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San Diego Union-Tribune

DON BAUDER

Chargers follow playbook: Do well, get a new stadium

October 4, 2002

Abstract:
Former Councilman Bruce Henderson, now a member of the city's Chargers task force, says it is now obvious that the Chargers' problem is not Qualcomm. Big problems were the perverse incentives of the 60,000 seat guarantee and other conditions of that repugnant 1995 contract between the city and the team.

Among many things, it charges that Enron, encouraged by [Jeffrey Skilling], funded the Harvard Electricity Policy Group, which urged the California Public Utilities Commission to deregulate along the so- called "Enron model."

HarvardWatch points out that an Enron director was also a member of the Harvard Corporation, which runs the university. While Enron was spinning out of control, one of Harvard's money managers made a bundle of money for the university by buying Enron put options -- betting the stock would go down. Good bet. HarvardWatch wonders if inside knowledge might have been passed along.

Full Text:
Copyright SAN DIEGO UNION TRIBUNE PUBLISHING COMPANY Oct 4, 2002

Beggars can't be losers.

Pardon my cynicism, but I am not surprised that The New York Times' football ranking has listed the Chargers as the best team in pro football.

At some point, the public will figure out that the pro sports team that is begging for a public subsidy almost always winds up a winner in the year in which the matter comes to a vote.

It's in the leagues' playbooks. You put together a winner and threaten to move out of town.

Remember the Padres in 1998? They rented the best pitcher in baseball for the year in which there would be the ballpark vote. The following year, the pitcher was gone. So were other good players.

The team has been lousy since, but attendance at Qualcomm has been very good. Indeed, last season, the Padres' attendance was 17th among 30 teams, at an average 27,414 per home game. Ending up 30 games under .500, the team was hardly the 17th best in baseball. Only a handful of teams did worse on the field.

The Chargers, too, wangled the egregiously favorable Qualcomm renovation contract the year after they went to the Super Bowl. Then the team's performance went south.

Admittedly, close observers of today's Chargers point out that the team spent money in recent years, but not wisely. The team is better this year, not because it spent more money, but because it made better football decisions, they say.

Maybe so. But for some reason, the owners finally hired solid coaches for this season and made better personnel decisions. One thing is obvious to me: The Chargers are going down two tracks. They would like to move to the lucrative Los Angeles market if the opportunity arises, but if it doesn't, they want to get a new stadium commitment from San Diego. For either strategy, they want a good team this year.

Former Councilman Bruce Henderson, now a member of the city's Chargers task force, says it is now obvious that the Chargers' problem is not Qualcomm. Big problems were the perverse incentives of the 60,000 seat guarantee and other conditions of that repugnant 1995 contract between the city and the team.

"The Chargers want to look their best for their bid for Los Angeles," says Henderson.

Fight fiercely
In recent years, there has been ferocious competition between the business schools of Harvard and Northwestern. Various publications have listed one or the other as the nation's best business school.

There's now a slight advantage to Harvard -- maybe. Andrew Fastow, the former Enron chief financial officer, now charged with fraud and conspiracy, is a grad of Northwestern's Kellogg B school, as is his wife.

Jeffrey Skilling, former Enron chief executive officer, is a Harvard MBA. He has not been charged yet. Unlike Fastow, he did not take the Fifth Amendment in front of Congress.

Harvard may not be home free. There is a delightful group named HarvardWatch, a coalition of Harvard students and alumni who look into alleged faculty and administration ethical missteps.

Among many things, it charges that Enron, encouraged by Skilling, funded the Harvard Electricity Policy Group, which urged the California Public Utilities Commission to deregulate along the so- called "Enron model."

HEPG in turn promoted energy deregulation reports by Skilling, the university's then-distinguished alumnus. HarvardWatch also says that when Harvard's president Lawrence Summers was U.S. Treasury secretary, he assured Enron's Kenneth Lay, "I'll keep my eye on power deregulation and energy-market infrastructure issues."

HarvardWatch points out that an Enron director was also a member of the Harvard Corporation, which runs the university. While Enron was spinning out of control, one of Harvard's money managers made a bundle of money for the university by buying Enron put options -- betting the stock would go down. Good bet. HarvardWatch wonders if inside knowledge might have been passed along. Harvard has vigorously defended itself against the various charges by HarvardWatch.

Don Bauder: (619) 293-1523; don.bauder@uniontrib.com



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