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Land Plan Opens Window on Hearst Rift

Business: Some family members seek more say in corporation matters, such as development at San Simeon. But breaking their silence brings threat of disinheritance.

January 20, 1998|FRANK CLIFFORD and LOUIS SAHAGUN | TIMES STAFF WRITERS

Subject to a will that threatens rebellious heirs with disinheritance, descendants of William Randolph Hearst are just now daring to break a long silence over the management of their legendary holdings.

The impetus for speaking out is the controversy over a proposed commercial development on the 77,000-acre Hearst ranch at San Simeon. The rare public disagreements have brought into view an underlying division between at least some members of the famous family and its hired managers.

Last week, the California Coastal Commission rejected a plan by the Hearst Corp. to build a vast oceanfront resort along a spectacular, largely empty stretch of the state's central coast.

In the days leading up to the vote and since then, members of a family rarely heard from on such matters have criticized the development proposal and the way it was promoted by Hearst Corp. lawyers and lobbyists.

For at least a few of Hearst's 35 adult heirs, the proposed development exemplifies a broader power struggle over the management of the family's estimated $5 billion in assets.

"The San Simeon issue is a reflection of the fact that the corporation is essentially controlled by non-Hearst managers," said William R. Hearst II, the leading dissident within the family.

Thick Veil of Secrecy

With its origins in 19th-century gold, silver and copper mines, the Hearst fortune today is largely invested in one of the nation's largest media companies--the Hearst Corp.

But while several family members serve on the corporation's board, the terms of William Randolph Hearst's will vested control largely in the hands of non-family managers.

"My grandfather structured things the way he did because he didn't place the same faith in his sons that he did in trusted lieutenants," Hearst said.

That control is largely exercised behind a thick veil of secrecy.

Now, skeptical family members are trying to pierce that veil as they question whether the Hearst Corp. is being managed in the best interest of the family.

Hearst described annual business meetings where, he said, family members were prohibited from bringing in their own lawyers or accountants to help them understand the proceedings. He said he was barred from bringing a tape recorder.

But the corporation and its managers clearly have the support of some family members.

"William is good intentioned but poorly informed," said his cousin, Austin Hearst, who lives in New Jersey and serves on the board of the Hearst Corp. "He [William II] is the kind of individual who is disgruntled and who has persuaded himself that everything the corporation is trying to do is some sort of conspiracy.

"I'm not going to say he doesn't have both oars in the water. He just doesn't understand all the complexities involved."

The secrecy that has traditionally surrounded the family's affairs has only deepened since the infamous kidnapping of Patricia Hearst in 1975. For more than 20 years, court documents pertaining to the family and any internal wrangling have been sealed to protect the names and addresses of heirs.

Partially as a result, the degree of disaffection within the family remains unclear, with only one other member, William's sister Deborah Hearst Gay, openly taking his side.

"I feel like we're being steamrolled," Gay said in a recent interview with The Times. "I trust my brother. I support him."

What is clear is that the San Simeon issue has opened a rare window into the family's internal disagreements.

San Simeon has been central to the family's public image--and its self-image--ever since William Randolph Hearst built the famous castle that has come to symbolize the wealth and power of the Hearst dynasty.

Their attachment to the place is rooted in memories of childhood experiences--riding horseback to picnics in remote canyons, looking for lizards along stream banks, swimming in one of the castle pools after the tourists had left or looking at home movies of Charlie Chaplin and other famous house guests.

Even today, although the castle now belongs to the state of California, family members are free to use the surrounding ranch and many of its buildings.

Interviewed over the weekend, several family members said they did not want to see commercial development on the property.

"That land is more a part of the family than a pawn in the corporation's daily business, and I would really like to see it stay the way it is," said Misty Hearst, who lives in California.

"Nobody wants to see that coastline change," said Erin Hearst Knudsen, a Minnesota resident.

Phoebe Hearst, who managed the ranch with her husband for many years, said the corporation could realize a profit without developing the land if it sold the development rights to the state or to a conservation organization.

"I have been honking that horn for years because it's a beautiful way of keeping the land natural," she said.

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