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Issa's Rags-to-Riches Tale Has Some Ugly Chapters

Politics: Senate candidate left a trail of spurned business associates. He dismisses criticism as sour grapes.

May 23, 1998|ERIC LICHTBLAU | TIMES STAFF WRITER

To hear Darrell Issa and his supporters tell it, the San Diego County businessman is a modern-day Horatio Alger who built his company "from scratch" and clawed his way to a fortune that has given him instant credibility as a U.S. Senate candidate in next month's primary.

But a closer look at the 44-year-old Issa's financial beginnings reveals a more complex tale, rooted as much in discord as in dogged determination.

His admirers praise his business savvy, his innovation and his aggressive marketing of cutting-edge technology in the car security industry.

However, Issa also has left a trail of spurned associates from New York to California who accuse him of distorting his record and of trampling them on his way to the top.

The car security company that Issa now says he "started" in his hometown of Cleveland 16 years ago actually came under his control after a bruising battle with the former owners, records and interviews show. The clash and its aftermath featured accusations of underhanded tactics and intimidation, a suspected arson, even a glimpse of an Issa arrest in his youth on charges that were later dismissed.

"It's an ugly past chapter," Issa acknowledged in a recent interview. "If I had not succeeded in business and they had, I could be saying this in reverse."

The pristine headquarters of his $70-million-a-year operation north of San Diego seem far removed from his working-class Ohio roots, where he and his competitors were scrambling in the 1980s to gain a foothold in the growing car security business. It was a rough-and-tumble time for Issa--and tensions ran particularly high after a suspected arson fire ripped through his manufacturing plant in 1982.

No one was ever charged in the fire, but authorities were troubled by a dramatic escalation in the facility's fire insurance just weeks earlier. Even before the blaze was put out, investigators began peppering Issa and his partner with "crazy questions" regarding their whereabouts before the fire, Issa recalled.

Authorities later checked their criminal records and their financial histories. The rap sheets turned up an old run-in with the law that now seems ironic for a staunch law-and-order candidate who struck it rich selling car alarms: A decade earlier, Issa had been arrested at the age of 18 on charges that he and his brother had stolen a car.

A grand jury indicted the Issa brothers on charges of felony theft of a red Maserati from a Cleveland dealership in 1972 after a witness reported seeing them pushing the sports car down the street just before midnight, records and interviews show. But the charges were dismissed--months before the older brother, Bill, was convicted of stealing another car amid a string of offenses.

The Issas both say that they were arrested only because they were near the car--and because Bill had a bad reputation with police. "If I hadn't been there, they wouldn't have bothered my brother," Bill Issa said, adding that he recalls that the charges were dismissed because a witness changed part of his story.

"The fact is," Darrell Issa said, "I was exonerated of all wrongdoing. My brother went on to have a long and sordid career. I told the campaign a long time ago, 'You want to just publish my brother's record on the Internet and get it over with?' They said, 'No, don't worry about [your] family.'

". . . I am not my brother, I am not my brother's keeper."

Takeover of Company

Issa smiled and shook his head when the name of one of his former business associates in Cleveland was first raised in a recent interview.

"Ah, Joey Adkins," he said. "I remember him."

Issa has spent about $6 million of his own money to air commercials in which he tells, among other things, of "building a world-class business from scratch" and using his $7,000 life savings to start the company.

But Adkins, 42, who is now repairing video equipment at his rundown shop outside Cleveland, was there at the beginning, too. The company that Issa says he founded had belonged to Adkins until Issa seized control in 1982.

Issa says he simply did what any good businessman would have done under the circumstances.

Adkins counters: "Darrell stole that company out from under me. He screwed us."

Adkins started work in the late 1970s on anti-theft devices for automobiles, developing a product called Steal Stopper that killed the ignition switch unless a digital code was entered. His company, A.C. Custom Electronics, secured a contract with Ford Motor Co. and, by 1981, was reporting nearly $1 million in annual revenues, tax returns show.

Meanwhile, Issa was breaking into business himself.

In 1980, after leaving active military duty, he bought into Quantum Enterprises, which had previously manufactured CB radio parts. When the CB market began dying, the company resorted to developing gadgets, such as a potato peeler, but it suffered what Issa described as "incredible losses."

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