Secret Partnership, Selection-Rigging Charges Embroil CA Golf-Course Hotel Project

MONTEREY, CA— A Texas-based golf course-management company negotiating on behalf of the City of Seaside to select a developer for a new hotel at the Bayonet and Blackhorse golf courses reportedly entered into a secret business partnership with one of the developer candidates and rigged the selection process to ensure its secret partner would win the nod for the project. A civil-racketeering lawsuit— filed last week in the Superior Court for the State of California here in Monterey— is said to charge defendants Donald Pitt, Donald Diamond, and Richard Fitzgerald of Arizona, and defendants Andrew Schatte and Richard Bischoff of Texas (as well as companies owned or controlled by those individuals) with conspiracy to violate and violation of the Racketeer Influenced Corrupt Organizations Act (RICO), fraud, breach of contract, and other violations of California and Federal law. The lawsuit was purportedly filed by Los Angeles developer Danny Bakewell and his company, Seaside Hotel and Convention Resort Developers LLC. The complaint is described as an amended version of an earlier breach-of-contract lawsuit brought by Bakewell last year. According to remarks credited to Taras Kick, one of Bakewell’s attorneys: “The revised complaint with expanded charges is based on massive evidence of a conspiracy and other violations of the law that were revealed during discovery proceedings on the original complaint. Documents created by the defendants themselves described in detail their conspiracy to rig the developer-selection process, and defraud… Bakewell and the citizens of Seaside.” The lawsuit maintained that— acting as the City of Seaside’s exclusive agent, and feigning independence— Schatte’s firm advertised nationally seeking potential developers in a Request for Qualifications (RFQ) process. It was further contended the defendants acknowledged in correspondence between themselves the bidding process would have to appear “bullet proof,” but it was all a sham. It was noted 11 companies ultimately responded to the RFQ, including the Defendants group, at that time proposing a Marriott hotel, and the plaintiffs’ group, correspondingly proposing a Hilton hotel.