Larry Pegram: New Financial Revelations

Eighteen months after leading the local battle against gay marriage—and shortly after an aborted plan to move to Tracy and run for U.S. Congress—Larry Pegram promised that his campaign for San Jose City Council would be about fixing the city’s pressing money troubles, not social issues. Since that time, Pegram has emphasized his commitment to balanced budgets and cited his own credentials as a professional financial planner.

But Pegram’s own financial history does not demonstrate the kind of business record that inspires trust in managing the people’s money.

His recently-publicized 1996 bankruptcy, during which he either purposely or inadvertently filed under the name “Lawrence Pellman,” appears to be just one chapter in a checkered career.

Three years before filing for bankruptcy, Pegram created a partnership with a name incorporating his initials, LRP Realty. Using contacts with the San Jose Rotary Club, he stitched together a group of associates to buy two apartment complexes in Concord, according to Dan McDonald, a retired insurance man and longtime Rotarian.

“The idea was to clean them up, fix them up, get the rents up and then resell them,” McDonald recalls.
Within 18 months, both apartments faced foreclosure.

“Larry ran the properties into the ground,” McDonald says. “It was really mismanaged. And there was a lot of money unaccounted for.”

McDonald, who has invested in local businesses, including Metro, says he had to take over one of the apartments in order to rescue the deal. He says he provided funds to Pegram, mistakenly believing that the other partners, many of whom were longtime friends, would recover some of their investment out of the transaction.

“I paid off the loans, and subsequently gave Larry a check for something like $25,000,” McDonald recalls. “He was supposed to take that money and distribute it to the partners. And he never did that.”

Pegram confirms most of McDonald’s account, pointing out that the deal happened almost 20 years ago and he therefore does not recall the details.
“If he gave me a check, he didn’t give it to me personally,” Pegram says, explaining that while he handled the transaction, the check “was made out to the partners and not to me.”

“The money would have been used to satisfy the obligations of the partnership.”

He says he lost at least $25,000 on the deal himself, though he took some management fees. McDonald says none of the partners ever took legal action against Pegram because the amounts weren’t big enough to justify litigation expenses, and they knew he was broke.

“I guess we all figured, why beat up on the guy?”

McDonald, a notoriously pleasant and soft-spoken man who by all accounts never has a bad word to say about anyone, is blunt in his assessment of Pegram.

“I think he’s an incompetent shyster,” McDonald says. “Larry Pegram has the unique ability to look you in the eye and lie.”

In response, Pegram says he considers McDonald a friend: “I know of no instance when I was untruthful with Mr. McDonald.”

Following LRP, Pegram became a financial planner for World Financial Group, a multi-level marketing company which, during the time Pegram worked there, was repeatedly charged with fraud and misrepresentation, and was the subject of several class action lawsuits and disciplinary action from the National Association Of Securities Dealers. (The company has since been sold to a new owner and reportedly cleaned up its act.)

Moving Target

Pegram, 65, has hop-scotched though various careers in the 46 years he has been in San Jose. Throughout that time, he has found himself in various forms of trouble, and not just because of his radical political views.

After serving for seven years on the San Jose police force, Pegram was elected to the City Council in 1974. There, he became known as one of the “Fearsome Foursome” along with David Runyon, Joe Colla and Al Garza. This developer-friendly voting bloc forced a controlled-growth city manager from office before being brought up on bribery charges.

Pegram was never charged with any wrongdoing, but Garza was indicted and convicted of charges that involved an envelope of cash. Runyon was arrested and forced to quit the council for drunken indiscretions. Colla and Pegram faded from public view.

Ex-mayor Tom McEnery, a member of the planning commission who had clashed with the Fearsome Foursome over its sprawl-friendly agenda, was appointed to take over Runyon’s seat. McEnery says Pegram and his cohorts had “a kind of pay-to-play mentality” with regards to developers.

“They wanted San Jose to have very relaxed development policies, and that was exactly the wrong direction the city needed to go in,” McEnery says. “They weren’t concerned with building San Jose’s tax base. They were more concerned with accommodating developers and sprawl.”

When asked for his opinion about why the Fearsome Four were so chummy with development interests, McEnery invokes the old adage: “Follow the money,” he says.

McEnery, who famously reversed the city’s economic development policies during his two terms as mayor, says he understands why his friend, Mayor Chuck Reed, endorsed Pegram despite his controversial history. Reed sees himself as locked in a battle with public employee unions, and Pegram has been their harshest critic—although his opponent, Donald Rocha, has recently demonstrated an independent streak, breaking with labor to endorse union-opposed Measures V and W.

“I think Chuck looks at Pegram the way FDR and Churchill looked at Stalin,” McEnery says, quoting Roosevelt: “’He may be a son of a bitch, but he’s our son of a bitch.’” 

 

15 Comments

  1. > Eighteen months after leading the local battle against gay marriage— . . . .

    > Throughout that time, he has found himself in various forms of trouble, and not just because of his radical political views.

    > Pegram was never charged with any wrongdoing, . . . .

    > Reed sees himself as locked in a battle with public employee unions, and Pegram has been their harshest critic . . . .

    Connecting the dots . . . .

    Pegram campaigns against gay marriage, which makes him a “radical”, and even though he was charged with no wrongdoing, he has been the harshest critic of the public employee unions.

    Got it.

  2. Eric Johnson did a good job of bringing some new information to light about someone who wants a job spending our money. Pegram’s history of ripping off his partners, failed business ventures, monkeying with MLMs and hate-filled fringe politics should give voters pause. Otherwise, San Jose isn’t the city I think it is.

    • > Eric Johnson did a good job of bringing some new information to light about someone who wants a job spending our money.

      So, Kenwood:

      What’s your favorite special interest? Gays or unions?

      —Burb

  3. More accurately in regards to Pegram: “He may be a dishonest hypocrite, but he is our dishonest hypocrite”.

  4. Larry ( I can’t manage my money, so I want to manage taxpayers money ) Pegram ( Aka Lawrence Pellman,) is opposed by Labor and Tom McEnery because he wants to give taxpayers money to his supporters not Labor’s and McEnery

    Larry ” will show the way to San Jose’s future Bankruptcy as his decisions did for his own bankruptcy and losing other people’s money

    ” More of Same BAD Council Policies and Votes ” giving taxpayers money to non government organizations and political insiders while

    1)neglecting and underfunding city services and infrastructure until it gets so bad that Voters are willing to vote in new taxes

    2) Council raises every taxes with different names – fees, service charges, assessments and government imposed charges ( Legally Not Taxes) that taxpayers are REQUIRED to pay

    3) Council Votes Business Unfriendly Policies and HIGHER Costs to drive businesses, jobs and business taxes to other cities and states losing tax revenues that should have been in San Jose to pay for city services and staff

  5. Great job Eric. It’s about time someone put Pegram out in the “sunshine.” The guy is a used car salesman selling lemons and won’t be getting my vote.

    I served on the Mayor’s Public Safety Transition Committee with Pegram. He is a bully who has zero interest in working collaboratively with ANY ONE. He is rude, and pushy. He didn’t offer one thing to our efforts, he argued with everyone, and he only attended 3 of our approximately 8 meetings. He also seems to hold some kind of grudge against the Police. I’m not sure what that’s about but it was very evident in our committee meetings. May be you can look into that Eric.

    In August 2010, I held the 2nd Annual Candle Lit Vigil for Victims of Violent Crime. Pegram showed up in his loud Hawaiian shirt, his cell phone stuck to his ear the entire time, and stayed long enough to hear his name announced and then left. He wasn’t there to support any one but himself and his over inflated ego.

    I am voting for and supporting Don Rocha 100% for Council. I met with him this summer for over two hours to discuss my concerns. While I think he’s pretty shy, which I mistakenly saw as arrogance, and middle of the road when he’s asked a question, he seems sincere about running for Council. I can tell you that we don’t agree on everything but he is far more balanced and educated on the issues than Pegram. I hope after this article you consider giving him your vote.

    Good luck Don. You have my support!

  6. Hmm…when Our Leader Reed made Larry P. sign a letter promising not to espouse hiss wacky personal social agenda if he were to be elected to serve on the San Jose City Council, I wonder…which name Larry signed?  He seems to have some choices in the matter. (Odd, for a man so vehemently opposed to choice for others.)
    No matter, it was a pro-forma letter anyway; Chuck just wants Larry’s anti-union vote (because even Reed can’t think Pegram is a voice for fiscal conservation—with *his* record??)

  7. I can’t claim to be exactly thrilled about the recent spate of Pegram-related shenanigans.  I still intend to vote for him, however, because if Pegram gets, say, 46 percent of the vote, I think that will have a salutary effect on the conduct of Don Rocha, compared to if Pegram were to receives 32 percent of the vote.

    There was never much chance Pegram was going to win this thing, but the higher percentage of the vote he draws, the more Don Rocha will be careful to keep the relatively conservative (by San Jose standards, anyway) concerns of District 9 voters in mind.  I really doubt he’d have endorsed Propositions V & W if he hadn’t at least been worried that Pegram might win.

    • I disagree. Voting for an unethical candidate of questionable integrity says as much about the voter as it does about the candidate.
      How can you overlook his long history of, shall we say, character flaws and hope this guy gets on the Council?
      Makes no sense to me and is a dangerous way to vote. Either the candidate is qualified or not and I would say in Pegram’s case he is not.
      I would not want him anywhere near my money given his track record as a scheming financial planner.
      I do agree with you that Pegram has little chance of winning but I would never vote for him on that basis.

      • We have a corrupt political system in this nation.  I pretty much assume that any otherwise obscure 42-year old with such an inside-track career as Mr. Rocha, is probably not a sterling example of civic ethical virtues either, even if he hasn’t been caught yet.  I don’t mean that as an accusation (since I have no specific knowledge of any wrongdoing on his part), and freely admit that’s my own sheer speculation (yet I think all people are guided by their own speculative instincts in such matters, at least to an extent), but I do strongly suspect its a choice between two candidates who aren’t exactly cut from Jimmy Stewart cloth, so to speak.

        I voted for another candidate (Robert Cortese) in June, but these are the two my fellow voters determined I would have to pick between in November.  You apparently believe that if one candidate gets caught, and the other hasn’t, then the other is clean.  Nice thought, but its a little naive.  Rocha is part of the establishment…and the establishment is corrupt.  Hopefully, he’s an exception.  My inclination is not to assume so.

  8. “Rocha is part of the establishment…and the establishment is corrupt.  Hopefully, he’s an exception.  My inclination is not to assume so.”

    Kevin, you are far too dam intelligent a man to make such a prejudice and ignorant statement about a man you don’t even know.

    I agree with Just Sayin, “Voting for an unethical candidate of questionable integrity says as much about the voter as it does about the candidate.
    How can you overlook his long history of, shall we say, character flaws and hope this guy gets on the Council? Makes no sense to me and is a dangerous way to vote.”

    And by the way, you can’t just steal people’s line signs and claim you did it on behalf of the City. They have a procedure you have to go through first.

    • Its true that I don’t know Don Rocha, but I doubt I can truly rectify that fact before the election.  My disdain for the political establishment isn’t just some rationale I’m pulling out in order to justify my support for Pegram; candidates I vote for almost NEVER win at any level, precisely because of my intense disdain for the local, state, and national political establishments (who’s favored candidates very seldom lose).

      If Don Rocha does a good job (and he probably will win), then I may well vote to re-elect him in 2014.  But as an anointed member of the dominant political establishment in this county, it was always nearly certain I was going to vote for whichever of the other five primary candidates made it to the run-off against him (assuming there even was a run-off, which there probably wouldn’t have been, had Pegram not entered the race).

      • Give it a shot Kevin,

        From his website:

        “I would be honored to have your support. Please feel free to contact me by email to discuss or share the issues that matter most to you at – [email protected] or you can call me directly at (408) 355-4196, Thank you.

        Sincerely,
        Donald Rocha”