any Fang family member, it applies the phrase "politically powerful Fang family" or refers to patriarchs, matriarchs, and scions. These newspaper monikers have Ted Fang wondering about the issue of race.

Does the paper, do any of us, make an issue of the power accumulated by white families? Fang asks. Does the Ex feel compelled to describe Kevin Shelley as the scion of the politically powerful Shelley family? Does the Ex feel compelled to treat Angela Alioto or Terence Hallinan, both products of local political dynasties, in the same way? No, he says, and the disparity in treatment tells us something about the way the white elite views minorities advancing, and even beating them, using the amoral rules of power they themselves developed and mastered.

"Don't you think that's a derogatory stereotype?" Fang says. "Don't you think that it's part of the Examiner's campaign to portray the Fang family as an oddity?" He maintains that exotic words like "scion" are meant "to pigeonhole the whole family as somehow unusual, inappropriate."

Whether or not there has been some subtle, subconscious racism going on over at Fifth and Mission, the Fang family has made itself known. They have mounted the rostrum. Instinctively, Ted Fang knows that the pursuit of power will make him a magnet for criticism.

"I welcome the scrutiny," says Fang.
Fang deflects criticism arising from the Citizens for Mass Transit PAC. The PAC was helping ally Ahmad Anderson retire a campaign debt, which is the same as supporting candidates who agreed with the family's transit agenda, he says. Pressed on how he makes that connection, Fang deftly turns to the issue of political loyalty.

"When we support someone, we don't leave them out to dry if they lose," Fang says. "We couldn't leave him stuck with the bill [for the printing]."

Asked what he has to say to the contributors who are angry, he says, "I'm sorry. I thought we made it clear that the committee supported candidates who were good on transit issues."

And what about a newspaper publisher acting as treasurer of a PAC and as de facto chief of staff of a political campaign? How can his paper function as a credible news organ when its publisher is perceived to punish sources in the political arena? Who does he think he is, William Randolph Hearst?

Fang sees no conflict whatsoever. "I don't see how my role as publisher of a newspaper precludes me from participating in the political arena," he says.

But the Majka firing, and Ted Fang's role in it, illuminates the conflict beautifully. One day Fang is a newspaperman, asking legitimate questions about a story. As is often the case, a source is recalcitrant -- even rude. The next day, Fang is a political appointee, making personnel decisions. And Majka is targeted. Now did Ted Fang play a critical, exclusive role in the dismissal? We will never know. Did Ted Fang take an experience garnered as a journalist and let it bleed over into his political life? Absolutely. Is that a problem? You bet. Asking these questions of Fang it becomes readily clear that he doesn't see them as legitimate concerns.

Throughout dinner, Fang is charming, accessible, witty, and coy when he's evasive. Asked a tough question, he throws his hands up to his face, spreads his fingers, and looks at the source of the query.

All of which is a 180-degree turnaround from his first interview, which was on his turf: the Evans Avenue headquarters of the Independent and Grant Printing. That interview was all about putting the interviewer in his place.

There's a special skill politicians employ in rattling reporters. Principally, it's the eyes. Former Mayor Art Agnos could put a chill in your spine lickety-split with one glare. Assemblyman John Burton rolls his and says, "Oh, come on, you know better than that." And Jack Davis does it with fire in his eyes and invective and insult on his tongue.

But before Fang tries out his eye tricks, he keeps the interviewer for this story waiting for almost an hour. When the interview finally starts, Fang hands over a study on newspaper readership, showing SF Weekly lagging behind his paper.

"Guess you guys aren't doing too well, huh?" he asks, smiling, but avoiding direct eye contact.

He has also invited local political consultant Robert Barnes to "witness" the interview and protect him from misquotes. "I understand I always need protection when I'm interviewed by the Weekly," he says.

Ted Fang wants to dominate people, but the clumsiness of his attempts show that he is still developing a persona to match his power, and the former hasn't quite caught up with the latter.

Continued...

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