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Michael Schaefer, Still on the Run : As a Slumlord Contemplates Another Campaign, His Ex-Tenants Continue to Wait on a $1.83-Million Court Judgment

September 13, 1987|Scott Harris \f7

PERHAPS YOU'VE SEEN the signs: "Be Safer With Schaefer." Hundreds of the gold and green posters are plastered on utility poles and bus benches along the thoroughfares of Los Angeles. "I worked hard putting those up," perennial candidate Michael Schaefer says of his futile campaign last spring for the Los Angeles City Council. He is the man who would be senator, congressman, councilman--whatever--but remains best known for his extraordinary accomplishments as a slumlord ("Slumming With Mike Schaefer," Aug. 31, 1986).

Los Angeles residents might remember Schaefer as the millionaire who, in the spring of 1986, was blamed by a Superior Court jury for letting his mid-Wilshire apartment building become overrun with rats, cockroaches, filth and violence. So disgusted was the jury that it ordered Schaefer to pay the former tenants $1.83 million, believed to be the largest judgment ever in a landlord-tenant dispute.

Never one to hang his head in shame--in fact, he revels in publicity--Schaefer then set out to become a bi-coastal news maker. He started by moving to Baltimore, buying a small hotel and christening it

for the city's then-mayor, the popular William Donald Schaefer (no relation).

Before long, it became clear this was no ordinary business venture, but part of a quixotic scheme for Michael Schaefer, a former San Diego City Councilman, to return to politics. With Mayor Schaefer running a $1-million campaign for governor (with the slogan "Make Maryland America's Best"), Michael Schaefer mounted a $50,000 copycat campaign for the Republican nomination for U.S. Senate ("Give America Maryland's Best"). Early polls showed Mike Schaefer leading in name recognition; as it happened, he finished a distant second in a field of 11 with more than 10,000 votes. Not a bad showing for a carpetbagging slumlord.

Much has changed--and, of course, has remained the same--in the past year. Interest totaling $500 a day has pushed the size of the judgment against Schaefer to $2.2 million. His former tenants still haven't received a dime.

This is true in part because Schaefer is appealing the judgment and in part because he has declared Chapter 11 bankruptcy. The law firm of Gibson, Dunn & Crutcher, which represented the tenants on a pro bono basis, attempted to collect the award because Schaefer, contrary to law, failed to post a bond covering the judgment. A chief legal question is whether the $1-million trusts that Schaefer established in 1985 for each of his two teen-age sons are legitimate, or were fraudulent attempts to hide assets. Meanwhile, Gibson, Dunn also is attempting to recoup legal costs totaling more than $700,000 under a state law enacted to encourage volunteer legal work. If Schaefer loses on all fronts, he ultimately could owe more than $3 million.

Schaefer's efforts in the City Council race suggested that his political prospects remain dim. After establishing residency in Los Angeles (he also has homes in La Jolla and Chevy Chase, Md.), Schaefer announced his candidacy in the 10th District--only to be disqualified once it was discovered that many of the people who signed his petition were not registered voters. Schaefer then pressed a $20,000 write-in campaign--and received 21 votes. As political cost-to-benefit ratios go, this was not pretty.

And yet, on a recent day, Schaefer did not sound at all like a community pariah. He bantered and laughed, mostly at his own jokes. Someday his former tenants might get some money out of him, but probably not until after another court fight, which could take another year.

As for politics, hope springs eternal. He wondered aloud whether Supervisor Kenneth Hahn, who is recovering from a stroke, will seek reelection in June of 1988. "My signs," Schaefer mused, "are all over his district."

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