Moriarty Pleads Guilty, Will Testify on Bribery : Leading Figure in Poker Club Corruption Case Expected to Implicate a Number of Officials

Times Staff Writer

Orange County businessman W. Patrick Moriarty pleaded guilty Tuesday to a variety of corruption charges and agreed to be a government witness against politicians who allegedly received bribes from him in the form of money, prostitutes, vehicles, vacation housing and the hiring of relatives.

In the plea agreement, the 53-year-old head of an Anaheim company that manufactures and distributes Red Devil fireworks also consented to forfeiture of $34 million in proceeds from his sale of stock in a City of Commerce poker casino.

Three of the seven mail fraud counts to which Moriarty pleaded guilty stem from giving secret shares in the California Commerce Club to four city officials in return fro their granting a license for the gambling club.

The other guilty pleas came on four new mail fraud charges filed Tuesday by the U.S. attorney's office, charging him with making illegal contributions to politicians and with paying kickbacks to a bank official.

Moriarty faces a possible maximum sentence of 35 years and fines of $7,000 on the seven counts, but Chief Assistant U.S. Atty. Richard Drooyan said the government will inform U.S. District Judge William J. Rea of "the extent of Mr. Moriarty's cooperation" in the continuing corruption investigation by the FBI, the Internal Revenue Service, the U.S. attorney's office and the Orange County district attorney.

Drooyan asked that Moriarty's sentencing be delayed for 90 days "to enable him to take part in that investigation." Rea then set June 10 as the date for a sentence to be imposed, reiterating to Moriarty that no deal had been made on the punishment he would receive.

The surprise pleas came just after the midday break on the fifth day of testimony in the Los Angeles federal court trial of Moriarty and Las Vegas gambling figure Frank J. Sansone in connection with the card club scheme. The trial continued with Sansone as the lone defendant after the proceedings were interrupted for 40 minutes while Rea presided over the plea agreement.

Moriarty walked quietly from the courtroom, surrounded by his large family. He declined to comment on his future role in the investigation, leaving his attorney, Jan Lawrence Handzlik, to answer questions.

Handzlik said Moriarty felt "greatly relieved" to be out from under the racketeering charge in the Commerce card club trial. The attorney said he had hoped to n3egotiate the agreement with prosecutors before the start of the trial but that "the wide-ranging and complex scope of the topics to be covered ultimately made that impossible."

Spotlight on Officials It became obvious after Tuesday's proceedings that the focus of what law enforcement officials say could be the most extensive political corruption case in California history will shift from the City of Commerce and put the spotlight on elected officials from Sacramento to Los Angeles City Hall.

At least 17 current and former public officials have had business dealings with Moriarty, The Times has reported in stories detailing his business and political activities.

The business dealings include investments in a Baldwin Hills condominium project at a time when Moriarty was seeking favorable action on a fireworks bill pending before the Legislature in Sacramento.

In addition, associates have said that Moriarty provided several lawmakers and bankers with financial favors, prostitutes and the use of condominiums in Hawaii and other recreational areas.

One of the new counts to which Moriarty pleaded guilty Tuesday charged him with making numerous political contributions in the names of others with the intent of concealing his identity as the actual contributor. This scheme, first outlined in a Times story in January, was carried out in both state and local elections "beginning at a date unknown and continuing at least until June 1, 1983," according to the charge to which he pleaded guilty. No specific amounts nor the names of recipients were listed.

Moriarty also pleaded guilty to making illegal payments to public officials in an effort to influence their actions.

The government document lists some particulars on this count, saying that Moriarty "provided public officials with free vacation housing (and) with investments promising substantial rates of return, plus hiring or retaining public officials or their relatives."

This count also accuses Moriarty with supplying an automobile to an elected official and providing furniture to another official.

Neither the prosecutors nor Handzlik, Moriarty' attorney, were willing to name the politicians who are the targets of the ongoing investigation. However, the wording of the new charges to which Moriarty pleaded guilty provides an indication of the identity of some of those under scrutiny.

Times stories have linked Moriarty with former Assemblyman Bruce Young (D-Norwalk) who was instrumental in helping Moriarty win legislative approval of a bill prohibiting local governments from banning the sale of fireworks. The bill ultimately was vetoed by former Gov. Edmund G. Brown Jr.

During the time the bill was before the Legislature in 1981 and 1982, The Times reported that various sources confirmed that Moriarty had provided Young with the use of a car and supplied furniture for Young's condominium, and that Richard Raymond Keith, a former associate of Moriarty, paid Young's public relations company, Young Thinking, $6,500.

Investors in Moriarty's Baldwin Hills condominium project included Young and Assembly Democratic Leader Mike Roos. In addition, Los Angeles City Councilman David Cunningham's wife, Sylvia, was on the payroll of the condominium project for 18 months beginning in 1982 and earned about $30,000 in salary as a saleswoman, even though only one unit in the 64-unit complex was sold.

Young, Roos and Cunningham also were among the public officials who were provided with prostitutes by Moriarty, according to former Moriarty associates and individuals who said they were present when prostitutes were provided.

In all, The Times has identified more than $590,000 contributed by Moriarty and his associates to 124 California officeholders and candidates, mostly since 1980. Of that total, at least $260,000 was "laundered" to 60 lawmakers and candidates, according to former Moriarty associates and public records. Laundering is a system for hiding the true source of political contributions, a practice that is illegal in California.

All of the recipients of the laundered money denied knowing that Moriarty was the true source of the contributions.

The new charges against Moriarty named former California Canadian Bank official Floyd Walden as the recipient of cash kickbacks from Moriarty on loan transactions.

Former Moriarty associate John E. (Pete) Murphy previously told The Times that he hand-carried about $750,000 in cash from Moriarty in Southern California to Walden in the San Francisco Bay Area from about 1980 to 1983.

In addition, Moriarty was publicly listed as the owner of a $350,000 Menlo Park home in which Walden lived, although Moriarty denied providing any of the money for the purchase.

Under the plea agreement, Moriarty is expected to provide investigators with specific details of his business, personal and political dealings with numerous political figures.

To date, law enforcement officials have had to rely mainly on the memories, bank accounts and documentation of men such as Murphy, Keith, Anthony Martello and Albert Hole, all former Moriarty associates.

But Moriarty will be called upon to provide investigators with details of private meetings and information from personal files that were unavailable to his former associates.

Tells of Getting Cash

In the morning session of the card club trial, before Moriarty's surprise change of plea, former City of Commerce mayor Robert Eula testified about going to Moriarty's Anaheim office to pick up cash-laden envelopes during a seven-month period before the casino opened.

Eula said that these payments totaled $6,000 and that the money was split between himself, fellow councilman Arthur Loya and former city director of economic development Phil C. Jacks.

When Richard Walton, Sansone's attorney, began his cross-examination of Eula, he questioned the former mayor about whether he made a deal with the government to "save his neck." Eula, who was mayor in 1975 and 1977 and on the City Council for 12 years, bristled and said, "I am a crook, I am guilty of what I've done, I'm a bad guy and I'm here to testify on behalf of that."

With Moriarty's guilty plea Tuesday, only Sansone is still maintaining his innocence. Eula and fellow councilmen Loya and Ricardo Vasquez, along with Jacks, all have pleaded guilty to bribery-related counts in connection with the card club scheme.

On the eve of City of Commerce card club trial, one of Moriarty's former close associates, Keith, pleaded guilty to evading nearly half a million dollars in income tax payments on commissions and payments given to him by Moriarty. He, too, is expected to be a key witness in the continuing investigation.

Contributing to this story were Times staff writers Tracy Wood and George Frank.

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