In a hall in the county courthouse here last week, the sturdy, white-haired old man gazed at a framed picture of rows of lawyers in the San Diego Bar Association, class of 1932.
"I remember all but three of four of the guys," the old man said. "I knew all of these young kids," he added with a chuckle.
Unnoticed by the scores of attorneys and others starting to fill the courthouse corridor, the old man then ambled down the court room 12, where he took his seat at the defendants' table.
The old man's trial begins today with the opening argument fromstate prosecutors. He is charged with state income tax evasion, grand theft and forgery.
Although few pay any mind to the 79-year-old man as he comes and goes at the courthouse these days, his claim to have known most of the lawyers in town in no idle boast.
The man is C. Arnolt Smith, and he knew nearly everyone in San Diego who counted. He was a millionaire banker, Republican Party activist, builder of skysrapers, civic leader, major league baseball team owner, socialite, master of a domain that involved 50 or so companies, and wheeler-dealer in the world of high finance. Smith's power and holdings were immense, the results of his philanthropy everywhere.
When a local club here named Smith "Mr. San Diego" of 1961, a local financial writer wasn't satisfied and anointed Smith "Mr. San Diego of the Century."
Smith counted among his friends former California governor Earl Warren and Richard M. Nixon, to whom Smith was a friend and ally from the time the former president was a southern California congressman.
So Smith's trial is not just another prosecution involving white-collar crime. It is one of the many legal actions that have followed the financial collapse of his once-mighty empire.
Smith's kingdom was built with his U.S. National Bank. Though it was thought to be the mightiest financial structure in San Diego history, it turned out to be built on a foundation weaker than the sand Smith can see from his La Jolla home.
Investigations by the Securities and Exchange Commission and federal bank examiners determined that Smith had made huge unsecured loans with inadequate collateral to many of Smith's companies, among them West-California Corp,, the huge holding company he controlled.
The alleged looting of his own bank formed a complex maze, but, according to the investigation, it involved Smith improperly lending himself money, borrowing money for companies never received by those companies, using the same property as colateral for different loans, and many other schemes.
A lost of possible criminal charges was referred to the U.S. attorney's office, but before Smith could be indicted another blow struck.
Bank examiners determined that at least $45 million, and possibly another $98 million that U.S. National Bank had loaned to Smith-controlled companies, was uncollectable. The bank was doomed to failure.
U.S. banking officials sought the least painful financial course, and the bank was merged with Crocker Bank. Nevertheless, with its $932 million worth of assets, the folding of USNB in 1973 was the largest bank failure in history at that time.
By June 1975 Smith had entered a plea of no contest to four federal felony counts of bank fraud. The no contest pleas were accepted by U.S. District Court Judge Robert Schnacke because Smith faced a myriad of civil suits totaling hundreds of millions of dollars.
At his sentencing, Smith, a proud man, sobbed as he pleaded with Schnacke to spare him prison. Smith emphasized his poor health and advanced age, and Smith's lawyer reminded the judge of the "many good things" Smith had done for the community.
The judge surprised many by agreeing. Smith and his partner, Philip A. Toft, were fined and given probation. But the same year Smith was indicted on 64 felony counts involving his businesses by a state grand jury.
Those 64 charges have been whitled down to eight, and the stage is set for his trial to start today on these charges. Superior Court Judge Robert W. Conyers took six weeks to impanel a jury that is expected to hear evidence for the next six months on the complex financial charges which stem from Smith's 1973 sale of the San Diego Padres baseball team to McDonald's hamburger magnate Ray Kroc.
For prosecutors Bob Robinson and Steven B. Davis the trial is the home stretch - they have been working on Smith's Case for three years. For Smith, the trial gives him a chance to back up his prediction that he will be found innocent.
On the day the last juror was picked, Smith was found walking alone to his car across the street from the courthouse. "We're going to win, sure as hell are!" he said with a laugh.