Michael Schaefer dreams the implausible dream: It is a cool, clear October night, and the moon sends a silver shimmer across Chesapeake Bay. The moneyed Republicans of Baltimore--men in black tie, women in furs and diamonds--are funneling into a grand ballroom. They have come to honor, at $500 a plate, the surprising new star of Maryland politics--Michael Schaefer!--who a month earlier stunned opponents by winning the GOP nomination for U.S. Senate. Schaefer is beaming; tonight those ugly problems of the past are forgotten. And who else shows up to make sure the Senate seat stays Republican? "Ladies and gentlemen," a voice intones, "the President of the United States." There to endorse Michael Schaefer, a great American.
And one of California's most notorious slumlords.
Michael Schaefer--lawyer, self-made millionaire, political junkie--is almost giddy as he wheels his Chevette over a cobbled stretch of downtown Baltimore. He is indeed the wild-card candidate, the "what if," in Maryland's Republican senatorial primary Sept. 9. No, he admits, he probably won't get the nomination. But he'll have his fun and make some news. And if that means all of Maryland learns about his troubles back in Southern California, that's OK by him. He says he doesn't care what people think. Under duress, a lot of people say that; Schaefer appears to really mean it.
And that helps explain how Schaefer became the man he is today. Twenty years ago, Michael Schaefer was, at age 28, the youngest person ever elected to the San Diego City Council. Today, he is best known as a slumlord extraordinaire-- a rogue capitalist who made big money in real estate while subjecting his tenants to horrid living conditions and flouting the bureaucratic and legal systems that are supposed to prevent and punish such behavior.
Last April, a Los Angeles Superior Court jury awarded the former tenants of a mid-Wilshire apartment building he owned $1.83 million in damages. The judgment in Gallego et al vs. Schaefer, believed to be the largest ever in a landlord-tenant dispute, made headlines in Los Angeles, and it was easy to imagine landlords throughout the region choking on their morning coffee.
If some people found the size of the award hard to comprehend, many who know Michael Schaefer surely smiled and thought it was about time. His simultaneous careers in law and real estate, his detractors say, are studies in opportunism and manipulation, and the same is true of his increasingly quixotic forays into politics. Schaefer's tactics as a slumlord are typical of the breed, tenant advocates say. But his personality--gregarious, publicity-hungry, sometimes astoundingly candid--is not. Even Schaefer allows that his methods are Machiavellian and his motives sometimes vengeful. "How does the saying go? 'Don't get mad, get even,' " he says. "If somebody does me dirty, I don't easily forget it."
Consider his reputation as a lawyer. His principal client is himself, and he estimates that during the last 10 years he has been involved in perhaps 100 lawsuits as either plaintiff or defendant. His usual strategy, opposing lawyers say, is to stall and clog the system with writs and motions that, regardless of their merit, drive up the other side's costs, perhaps to the point that litigation is dropped or the case settled in Schaefer's favor. Detractors say he abuses the legal system; Schaefer says he is merely using it to full advantage.
As a businessman, he has a knack--a "genius," some associates say--for acquiring undervalued property. "He has absolutely no sense of embarrassment. He'll go in and offer a price that another businessman would be ashamed to offer," one former partner said. "But then he'll walk out with a done deal."
The problem is that Schaefer has kept the maintenance and operating costs in his apartment buildings very low--criminally low, according to the courts. His reputation as a slumlord dates to 1979, when a San Diego judge threatened him with 100 days in jail for fire-code violations but relented after Schaefer made some 11th-hour repairs. In 1982, Schaefer spent six days in Los Angeles County Jail for failing to repair a downtown building.
But for a man who cares deeply about money--"It's nice to be a millionaire," he says--those past troubles pale against the prospect of losing $1.83 million. An appeal is under way.
TO UNDERSTAND THE CASE against Michael Schaefer requires a look back to the first eight months of 1981, to the six-story, 61-unit apartment house at 757 South Berendo St. From the outside, it is a drab building in a working-class neighborhood not far from the Ambassador Hotel and the business towers that flank Wilshire Boulevard. The building provided functional, low-rent units when Schaefer bought it in 1977; by the time he sold it in 1981, it had deteriorated into a harrowing, violent place.