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It's the Year of Newport Beach Vice : Scandal: The city is abuzz over allegations of sexual misconduct in the Police Department, embezzlement by city officials and a sinking economy.

November 02, 1992|NANCY WRIDE and DAN WEIKEL | TIMES STAFF WRITERS

NEWPORT BEACH — Betty Seamans has seen her share of characters drift through her 24-hour coin-operated laundry, from the downtrodden to the rich who bring their Armani shirts in chauffeur-driven limos. She has found homeless people in dryers and naked women waiting for their clothes to dry.

It takes a lot to shock this queen of "Fluff and Fold," who offers such philosophic tidbits as, "Laundry's a great common denominator; everyone needs clean clothes whether they do it on a rock by the river, or I do it."

But hard times and a trio of scandals in upscale Newport Beach have grabbed even Seamans' attention.

"I think the old adage is true: Where there's smoke there's fire. . . . And that about covers my deep wisdom," said Seamans, scanning the morning newspapers.

From the marble corridors and koi-stocked ponds at Fashion Island to the beer bar funk of Blackie's by the Sea, Newport Beach has been racked this year by a welter of economic woes, white-collar crime and the worst controversy in the history of its Police Department.

Recessionary pressures have forced a $10-million cut in the city's $100-million budget, and defense contractors want $2.4 million in wrongly collected sales taxes returned. Former utilities director Robert Dixon financed an ostentatious lifestyle with almost $2 million stolen from the city.

Police Chief Arb Campbell and one of his top assistants stand accused of rape and sexual harassment. And last week, a high-ranking school district official with a fondness for mink and the debt of a leveraged buyout gone sour came under investigation after a fellow employee discovered a $57,000 check written on the district's health benefits fund to a shoe repair company the official owns.

For the city, already dubbed "\o7 Cote de\f7 Fraud" and the bunco capital of the nation, none of these recent scandals has bolstered a reputation for fiscal responsibility or its image as the one-time home of actor John Wayne.

"It bothers me personally," said Paul Burnett, co-owner of Surfside Sports near the Newport Beach Pier, "but my customers don't really care. They're more concerned about a city ordinance to ban skateboarding on the boardwalk."

From the grade school car pool drop-off to the venerable Balboa Bay Club, reaction to the dismal current events shifts as much as the wind in a spinnaker sail on the city's pleasure boat harbor, the nation's largest with 9,000 craft.

Home to beach-loving college students, middle-class families and harried careerists, the city still boasts an average per capita income of almost $60,000, with a median-priced home approaching $550,000. In his latest novel, author Joseph Wambaugh called Newport a place where an ordinary Mercedes is "considered a Chevy Nova."

Buck Johns, president of Inland Group Inc., is a developer based in Newport Beach and active in the Republican Party. He grants no special importance to the round of bad news pummeling the city.

"I think these things kind of go in cycles, you know. Bad things come in threes, but it seems like bad things are coming in fours for Newport. I attach no real significance to it," Johns said.

The city's latest cycle of problems began shortly after New Year's Day when Dixon, 48, a trusted employee and director of the utilities department, was arrested in connection with a 10-year-old scheme that drained the municipal treasury of more than $1.8 million.

Police said Dixon submitted phony purchase orders to the city's finance department. When a check was issued, he collected it, forged a signature and deposited the money into his own accounts.

Over the years, Dixon bought a new BMW, gold cuff links worth $120,000 and a $250,000 wardrobe that included 600 sweaters, 60 wool scarves and 20 umbrellas. He thoroughly indulged his taste for artistic black-and-white photographs from the 1920s and 1930s, amassing a collection of 220 pieces worth an estimated $400,000.

In June, Dixon pleaded guilty to two felony counts of embezzlement and was sentenced to four years in prison. He also was ordered to pay restitution to the city.

"Newport Beach has always had a tremendous image throughout the country. It is unfortunate that guys like him have smudged the name," said Richard Luehrs, president and chief executive officer of the Newport Harbor Area Chamber of Commerce.

Although Dixon caught civic leaders by surprise, the city's budget woes did not. Anticipating the impact of the recession on sales tax revenue and state funding, municipal leaders began planning a year ago to trim the city's $100-million annual budget.

They saved more than $10 million by reducing working hours, postponing capital improvements, laying off maintenance workers and refusing to fill 20 vacant positions.

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