Shoreline foes have day in court Shoreline foes have day in court (December 23, 2005)

City, Clear Channel trade charges in pretrial hearing

By Jon Wiener

Attorneys for Bill Graham Presents, a subsidiary of media giant Clear Channel, accused the city of using the media to "weave a tale of fraud and conspiracy" at a pretrial hearing last week.

The two sides were in court to debate the validity of charges of racketeering and theft of public funds that the city has leveled at the company. Clear Channel had filed a motion with Superior Court Judge William Elfving asking for summary judgment against those charges, which carry a potential penalty of treble damages.

James Wagstaffe, an attorney for BGP, called the city's charges "silly."

"It shows you in my mind their desperation," Wagstaffe told the Voice. "They're trying to convert a lease dispute case into a criminal conspiracy case. They're trying to add this patina of corruption."

The city continues to claim the company has been paying less rent than it owes under its lease at Shoreline Amphitheatre. A city-sponsored audit released in August detailed $20 million in unreported revenue at the amphitheatre over a six-year period. Auditors said a final number could be much higher.

Clear Channel executives have called the audit misleading, but declined to comment further. The company posted a $3.6 million bond with the court when the city threatened eviction and Elfving refused to intervene.

Last week, the company's argument became clearer. The lease specifies the city is entitled to a share, 6.5 percent, of "gross receipts" earned at the amphitheatre. But Wagstaffe said that much of the revenue the auditors identified doesn't qualify as gross receipts at all.

The city claims it is entitled to a cut of the parking fee BGP charges all concertgoers, in addition to several other transactions that the company has kept off the books. These include non-monetary sponsorships and concerts put on by Clear Channel-owned radio stations that paid to rent the amphitheater but kept the revenues to themselves.

Wagstaffe added that the partnership that runs the amphitheatre does not fit the definition of an "enterprise" under the Racketeer Influenced and Corrupt Organizations Act (RICO).

"Merely because two parties are conspiring together, that doesn't make it a RICO case," said Wagstaffe.

Attorneys for the city disagreed at the hearing, but did not return phone calls prior to press time.

E-mail Jon Wiener at jwiener@mv-voice.com

E-mail a friend a link to this story.