Powerful SD Union Leader Behind 101 Ash Deal Remains Silent on Growing Scandal

The leader of the City of San Diego’s largest employee union, responsible for protecting City employees’ best interests, remains silent even after documents prove City officials knowingly put hundreds of his members at risk of asbestos exposure and fire danger in the 101 Ash Street building.

Michael Zucchet, who served on the Council from 2002 to 2005, is General Manager of the Municipal Employees Association (MEA) which represents over 4,000 of the City’s 11,000 employees not covered by the separate police, firefighter, and blue-collar workers’ unions. Zucchet was a vocal supporter of the City’s plan to acquire the ill-fated 101 Ash St. building in 2016.  In an email from the City’s then-Deputy Chief Operating Officer Ron Villa to other staffers when the 101 Ash deal was being considered by the Council in September 2016, Villa wrote that they “would look forward to having at the minimum of (Firefighters Union Local 145) and MEA to show their support for our employees.” The following month, Zucchet spoke in favor of approving the 20-year lease-to-own deal before the City Council on October 17, 2016, saying “we’re fully supportive of this, we appreciate very much your efforts” in expressing MEA’s support for the deal.

<div class="wp-block-image"><figure class="aligncenter size-large is-resized"><img loading="lazy" src="https://laprensa-sandiego.org/wp-content/uploads/2021/09/pic_zucchetSDC…; alt="" class="wp-image-54634" width="525" height="398" srcset="https://dev-laprensa.pantheonsite.io/wp-content/uploads/2021/09/pic_zuc… 700w, https://dev-laprensa.pantheonsite.io/wp-content/uploads/2021/09/pic_zuc… 300w" sizes="(max-width: 525px) 100vw, 525px"><figcaption>Michael Zucchet speaking in favor of 101 Ash St deal. <a href="http://sandiego.granicus.com/player/clip/6805?meta_id=638075&redire…; data-type="URL" data-id="http://sandiego.granicus.com/player/clip/6805?meta_id=638075&redire…; target="_blank" rel="noreferrer noopener">WATCH VIDEO</a></figcaption></figure></div>

Zucchet was in favor of the deal put together by then-Mayor Kevin Faulconer, championed by City Councilman Todd Gloria, and approved unanimously by the City Council.  The City Council gave final approval of the building deal on November 14, 2016, and City Attorney Mara Elliott signed the lease document on December 19, 2016.

POLITICAL PAYOFF

Just six months after the deal was approved, Zucchet was appointed by the City Council to serve as one of the City’s three Commissioners on the San Diego Unified Port District’s Board, a powerful local post and high-profile political appointment.

As a Port Commissioner, Zucchet is a fiduciary for the City’s best interests, but as the union leader, he a fiduciary for his members to get them better pay and benefits, as well as defend them from wrongful termination or other adverse actions taken by the City. Over the next three years, the City spent approximately $30 million to renovate the 101 Ash building, but in January 2020, the County shut the building down over repeated exposure of cancerous asbestos material.

In August of 2020, as the controversy over the shuttered building was becoming a hot political issue in the mayor’s race between Councilwoman Barbara Bry and former Councilman Todd Gloria, Zucchet penned an article in the San Diego Union-Tribune titled “<a href="https://www.sandiegouniontribune.com/opinion/commentary/story/2020-08-1…; data-type="URL" data-id="https://www.sandiegouniontribune.com/opinion/commentary/story/2020-08-1…; target="_blank" rel="noreferrer noopener">101 Ash Street is the Taj Mahal compared to other city property</a>.” Zucchet made arguments in the article defending the deal that haven’t aged well as the truth behind the building deal continues to trickle out.  “Based on all the publicity, you might think it is the crummiest building the city owns or leases — riddled with asbestos and saddled with plumbing, electrical and air systems that are past their useful life,” Zucchet wrote. “In fact, 101 Ash is the nicest, most modern, functional office space the city controls.”

Zucchet exaggerated the usefulness of the building and falsely claimed it to be in better condition than plainly superior office spaces in the Civic Center Plaza building which the City bought the year before signing the 101 Ash deal, as well as a City-owned building in Kearny Mesa which houses critical disaster preparedness personnel and the City’s newest Emergency Operations Center (EOC).

During the same period, Zucchet’s union was helping fund an independent expenditure committee that spent over $1.4 million in support of Todd Gloria’s campaign for Mayor against Councilwoman Barbara Bry. Other major funders of the committee were the San Diego Regional Chamber of Commerce headed by former Mayor Jerry Sanders, the San Diego Police Officers’ union, and several other employees’ unions. The committee’s ads attacked Bry who was was one of the biggest critics of the 101 Ash deal. Less than two months after Zucchet’s gushing article, he was elevated to be the Chair of the Port’s Board of Commissioners, leading an agency that oversees all land and development on San Diego’s port lands in the five port cities; San Diego, Coronado, National City, Chula Vista, and Imperial Beach.

Some critics have raised concerns that Zucchet has a conflict of interest or, at minimum, of conflicting duties of loyalty, by serving on the Port as a political appointee of the same City Council which he lobbies for his union.

None of the six other Port Commissioners have jobs where they work both with and against the same Council that appoints them.

Confronting the City on its actions and inactions on the 101 Ash building would expose City officials who Zucchet interacts with both on union and Port business, and would put political pressure on the same elected officials who appoint and re-appoint Zucchet to the Port position. REPRESENTING EMPLOYEES’ INTERESTS

When La Prensa San Diego discovered emails and documents proving that high-ranking officials within Mayor Kevin Faulconer’s administration pushed over 1,000 employees into 101 Ash knowing that the building’s fire-life-safety systems were inoperable, we reached out to Zucchet and his office by email, phone messages, and a message with his office staff for an opportunity to comment.

No response to our requests for comment were ever received from Zucchet or his union. On February 19, 2021, La Prensa San Diego published the <a rel="noreferrer noopener" href="http://laprensa-sandiego.org/101ashfirehazard/" data-type="URL" data-id="http://laprensa-sandiego.org/101ashfirehazard/" target="_blank">first of several articles</a> detailing the emails between City staffers and contractors discussing the lack of fire inspections and non-functioning safety systems just days before employees were moved in. Another<a rel="noreferrer noopener" href="http://laprensa-sandiego.org/101firewarning/" data-type="URL" data-id="http://laprensa-sandiego.org/101firewarning/" target="_blank"> article on February 28, 2021</a>, detailed complaints from employees who were in the building for the few weeks between mid-December 2019 and mid-January 2020 before the building was shut down by the County Air Pollution Control District over the loose asbestos material.  On December 27, 2019, for example, staffer Elvia Sandoval had emailed the MEA about extremely cold temperatures in the building when the air conditioning and heating systems were not working, making office spaces unbearably cold.

“The temperature inside the offices are very cold and almost as cold as outside. We are wearing many layers of clothing, our jackets, beanies, gloves, and blankets to try to keep warm,” Sandoval wrote. “We are told by [Real Estate Assets Department] that they are still working on balancing the system but don’t know how long that will take. However, we got a little inside scoop (can’t say from who) that the cooling/heating system is in need of major repairs because the pipes are leaking and the heat can’t make it to the offices suites and the cost to repair or install something else would be astronomical.”

A union official responded that the MEA offices were closed for the holidays until January 2nd and that the message was sent to two union reps that “may be able to respond.” It’s not clear if the union contacted anyone at the City to investigate the temperature issues.

A few days later, Deputy Public Works Director Luis Schaar, a Professional Engineer, emailed Assistant COO Ron Villa with temperature readings from throughout the building, confirming the building fell below the acceptable temperature range of 68 and 76 degrees Fahrenheit recommended by OHSA.

“4th floor low-56 to high 66 as of right now, 5th floor low-60 to high 64 as of right now, 9th floor low-65 to high 67 as of right now, 10th floor low- 57 to high 64 as of right now, 11th floor low- 58 to high 64 as of right now, 17th floor low-56 to high 62 as of right now,” Schaar included in his email.

Employees working in the cold offices began to use small space heaters to help keep themselves warm, which created an increased fire hazard in a building without functioning fire-life-safety systems. The employees had no idea they were putting their own lives at risk.

It is not apparent from emails disclosed by the City that the MEA took any actions to address the employees’ concerns with the building, but the issue of the fire safety threat became moot just a few weeks later when the County forced the evacuation of the building over the asbestos exposure.

Now nearly seven months later, MEA has still not publicly addressed the issues related to the 101 Ash debacle or, specifically, the City’s deliberate use of the building knowing the fire systems did not work that put employees at risk.

Evidence has now proven that the condition of the building was not as the sellers and the landlord, Cisterra Development, represented to the City and the public. Independent consultant reports have documented that the plumbing, electrical, and mechanical systems of the building are mostly inoperable and most are beyond their useful life. Most of the systems are so outdated that they cannot be repairs and must be completed replaced. Several City employees interviewed by La Prensa San Diego have expressed frustrations with their union for not protecting them or even criticizing the City for knowingly forcing them into a dangerous building. Several lawsuits have been filed by employees over exposure to asbestos and retaliation toward whistleblowers, but none of those employees were encouraged to file or supported by the union.

Even as the 101 Ash building remains empty, the City is still legally liable for the existing lease deal and still owes over $18,000 per day in rent. Although lawsuits have been filed by the City and a local taxpayer to invalidate the lease deal, those cases have not reached a court to decide whether the long-term lease-to-own agreement will continue.

If the City ends up having to continue paying for the building, construction estimates for needed repairs to make it useable range up to $110 million, in addition to the total of $128 million in lease payments the City must make under the agreement. No one in the real estate market believes the building deal makes financial sense for the City if the repair costs are added to the cost of acquiring the building.

The 101 Ash Street deal could end up being one of San Diego’s most costly financial debacles, ranking at the top with the pension underfunding scheme and the infamous stadium ticket guarantee deal with the Chargers.

BEING IN THE ROOM WHERE IT HAPPENED

Zucchet has worked his way into the top levels of San Diego politics where critical -yet sometimes controversial- decisions have been made.

A San Diego native, Zucchet worked as a renewable energy economist in the US Department of Energy in Washington, D.C. after earning a BA in Business Economics and Environmental Studies from the University of California, Santa Barbara, and a Master’s degree in Environmental Economics and Policy from Duke University.

He entered politics in San Diego in 1996 as a City Council staffer then, two years later, became the governmental affairs director of the City’s powerful firefighters’ union, Local 145.

During the time Zucchet advised the firefighters’ union, their President, Ron Saathoff, served on the City’s Pension Board that voted to underfund the City’s pension system in a scheme to free up more money to spend on other City services.

As a result, firefighters -including Saathoff- received pay and pension increases that added to the City’s pension deficit. Saathoff and five other pension board members were indicted on conflict-of-interest charges which were later dropped.

In 2002, Zucchet, a Democrat, ran for City Council and defeated a local Republican lobbyist: Kevin Faulconer. Zucchet represented the beach areas of Point Loma, Ocean Beach, and parts of downtown.

Upon taking office, Zucchet was replaced as the firefighters union’s governmental affairs director by former trash company lobbyist Johnnie Perkins, who would later end up serving as Deputy City COO overseeing the disastrous 101 Ash St renovation project and was one of the high-ranking City officials who knew the building was unsafe before employees were moved in.

Just eight months into his first year in office, Zucchet was indicted along with two other Councilmen, Ralph Inzunza and Charles Lewis, over alleged bribes they took from people connected with the Cheetah’s strip club in Kearny Mesa.

The FBI had already been investigating people within the strip club industry in Las Vegas over political corruption there, but a series of meetings by one of the targets of that investigation led the FBI to another scheme in San Diego.

Court documents in the trial alleged that Councilman Ralph Inzunza was approached in 2002 by Lance Malone, a former Las Vegas cop and associate of the Cheetah’s strip club owner, for support in eliminating the City’s “No-Touch” rule which prohibited patrons from touching any of the performers.

According to testimony and surveillance recordings, Inzunza agreed to work to remove the no-touch rule and recruited Zucchet and Lewis to help.

After receiving campaign contribution checks from Malone, Inzunza connected him with Zucchet, who was a candidate for City Council at the time and who Inzunza was recorded as calling “my boy.”

Zucchet met privately with Malone in mid-2001 and Malone later delivered $5,000 in contribution checks for Zucchet’s campaign. Zucchet was elected in November 2002.

After his election, Zucchet and Inzunza met with Malone to discuss repealing the No-Touch rule which would first have to pass the Council’s Public Safety committee of which Zucchet was a member.

“Malone and Zucchet had breakfast on April 16, 2003, and Zucchet stated that he would ‘do the lifting at the committee level.’ Zucchet confirmed the plan with Inzunza,” prosecutors alleged in court documents. At the meeting, according to a transcript obtained in the investigation, Malone outlined a plan where a resident of Zucchet’s district would speak at the Public Safety committee and ask for the City to expand the distance required between strip clubs and other uses like churches, schools, and homes, and that would give the Councilmembers the opening to slip in language to remove the no-touch rule. But before the plan was put into motion, FBI agents raided the Councilmembers’ offices on May 13, 2003, and Zucchet, Inzunza, and Lewis were indicted by a federal grand jury three months later on multiple federal charges of fraud and extortion.

The councilmembers were each released on $25,000 bail and remained in office while they fought the charges.

Councilman Lewis died of liver disease before the trial and his charges were dropped after his death.

During Zucchet and Inzunza’s trial in mid-2005, another political scandal broke stemming from the pension underfunding which by then had grown to an estimated $2.2 billion. As FBI and SEC investigations continued, Mayor Dick Murphy abruptly resigned on July 15, 2005.

Zucchet, who was the ceremonial Deputy Mayor on the City Council, became acting Mayor to carry out the duties of the City’s chief executive.

But just three days later, Zucchet and Inzunza were convicted of multiple felony charges and, under state law, both were immediately suspended from their duties. Both resigned from office the next day. Zucchet had only served as acting Mayor for three days.

Both Zucchet and Inzunza appealed their convictions and, four months after the trial, the Judge dismissed seven of the nine convictions against Zucchet and granted a new trial on the two remaining charges. The judge ruled that there was not sufficient evidence to have convicted Zucchet of a quid pro quo, but he upheld all of the charges against Inzunza.

Prosecutors later decided not to retry Zucchet on the remaining two charges.

Inzunza eventually lost his appeals over a six-year process and ended up serving a 21-month sentence in federal custody between January 2012 and August 2013. For his part in the scheme, Malone was sentenced to three years in prison which he served concurrently with a six-year sentence he received in a Las Vegas bribery case. Zucchet’s vacancy on the City Council was filled in a special election won by Kevin Faulconer in January 2006.

Faulconer was later re-elected to two full terms on the City Council before winning another special election in 2014 to become Mayor after Bob Filner resigned when he was accused of sexual harassment. Faulconer ended his two terms last December.

Zucchet began his career with MEA in 2008 as a negotiations consultant then became the General Manager in May 2009.

Today, Zucchet continues to serve as the Chairman of the Port District Board. His current Commissioner term expires in January 2023.

Outside of his day-to-day work, Zucchet is an avid poker player and has won over $154,000 in tournament prize money. Zucchet’s biggest win came in 2013 at the World Series of Poker in Las Vegas where he finished 5th in an event to claim a $143,642 share of the prize pot. Zucchet has a <a href="https://www.wsop.com/players/profile/?playerID=40851" data-type="URL" data-id="https://www.wsop.com/players/profile/?playerID=40851" target="_blank" rel="noreferrer noopener">player profile on the World Series of Poker website</a>.

Photo credit: WSOP.com, Caesars Interactive Entertainment, Inc.

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