Summary
Conrad Arnholt Smith (known as C. Arnholdt Smith) (March 13, 1899 in Walla Walla, Washington – June 8, 1996 in Del Mar, California) was a leading banker, businessman, civic booster, political fundraiser and felon in San Diego, California.
Personal life edit
Smith was born in Walla Walla, Washington. His family fled to San Diego in 1907 when his father faced prison for perjury in a political case. Smith grew up poor and never finished high school. He became a bank teller, and impressed A.P. Giannini, who moved him rapidly up the ranks of the Bank of Italy (what later became Bank of America). He married his first wife Lois Seaver Smith in 1922.[1] He had one son, C. Arnholt Smith, Jr., and a daughter, Carol Smith Shannon. In the 1970s, he married Maria Helen Alvarez.
Businessman edit
With financial help from his brother in the oil business, Smith bought the United States National Bank of San Diego in 1933 which grew from modest roots to the largest bank in San Diego and 10th largest in California. The bank came with interests in other businesses, notably National Iron Works, which became a prominent ship builder and is today a division of General Dynamics. In this way, Smith became not only a banker, but a businessman with diverse interests. He became the most prominent civic leader in San Diego.[2]
He owned the largest bank in the city, had major interests in the tuna industry and real estate, and owned the San Diego Padres of the National League from their inception through 1974. Originally, he purchased the minor league Padres of the Pacific Coast League in 1955. He was awarded one of two National League expansion franchises slated to start in the 1969 season (along with the Montreal Expos). After failing in an attempt to move the Padres to Washington, D.C., he sold the team to McDonald's founder Ray Kroc.
Smith was a close friend of President Richard M. Nixon, and was with him on election night when Nixon won the presidency in 1968. Smith raised a reported $1 million for Nixon's 1968 presidential campaign, including $250,000 from him personally.[3] Smith donated $200,000 to his re-election campaign in 1972, but the money was returned because Smith was under investigation by the SEC and IRS.[4]
Smith's non-bank interests were collected as the Westgate-California Corporation, in which his family kept a majority of voting interest. Westgate-California had interests in real estate, seafood canneries, silver mines, and transportation companies, including Air California. Smith was a major investor in San Diego's third largest industry, tuna. When Japan started offering cheaper tuna after 1950, Smith worked to break the union using new technology and Peruvian canneries.[5]
Prison edit
Smith's base was ownership of the United States National Bank in San Diego, of which he had purchased controlling interest in 1933. The bank grew to become the 86th largest bank in the country with $1.2 billion in total assets. The bank failed in October 1973, at which time it was the largest bank failure in history, due to an excessive level of bad loans to Smith-controlled companies, which exceeded the bank's legal lending limit.[6] In August 1973, the Internal Revenue Service sued Smith for $23 million for back taxes. The IRS filed criminal charges in the case but they were later dropped.[7] In 1975, Smith pleaded no contest to bank fraud charges and was placed on probation and fined $30,000.[8] That same year, Smith was sued by the Federal Deposit Insurance Corporation for $45 million for engaging in "unsafe and unsound" banking practices.[9] In 1977, a judge ordered Smith jailed for contempt because he refused to answer questions regarding his personal finances.[10] In 1979, Smith was convicted of embezzlement of $8.9 million and tax fraud, involving his sale of the San Diego Padres.[11] He served eight months in a county minimum-security Work Furlough Center in 1984 and 1985; his sentence was reduced due to his poor health.[12] He died, penniless,[13] in 1996 of congestive heart failure at age 97.
Notes edit
- ^ "C. Arnholt Smith, in his own words – part 1". San Diego Reader. March 19, 1992.
- ^ Kevin Starr, Golden Dreams: California in an Age of Abundance, 1950-1963. (2009) p 63–66.
- ^ Tampering With Justice in San Diego Life magazine March 24, 1972
- ^ Nixon Campaign Gifts Revealed Bangor Daily News September 28, 1973
- ^ Kevin Starr, Golden Dreams: California in an Age of Abundance, 1950-1963 (2009) p 65–66
- ^ The Comptroller and the Transformation of American Banking, 1960-1990 By Eugene N. White. Diane Pub Co. 1992 [1]
- ^ Arnholt Smith Case Dropped by I. R. S. The New York Times June 26, 1974
- ^ California, Alabama Banking Cases Reflect Tough Jury Attitudes The New York Times June 3, 1979
- ^ C. Arnholt Smith Is Sued; ‘Unsound’ Banking Charged The New York Times February 16, 1975
- ^ Financier Ordered Jailed For Refusing To Testify Bangor Daily News May 13, 1977
- ^ Arnholt Smith Guilty Of Evading Taxes Washington Post May 4, 1979
- ^ Ex-Financier C. Arnholt Smith Released From Custody Associated Press Archive July 21, 1985
- ^ Scam City: C. Arnholt Smith wasn't alone, San Diego Reader, January 20, 2005
External links edit
- Noble, Holcombe B. "C. Arnholt Smith, 97, Banker And Padres Chief Before a Fall". The New York Times. June 11, 1996.
- "San Diego Tycoon C. Arnholt Smith Dies". Los Angeles Times. June 10, 1996.
- San Diego Padres owners
- "Smith Solicits Governor's Aid in Freedom Bid". Los Angeles Times. April 13, 1985.
- "Banking: The Westgate Scandal". Time. October 9, 1973.
- "Final Chapter Written in Saga of Westgate AP". The New York Times. May 6, 1982.