The Last Tycoon (Part II)

Nowadays, a charge of sexual harassment is a serious one indeed, particularly for a prominent man with a pristine public reputation. It can – and in this case, it did – provoke a seven-day interrogation. Novack's deposition produced 39 hours of videotape. In the part of that deposition that is included in the public record of the case, Lieber asks Novack a series of detailed questions about her personal sexual behavior, ostensibly focusing on conversations she had on the subject in the workplace. Some implied sources of his information, according to his pharsing of the questions: Cindy Testa, a longtime Shorenstein employee who coordinated the UN50 event, and Shorenstein's son, Douglas, president of the Shorenstein Company.

For example, Lieber asked Novack:

Attorney Lieber: Did you ever discuss with Cindy Testa having sex with somebody ona date where the person fell asleep but maintained an erection?

Attorney Lawless: Object. It is the same objection. This is outrageous, counsel.

Attorney Lieber: Did you discuss with Cindy Testa, at work, discovering that your date had a penile implant and feeling humilated?

Attorney Lawless: Same objections. Counsel, how is this relevant to the case?

Nancy Novack was prohibited by her lawyer from responding to Lieber's questions. Her attorney protested the line of questioning, in fact, by saying this:

“I believe you are engaging in an activity that has been a lifelong way that defendants have been able to sexually harass females for centuries, and that is by saying, if you tell we are going to go into your entire sexual history and make you look bad, we are going to make an issue of your entire sex life, and we are going to embarrass and hu,iliate you publicly.”

But Lieber maintained that it was relevant. “We are not putting th eplaintiff's past sexual history on trial. We are questioning her about statements that we have every reason to believe she made in the workplace to employees.”

Lieber also raised questions about the money itself. Technically, he said, an advance under the circumstances Novack described could not be properly called sexual harassment, since the money in question was a gift or loan and therefore not a quid pro quo arrangement, the way a salary arrangement would be, a position that Novack's lawyer disputed. And, he argued, why would Novack have continued to take money from Shorenstein if he was harassing her, unless that was part of the deal?

Attorney Lieber: I don't think it's a legal matter. I think it's a factual matter. I think it goes to the issue of welcomeness or unwelcomeness. What do you do to protect yourself? Why do you keep going back and asking for money in a situation in which you know is exposing you to the sexual advance? What else did you do, is the question.

Attorney Lawless: I'm not going to permit her to answer that question.
(Sotto voce discussion between the witness and her counsel).
Attorney Lawless: There were many sexual advances that were unrelated to money and I think the record is replete with such instances.

Attorney Lieber: That may or moy not be depending on whose belief. But the issue is also what steps were taken and how did those others, if they occurred, relate to any express or implied understanding about what behaviors was going to be in the workplace in exchange for receipt of certain money?

Attorney Lawless: If that's Mr. Shorenstein's testimony, that he gave money in exchange for sexual favors, I”ll wait and see and then we will reconsider our objection.

Attorney Lieber: We'll be in court long before that, I can assure you.

In fact, the case didn't reach court.
And while Lieber won't discuss the settlement amount, he does have a question for me. He wants to know where he can get a copy of the paper with this story in it.

“You can find the paper on many street corners in San Francisco,” I tell him.

“I assume I can't find you on any street corners in San Francisco,” he replies.

Now, that's not the public image of Walter Shorenstein. The public image of Walter Shorenstein is much more refined. The public image of Walter Shorenstein involves opera stars, White House state dinners, incumbent presidents, private airplanes, art museums, private dinners in fancy restaurants and overnight stays in the house of the ambassador to France. When Walter Shorenstein appears at all in the Chronicle, for example, chances are it's in black tie, in Pat Steger's column. Shorenstein's daughter, Carole Shorenstein Hays, also makes reguar appearances in Steger's column. When the Shorensteins are interviewed, it's likely to be by one of their own: Last fall, the Examiner's own multimillionaire publisher applied the thermometer to Walter's son, Douglas Shorenstein, in a Sunday business section Q-and-A session that ran with this introduction: “Examiner publisher Will Hearst sat down with [Douglas] Shorenstein recently to take Shorenstein's temperature on San Francisco's business climate, the Giants, and his own aspirations.” The Examiner ran a story with descriptive details about Nanvy Novack's lawsuit, as well as a short piece on the settlement; the Chronicle reported only that the case had been settled.

In addition to helping publicize Walter Shorenstein's social life, the Chronicle Publishing Co. has helped pay for it: The newspaper is listed along with Assembly Speaker Willie Brown, City Attorney Louise Renne, socialite Ann Getty and the Shorenstein Company itself as a sponsor of the Catholic Youth Organization's 1994 awards banquet in honor of Shorenstein.

And chances are, when Walter Shorenstein's name appears in the dailies, it's in connection with political fundraising. Because more than anything else – certainly, in any case, on the national stage – Walter Shorenstein is known for writing checks to Democrats.

Here's Sen. Edward Kennedy, Democrat of Massachusetts, on the CYO dinner's videotaped tribute to Walter Shorenstein:

“I wish I could be with all of you in person tonight but it's a privilege to join you by video in honoring our great friend. No one is more deserving of our tributes and praise. Few people have done as much for their community and their country, and as all of you know we wouldn't have a Democratic Party without Walter Shorenstein.” [page]

Now, the idea of a very rich person being a Democrat is a novelty to some. In a pragmatists's view, however, it makes sense, if the rich person in question is a developer. That's because building things requires close compliance with local laws. Local laws are, by and large, passed by local politicians, who tend to be Democrats.

Since 1980, Walter Shorenstein has given $297,410 to Democratic members of Congress and presidential candidates, according to the Center for Reponsive Politics, in Washington D.C. His now-deceased wife, Phyllis, doled out $141,403 during the same 15 years. His son, Douglas, dropped $67,280; his daughter, Carole, furnished $16,000 from 1979-1984; Douglas' wife, Lydia, provided $2,780; and employees of the Shorenstein Company supplied at least $14,087.

And that's just direct contributions to candidates, limited by law to $2,000 each election. The true measure of Walter Shorenstein's checkbook democracy comes in another form: the fundraising dinner. Getting rich people to py $2,500 to sit at a table with a candidate is an art form in American politics, and no Democrat succeeds at it like Shorenstein. Then, too, there are the $100,000 donations to so-called “soft money” organziations, which rake in the green stuff to spread around like cheese on a cocktail party canape. And then there are the dollars missing from the database because they're almost ancient history. In 1968, for example, Walter Shorenstein “raised more money than any other American for Hubert Humphrey,” longtime San Francisco political consultant Duanne Garrett says. “I had Humphrey tell me once that Walter had almost made the difference between victory and defeat. He's been a huge player in American presidential politics ever since and he's been a big player for Congress. He's been close to every speaker, every majority leader.”

Not to mention presidents: “Walter has found time to be active in Democratic politics. I am but one of many politicians who owe a great debt to him,” Jimmy Carter said on the CYO video tribute.

And vice presidents: “Thank you for being a friend,” Al Gore said.
“He's always played in all the venues,” Garrett says. “I've heard three separate Democratic presidential candidates call Walter Shorenstein 'Mr. Democrat.'”

And in at least one case, it would have been possible to call the Democratic Party “Mr. Shorenstein.”

In the mid-'80s, Walter Shorenstein formed a political action committee – still up and running – called Agenda for the '90s. Like all PACs, the point of Agenda for the '90s is to raise money for politicians. During the first years of Agenda for the '90s, he used the PAC, formed with labor leader Bruce Lee, to pour money into the California Democratic Party.

“It was huge, the last term that I was chairman,” remembers Los Angeles attorney Peter Kelly, who was chair of the state party while Michael Dukasis was running for president. “We did three $1 million-plus dinners in 13 months.” And ran the money through party accounts, Kelly says.

Then the party leadership changed, as happens every few years. Kelly was out as chairman: Jerry Brown was in. Agenda for the '90s kept raising money for Democratic candidates, as it always had, but there was a twist: The money went straight to the candidates.

“People didn't trust Jerry Brown's judgement,” says Burton, the state representative, hinself the recipient of Shorenstein donations. “Walter was not going to go out and raise money for Jerry Brown to do with what he wished. People who raise money like to have a say in how it's spent.

“It just happened,” Burton explains. “Except for Jerry Brown, I don't think anybody in public office was upset with what Walter did.”

Of course, getting to choose which candidates receive money from a powrful political action committee is not entirely dissimilar to getting to choose who runs for office, which is the province of machine politics. And that is something that at least one other Shorenstein – Hymie Shorenstein, of 1930s Brroklyn – knew a little bit about.

The word on Walter Shorenstein' s uncle comes from none other than Theodore H. White, in whose Pulitzer Prize-winning book, The Making of the President 1960, the elder Shorenstein appears.

“Hymie Shorenstein was the large, rotund leader of the Brownsville section of Brooklyn, many years ago, when that community was still solidly Jewish,” White writes. “One year, so the well-worn story goes, as the politicians divided up the local nominations, it was given to Shorenstein to choose a Democratic candidate for judge as his share of the patronage.” That year, Franklin Delano Roosevelt was running for president. Because Shorenstein believed that a big name at the top of the ticket pulls other candidates along with it, Shorenstein didn't do any campaigning on his local candidate's behalf, White writes. When the worried candidate asked Shorenstein why he wasn't doing more, the old pol told him: “Listen. Did you ever go down to the wharf to see the Staten Island Ferry come in? You ever watch it, and look down in the water at all those chewing-gum wrappers, and the banana peels and the garbage? When the ferryboat comes into the wharf, automatically it pulls all the garbage in too. The name of your feryboat is Franklin Delano Roosevelt – stop worrying!”

Just as committed to politics as his uncle, Walter has a different strategy. “He thinks of himself as a kingmaker in local politics,” says attorney Sue Hestor, the high-rise opponent. “And in the course of events he tends to be courted by politicians who want his money.”

Walter Shorenstein makes that easy for them, in a way, by backing more than one horse at a time. In the 1991 mayoral campaign, for example, he donated to incumbent mayor Art Agnos while employing challenger Angela Alioto, a supervisor, as his lawyer. More recently, he's given money to Supervisors Susan Leal, Mabel Teng, Kevin Shelley and Carole Migden, to ex-supe Annmarie Conroy, as well as to Mayor Frank Jordan. [page]

“When Walter Shorenstein calls you – if you're an elected official, that's money talking,” says housing advocate Calvin Welch.

Politicians are not, however, the only beneficiaries of Walter Shorenstein's money. The list is much more comprehensive than that. There's the United Way, for one. He has helped the Catholic Youth Organization raise money and the Jewish Community Federation acquire the land its building sits on now. After the Loma Prieta quake, he produced $100,000 for Red Cross relief efforts. He's given $1 million gifts to both Cal and Stanford. He's given $10 million to Harvard, where the Joan Shorenstein Barone Center at the Kennedy School of Government is named after his daughter.

He gavee a million, too, for a Pacific Rim conference in 1990, which brought think-tankers in from the four corners to pull their chins about how to turn San Francisco into a “Geneva of the Pacific.”

There's the million-dollar donation for the UN50 celebration: In 1990, Shorenstein first broached the idea at a consular lunch. “I propose that we in San Francisco join forces to commemorate the 50th anniversary of the birth of the United Nations in San Francisco in 1995,” a copy of the speech says. “This is a great opportunity for San Francisco, and, once again, we can 'rise to the occasion.'” Then he put up $1 million for the celebration he proposed – seed money, to get the grass growing. “We wouldn't be anywhere without Walter Shorenstein,” said Frank “Sandy” Tatum, chairman of the UN50 celebration.

And as the Vietnam War was drawing to a close, Walter Shorenstein helped pay for infants and children to be flown from Saigon to San Francisco. The airlift wasn't universally popular: The Vatican, for one, condemned it as a propaganda stunt. But neither was it universally abhorred. Walter Shorenstein was right in the middle of it. “As a matter of fact,” says Mariz Eitz, the airlift organizer, who personally asked Walter Shorenstein for the money, “without his help it would not have been possible.”

At the dinner the Catholic Youth Organization have last year to honor Walter Shorenstein, newsreel footage – part of a video montage narrated by Vice President Gore – showed Shorenstein standing in the sunshine, in his shirtsleeves, on a runway, holding an airlifted baby in his arms. He's staring very intently at the childm holding it tightly. In the old footage, his hari and his sunglasses are equally dark.

“I find Walter to be one of the most interesting people I've ever met,” says Ellen Hume, the former Wall Street Journal reporter who was director of the Joan Shorenstein Barone Center at Harvard. “He has a really unusual generosity.”

“He has a real strong sense of paying back and a real strong sense of responsibility to the community,” says Duane Garrett, the political consultant.

“We honor you, Walter,” Sen. Edward M. Kennedy said on the CYO tape, “for all the ripples of hope you sent out and the extraordinary difference you've made in all our lives and the life of our country.”

And yet, there are areas of San Francisco where Walter Shorenstein's influence has not been so widely appreciated.

On the corner of Kearny and Jackson is a vacant lot. At one time, Walter Shorenstein planned to put a parking garage there. In 1968, however, when he bought the property, a building was in his way. The building was called the International Hotel. The I0Hotel was the last remaining stand of what once had been Manila Town, a 10-block community of stores, pool halls, rooming houses and restaurants that was losing a war of attrition with development in the Financial District. And it was a place of last refuge foe the Filipino old-timers, who lived in the hotel's small rooms for $50 a month, sleeping on narrow single beds, storing their belongings in dresser drawers and a closet. Some of the old-timers had lived in the hotel for 40 years. Others were more transient. Many had no place else to go.

“It was a real community,” says Curtis Choy, a filmmaker whose award-winning documentary, The Fall of the I-Hotel, tells a story of the vacant lot. But that's not the way Shorenstein saw it. In Choy's film, a man identified as an attorney for the Milton Meyer Company, which Shorenstein owned, says, “The property and improvements on it are in such bad condition that they don't lend themselves to being renovated.” According to an interview he gave at the time, Shorenstein considered the building a slum.

In 1968, the I-Hotel's old-timers received eviction notices, telling them to be out on New Year's Day, 1969. Thus began a nine-year street brawl over – in general terms – the future of the city. Born as much of ideology as practicality, the battle over the I-Hotl pitted downtown developers and the city government against community preservationists, affordable housing advocates and the radical students of, among other places, SFSU.

The way Curtis Choy's film tells the story, there was a point at which the Milton Meyer Company offered the tenants long-term leases. The night before the leases were to be signed, a fire broke out in the hotel and killed three people, Choy's film contends. Then, the film says, the lease offer was withdrawn and, later, Shorenstein sold the building. The new owners persisted with plans to take it down. In 1977, police officers fought their way through a human barricade ringing the hotel to evict the tenants. Later that year, the hotel was demolished. There are new plans to erect a school and an elder-care residence on the site, but financing isn't certain yet. As of now, the lot has been vacant for 18 years. [page]

“I don't know if people blam ehim,” Choy says, “but he is certainly not considered a friend of this community.”

There's another vacant lot in San Francisco that belongs to Walter Shorenstein, across the street from his boxy brown Bank of America building. Mid-APril, the lot is a sea of green, weeds grown as tall as trees, flowers wrapped around rusted steel, bricks and dust and the sense of something that almost happened, but did not. At the edge of the lot is a sign promising a future office building, with the Shorenstein Company's name and number attached. In fact, the lot has been vacant since Shorenstein was blocked by mid-'80s growth limits from building a scraper there. People point to the lot as proof that Walter Shorenstein's clout, whatever it once was, has waned. As if the presence, city center stage, of Walter's 40-year-old son Douglas is an entirely separate phenomenon.

“It's kind of strange you're doing an article about Walter Shorenstein,” says Randy Shaw, a Tenderloin housing advocate. “He's the tip of the tongue – his son has kind of taken the banner.”

“Walter's not involved anymore,” says state Sen. Quentin Kopp, who recently received a $1,000 donation from Douglas. “I talk to Doug.”

“Walter is a very old man now,” says affordable-housing advocate Welch. “His son Doug is coming on – but Doug is merely walking down the path beaten by his father. He's in his father's position, in how he plays politics – significant contributions and a lot of phone calls after the election.”

This year, Douglas Shorenstein is the chairman of the Committee on JOBS, a group of corporations deeply involved in local politics. (Peter Fatooh, the assessment appeals board member, is the Shorenstein Company's deputy on the committee.) JOBS members call the city supervisors, meet with them over lunch, attend board meetings and raise money for supervisor elections and ballot propositions. Here is a sample committee fundraising letter, written on behalf of Supervisor Carole Migden, signed by Douglas Shorenstein:

“In order to assure that the business communty continues to have a strong voice in the future of our city, it is important that we each do our fair share by promptly making our contributions. Similar to our other events, we are counting on you to bring as many $500 contributions as possible from you, your colleagues, friends and/or businesses. We strongly urge each company to be responsible to raising at least four $500 checks.

The $500 amount isn't an arbitrary number. It's the limit to what an individual can give to a candidate for a local election under the state law. What Douglas Shorenstein's letter recommends is called bundling – a legal way to get around campaign limit contributions. Just in case anyone misses that point, he spells it out:

“Each individual may contribute $500 and each separate U.S. business entity (corporation, subsidiary, partnership, etc.) may also contribute $500 per election. Therefore, you, your colleagues, spouse and friends can each give $500 and your company and other related separate subsidiaries and partnerships may each give $500.” (Emphasis in the original.)

And what kind of demands does the Committee on JOBS make in return for its fine fundraising activities? Well, former city supervisor Jim Gonzalez can shed a little light on that subject.

In 1992, Gonzalez was chairman of the Board of Supervisor's finance committee, a position something like being the first skeet airborne at a rifle range. The committee contacted Gonzalez, he says, and demanded that he pledge not to raise payroll taxes. Gonzalez declined that invitation, he says. The committee also asked him not to support a real estate transfer tax, which would raise money for affordable housing, he says. Gonzalez balked on that, too.

“Doug Shorenstein never made any threats, never made any quid pro quo representations to me,” Gozalez says. “I think that what he did say to me is if you want to get the support of the Committee on JOBS, you're going to have to do this.”

In 1992, Gonzalez lost his bid for re-election. In total, he raised $160,000 for his campaign. Four years earlier, he collected $100,000 more than that – and he wasn't even an incumbent. In crossing the committee, Gonzalez says, “I knew my campaign budget was at risk and when your campaign budget is at risk I knew my election was at risk.”

Gonzalez does want to make one thing clear, however. The Shorensteins – Walter and Douglas – gave him money for his campaign personally, right up to the limit of personal contributions, after the falling-out with the Committee on JOBS, and helped Gonzalez retire his campaign debt after he was out of office.

Of course, there's nothing like a graceful winner to make everybody look good.

If Douglas Shorenstein is carrying on his father's business and political legacy, two other Shorenstein children – Carole and, posthumously, Joan – fulfill the arts and letters part of any dynasty's hertiage requirements.

Carole Shorenstein Hays is a theater producer who imports Broadway hits to the Tenderloin. A star in one of her productions, Phantom of the Opera, sang at Opening Day this year for the Giants. Behind him, on the Jumbotron, the name of the Curran Theatre – which Walter owns – blazed.

Then there's the Shorenstein Center at Harvard.
Joan Shorenstein Barone was a Washington journalist who died in 1985 of cancer, at the age of 38. After Barone died, her parents, Walter and Phyllis, gave Harvard $10 million to establish the center in her name at the Kennedy School of Government.

The proper name of the center is as follows: The Joan Shorenstein Barone Center on the Press, Politics and Public Policy. Only nobody calls it that. “Shorenstein Center,” they say, when they answer the phone. For all practical purposes, it's Walter's handle on those ivy walls. [page]

Last year, Walter Shorenstein's wife, Phyllis, died. They had been married 49 years. In her will, Phyllis leaves her estate to her husband, to Douglas and to Carole, bringing the family fortunes one step closer to dynastic succession. But dynasty is an elusive phenomenon. Like buildings, a legacy can be demolished faster than it can be constructed. Indeed, history – in particular, the story of the Medici of Florence – shows that power contains the seeds of its own destruction, sowing an inevitable discontent in the minds of the ruled, like grass growing wild up through stone and cement. Scrape it, clean it, sweep it up: It comes back, stronger each time.

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