SAN DIEGO — The San Diego County district attorney's office is investigating tape recordings of two conversations during which David L. Malcolm, a Chula Vista city councilman and state coastal commissioner, discussed blowing up an expensive Mission Hills house to collect more than $1 million in insurance, The Times has learned.
Prosecutors are trying to determine whether the tapes are evidence of wrongdoing by Malcolm or whether they were used in an extortion attempt against Malcolm, according to Steve Casey, a spokesman for the district attorney's office.
The tapes, copies of which were obtained by The Times, apparently were recorded in January and February of 1985 in Malcolm's Chula Vista real estate office by William M. Hirsch, who was advising Malcolm about renovation of the house. The tapes were turned over to the district attorney's office on Thursday by Hirsch's attorney, Michael J. Aguirre, who declined to say how the recordings were made.
Contacted D.A.'s Office
Malcolm, in an interview Saturday, said that he was merely leading Hirsch on during the conversations. Malcolm said that he contacted the district attorney's office six months ago to report that Hirsch had tried to use the tapes to extort "hundreds of thousands of dollars" from him and his partner, local businessman Dennis Schmucker.
Casey confirmed that Malcolm had contacted the district attorney's office, but said that investigators had little to go on until they received the tapes Thursday.
"I would have to characterize it as a front-burner investigation," Casey said. "It hasn't been up until now because we haven't had anything with which to work."
No attempt was ever made to destroy the 7,200-square-foot house, which eventually was remodeled and sold in June of this year for $900,000--about half the listed sales price.
On the tapes, a man who identified himself as David Malcolm--his voice often drawn into a whisper--discussed his financial problems with the house, how it should be burned, how the insurance money would be divided, how the arsonist would be paid and the alibi Hirsch should use to throw off investigators. In most cases Hirsch initiated conversation about the proposed arson.
At one point, Malcolm asked Hirsch: "Why couldn't somebody just go in and turn on the gas downstairs, leave the burner on upstairs with a candle burning and when the gas gets to that, it would just blow up?"
Later, Malcolm insisted that Hirsch work quickly. "We got to get that to burn," he said.
Malcolm said Saturday: "Mr. Hirsch himself acknowledges my having 'led him on.' When he realized this, he attempted to extort me.
"My having personally initiated contact with the district attorney's office six months ago, and my full disclosure of all conversations with Mr. Hirsch, speak for themselves," he said.
Malcolm and his attorney, Charles Goldberg, said they have not heard the tapes, but suggested they could have been doctored.
"I don't believe there are any tapes in which (Malcolm) does anything improper," Goldberg said. "Any claims . . . made to that affect are absolutely outrageous, considering the fact that Malcolm continued to pour money into the project and did absolutely nothing to evidence such an attempt."
Malcolm and Goldberg declined to elaborate, however, and would not discuss any conversations between Malcolm and Hirsch.
Schmucker said he, too, first learned of an extortion attempt about six months ago. "The moment I became aware of it," he said, "I alerted the district attorney."
Hirsch, 45, talked to prosecutors five months ago, although he did not turn over the tape recordings until Thursday, one day after he retained a new attorney, Aguirre, who has instructed Hirsch not to comment.
"From the moment I heard about these matters, the tapes were located and immediately turned over to the district attorney's office," Aguirre said. "Whatever the tapes provide, they speak for themselves."
Aguirre denied that his client tried to extort Malcolm and Schmucker. "As far as I know . . . it would be an absolutely, totally false thing to say. All the information's been released. There's nothing to extort anybody about."
Hirsch apparently wired himself for sound and secretly taped the conversations, which were interrupted several times by phone calls. One of the men on the recording answered the phone calls as "David Malcolm."
Malcolm, 32, is a real estate developer who was elected to the Chula Vista City Council in 1982. Malcolm, a Republican, was appointed to the San Diego region of the state Coastal Commission in January, 1984, by Assembly Speaker Willie Brown (D-San Francisco).
Malcolm and Schmucker, a successful San Diego businessman, took over the luxurious Mediterranean-style Mission Hills house in early 1984 after foreclosing on a $450,000 loan they made to the owner, Chittenden Trust. The house carried an insurance policy of more than $1 million, according to Goldberg.
Hirsch had dealt with Malcolm and Schmucker as a representative of the owners, Chittenden Trust, and was "responsible for building the house," Schmucker said.