Supplied Politicians With Prostitutes, Moriarty Testifies

Orange County businessman W. Patrick Moriarty, the central figure in a public corruption investigation, Wednesday admitted spending “several thousand dollars” for prostitutes to entertain state political figures.

Moriarty, testifying in Los Angeles federal court, said he could not remember the names of any of the politicians who were supplied with prostitutes, but conceded that they “possibly” included state senators and assemblymen.

The issue was raised by Byron McMillan, defense lawyer for a former Bank of Irvine official who is on trial on charges of helping Moriarty in an unrelated money-laundering scheme.

Attacking Moriarty’s credibility as a government witness against his client, Nelson Hallidy, 61, McMillan confronted Moriarty with the subject of political corruption shortly after beginning a tough cross-examination.

“Were you supplying prostitutes to politicians?” McMillan asked.

“What does supplying mean?” Moriarty responded.

“What does it mean to you?” McMillan shot back.

“It means physically delivering them,” the Orange County businessman replied, finally conceding that he had paid for prostitutes in the past but could not recall the names of any individuals who were entertained by the prostitutes.

“You can’t remember any of the names of politicians you had somebody give money to prostitutes for?” McMillan asked.

“I can’t recall,” Moriarty said.

“Assemblymen?” the lawyer demanded.

“Possibly,” Moriarty replied.

“Senators?”

“Possibly,” Moriarty again responded.

Asked how much he spent on prostitutes, Moriarty said it was “less than $10,000.” Former Moriarty associate Richard Raymond Keith told The Times in January that since 1978, Moriarty and his associates may have spent as much as $750,000 on prostitutes.

In his testimony Wednesday, Moriarty said it was Keith who actually paid the prostitutes with money provided by Moriarty.

Moriarty pleaded guilty in March to seven counts of mail fraud in a plea-bargain agreement with federal prosecutors and since has agreed to cooperate as a government witness against some of his former associates in the hope of receiving a lenient sentence.

For the last four months, investigators for the FBI, the Internal Revenue Service, the Orange County district attorney’s office and the U.S. attorney’s office have met frequently with Moriarty amid speculation that Moriarty’s disclosures might be the basis for future indictments of some politicians on corruption charges.

Moriarty’s frequent memory lapses on the witness stand, however, provided few clues about the progress of the continuing investigation.

Chief Assistant U.S. Atty. Richard A. Drooyan gave no hint of whether he was pleased or disappointed with Moriarty’s performance, saying it was an “inappropriate” subject for comment.

McMillan, however, said he thought Moriarty’s testimony about call girls, political payoffs and kickbacks had actually helped the defense by making Hallidy’s alleged infractions seem almost trivial.

Moriarty’s comments Wednesday were his first public response to charges that he supplied prostitutes to politicians, bankers and others in an effort to gain political clout.

Keith told The Times in January that political figures who were supplied with prostitutes included then-Assemblyman Bruce Young (D-Norwalk), Assembly Democratic Leader Mike Roos of Los Angeles and Assemblyman Richard Robinson (D-Garden Grove).

Also named by Keith and another former Moriarty aide, John E. (Pete) Murphy, were Los Angeles City Councilman David Cunningham and Orange County Supervisor Ralph B. Clark.

Moriarty, describing himself as a reluctant witness in the bank regulation case, also was pushed by McMillan to describe the full extent of his political contributions to state and local officeholders over the years, including payments made through others to hide his role as a major political contributor.

The former principal owner of the Red Devil fireworks company, now in bankruptcy proceedings, testified that his former associate Murphy alone funneled more than $100,000 in Moriarty contributions to various politicians under Murphy’s name.

Moriarty, who lobbied political interests for 25 years to promote “safe-and-sane” fireworks, as well as real estate ventures, estimated that he contributed “several hundred thousand dollars” to politicians since founding his company in 1959.

It was the first time Moriarty has given even a rough estimate in public of his political contributions. The Times earlier identified $634,000 given by Moriarty and his associates to 125 California officeholders and candidates since 1980.

At first Moriarty testified that he could not recall which politicians he had supported with contributions, but under questioning, he said Gov. George Deukmejian could have been one of them. Former Moriarty associates have told The Times they laundered $17,000 into Deukmejian’s 1982 campaign. The governor has said he had no idea that the funds might have come from Moriarty.

At the end of his testimony, Moriarty was shown a letter on the stationery of then-Assemblyman Young, saying that Assembly Speaker Willie Brown (D-San Francisco) wanted contributions given to a number of political figures. Moriarty said the document jogged his memory and acknowledged contributions had been made to those named.

They included Assemblymen Charles Calderon (D-Alhambra), Burt Margolin (D-Los Angeles), Rusty Areias (D-Los Banos), Steve Peace (D-Chula Vista) and Assemblywoman Maxine Waters (D-Los Angeles).

(Margolin subsequently returned his contributions when he learned the source was tied to the fireworks industry.)

Murphy told The Times that he made the contributions requested in the letter and later was reimbursed by Moriarty.

McMillan was allowed to probe Moriarty’s political activities by U.S. District Judge Edward Rafeedie over the protests of Chief Assistant U.S. Atty. Richard E. Drooyan, who argued that the questions were not relevant to the Hallidy case.

Hallidy was vice president of the Bank of Irvine, which has since been taken over by Security Pacific National Bank, when Moriarty, by his own admission, laundered $317,600 through the bank to avoid Internal Revenue Service reporting requirements.

Moriarty testified that Hallidy advised him to withdraw funds from his checking accounts in amounts that were smaller than $10,000 so that he would not have to fill out IRS reporting forms. Moriarty said Wednesday he avoided the reporting procedures because he feared that he might be discovered making improper use of the large amounts of cash he regularly withdrew from the bank.

Emphasizing that he regards Hallidy as a friend, Moriarty said on the witness stand that he regretted having to testify against him.

Moriarty’s attorney, Jan Lawrence Handzlik, added, “This has been a very difficult ordeal for Mr. Moriarty, because of his friendship with Mr. Hallidy.”