on wall of shame
That name similarly appears atop a flood of lawsuits, bankruptcy records, and law enforcement probes. Gearhart, it seems, is many things to many people.
It was quite a ride while it lasted for the one-time prison guard. He traded life in uniform at the California Mens’ Colony in San Luis Obispo for a free-wheeling build-o-rama financed with other people’s money. He was hooked up with several local lenders who thought so much of him that he barely had to scribble his “X” on a page to depart with millions of dollars.
Much of that money came from investors who were placing their faith in one particular hard-money lender, Jay Miller of Atascadero, who ran an operation called Hurst Financial Corp. (HFC). Miller and Gearhart were very tight, and for a long time Hurst was Gearhart’s primary source of dough when he wanted to build something.
Ah, those were the days. Everybody was on a roll. Folks couldn’t walk past a bank without getting pitched on a no-money-down home loan. Builders were gobbling up every vacant lot in the county. Private investors, many of whom were just small fry betting on a continuing construction boom, were getting ten to 16 percent interest on their life savings. Municipal revenues soared. How could it ever get any better?
Well, it couldn’t. Along came the boom’s bust, the receding waters exposing the bare skeleton of Kelly Gearhart’s existence, and the not-so-cleverly-crafted Ponzi scheme that was feeding his building machine. Also outed were a host of bankers, community leaders all, who had jumped on the Gearhart float and jeopardized both their institution’s reputations and their stockholders’ portfolios.
But that’s all just history. The real story is yet to come. Gearhart’s grip on planning officials all over San Luis Obispo County helped create a web of corruption that only now will be coming to light. He may or may not have done all of the bad things he’s being accused of, but the simple truth is that Gearhart found a ripe and willing environment among tax-paid employees and elected officials for his particular kind of business practices.
Alas, these kinds of unseemly arrangements between builders and planners are as old as the advent of the first government regulation.
What is different in today’s atmosphere is the lack of journalistic oversight. There was a time not so long ago that Gearhart, his antics, and his co-conspirators would have been unmasked long before they had a chance to wreak havoc on an entire county.
When local print and TV reporters fail in their jobs, though, guys like Gearhart -- who really are just a dime a dozen -- not only can prosper, but become untouchable heros.
Had not CalCoastNews started scratching at Gearhart’s veneer of respectability back in 2007, he might still be doing his thing in Atascadero.
The Website’s revelations -- proven over time to be accurate, factual, document-rich -- were ignored by The Tribune (this the result of actual editorial policy voiced by Executive Editor Sandy Duerr, according to some of her slaves). That in turn allowed Miller to continue accepting investors’ money and passing it on to Gearhart -- for two full years after the developers’ star began to dim, thanks to CalCoastNews’ drumbeat of reporting.
My New Year’s wish is simple: May good local reporting prosper.
Posted: January 4, 2011
Kelly Gearhart, the one-time SLO County builder wunderkind who captured the hearts and purchased the souls of so many with his ill-gotten largesse, enmeshed government officials from here to Sacramento. How the most interesting man in Atascadero became its biggest grifter, picked the pockets of thousands, and had his way with local leaders, is the subject of KCCN.tv’s ongoing new series, “A County Corrupted.”
Part One of “A County Corrupted” features exclusive interviews with Marion Louise Warner, Kelly Gearhart’s common-law stepmother for more than 35 years; and Karen Velie, whose reporting for UncoveredSLO.com and CalCoastNews.com helped unmask the man who fooled and fleeced so many county residents.
Gearhart and others who helped perpetuate his schemes are now the subject of a multi-agency law enforcement investigation into Gearhart’s business practices and spending habits spanning the past decade.
Velie’s work since 2007 has revealed numerous questionable development deals engineered by Gearhart and others, including former San Luis Obispo County Planning Commissioner Bruce White. White resigned from the planning panel in December after Velie outlined details of a profitable misrepresentation of one of his and Gearhart’s projects.
Gearhart’s influence among key players in county and city planning circles was subtle; he was widely viewed as a man more benevolent than powerful. But his altruism was self-serving, according to Warner. Genuine generosity was not a Gearhart quality, Warner notes, calling Gearhart and his father “throwback men.”
They also were men, according to Warner, who were willing to commit arson for money, and who were responsible for injuries to four firefighters in a 1986 Ohio blaze that funded Kelly Gearhart’s entry into big-league land developing.
Posted: January 4, 2011
Related link: A County Corrupted Part Two