Lawyer Says Egan Was a Courier but Not a Lawbreaker

Indicted Councilman Walter J. (Jake) Egan was the courier for $20,000 in allegedly unlawful contributions that convicted political fixer W. Patrick Moriarty and his associate provided for Carson campaign activities, Egan’s attorney acknowledged this week.

But Egan did not use the money himself and did nothing wrong, attorney Robert B. Gaunt said in an interview that provided new information about Egan’s role in the political activities that led to his indictment last week by a federal grand jury on charges of mail fraud and interference with commerce by extortion.

Gaunt said Egan has told authorities that he delivered a $5,000 check to a political consultant as the first contribution to a campaign in the spring of 1981 that was backed by Moriarty and his associates.

The campaign was created to help elect an official who would support Moriarty’s plan to develop a 160-acre landfill in central Carson, according to several of those involved in the effort. The campaign ultimately was fueled by at least $30,000 from Moriarty and an associate, Richard Raymond Keith, spread among three political action committees, according to public records and interviews with Moriarty and Keith.

After the campaign ended with the election of Councilwoman Vera Robles DeWitt, the political committees continued operating for about six months. Egan told investigators that he later returned another $15,000 in contributions to Moriarty when the Carson campaign ended, Gaunt said.

“I don’t see how they can prove this activity is illegal or that it was an attempt to defraud the city of Carson” as is charged in the indictment, said Gaunt, who added that he has discussed the indictment with prosecutors but has not yet reviewed it.

“It is an interesting theory, but . . . I couldn’t see that Jake should have reported anything because he didn’t get the money.”

The 11-count federal indictment claims that Egan was required by state law to disclose his participa tion in the Moriarty-backed campaign. State law requires political committees that receive contributions report “each person, if any, with which the committee is affiliated or connected,” the document says.

In previous interviews with The Times, Egan has denied that he was a central figure in the Moriarty-backed campaign. He could not be reached for comment Tuesday or Wednesday and previously did not wish to elaborate on the charges until he had reviewed the indictment.

The indictment specifically charged Egan, a two-term councilman, with nine counts of mail fraud and two counts of interference with commerce by extortion. The complaint centers on allegations that Egan accepted illegal contributions from Moriarty in exchange for Egan’s support of a multimillion-dollar development planned by Moriarty.

Moriarty was a general partner in a firm called Casa del Amo Estates, which held a long-term lease on the Carson property. The company initially planned to develop the site as a mobile home park, but later proposed a $750-million business and industrial center after state health officials became concerned about the potential danger of constructing housing on a contaminated dump site.

Moriarty’s plans died when he became the central figure in a statewide political corruption investigation, which has been described as California’s biggest in 30 years. Moriarty, who has been sentenced to seven years in federal prison, has made at least $260,000 in hidden contributions to politicians since 1980, according to former Moriarty associates and public records.

Nine Convicted

Egan’s indictment is the 11th stemming from the Moriarty investigation, being jointly conducted by the U.S. attorney and the Orange County district attorney. So far, nine of those charged have been convicted or pleaded guilty and one has been acquitted. Egan is to be arraigned Monday.

In effect, Egan’s indictment charges that he engineered “a scheme” to conceal campaign activities and special-interest influences arising from his connection with Moriarty and Moriarty’s former associate, Keith, who is serving a four-year prison term in connection with the Moriarty case.

The indictment claims that at a meeting with Moriarty and Keith in 1980, Egan solicited money for the creation of a political action committee. It says the committee, later dubbed the Public Information and Education Committee, was formally established at Egan’s instruction by political consultant Arthur Forcier, who lives in Studio City and works as an instructor at East Los Angeles College.

In exchange for money to launch the committee, the indictment alleges, Egan agreed to attempt to elect candidates to the City Council who would support Moriarty’s development proposal, while also trying to win incumbents’ endorsements of it.

Allegedly Gave Information

As part of the deal, Egan himself agreed to support the Moriarty project and to provide Moriarty and Keith with information from City Council executive sessions, the indictment charges.

In a brief interview immediately after the indictment, Egan did respond to some of the charges, saying, “I never accepted any contributions from Keith or Moriarty and I never revealed anything from City Council executive sessions.”

It was at another meeting of Egan, Forcier and Keith that Egan gave Forcier the $5,000 check used to launch the political committee, said Gaunt, Egan’s attorney. The check, signed by Keith, had been given to Egan by Keith, Gaunt said.

“The whole thing came about because they (Moriarty and Keith) thought they should get another favorable vote on the Carson council,” Gaunt said. “They were trying to get Vera (DeWitt) elected for the purpose of creating a council majority. . . . Egan saw it was in his best interest to help them.”

Pro-Development Bloc

After the election, Egan, DeWitt and Councilwoman Kay Calas became an admitted pro-development voting bloc that consistently supported Moriarty’s plans, council minutes show.

Calas and DeWitt have denied any knowledge of the Moriarty-backed political activities.

Besides becoming part of a majority voting bloc, there was an additional advantage for the councilman, Gaunt said. At the time, Moriarty was proposing to build the mobile home park on his vast Carson property, and mobile home residents were a strong political constituency for Egan, Gaunt said.

“That’s one reason Jake supported it,” he explained.

Other Allegations

The indictment further alleges:

- That during both 1981 and 1982, Egan received cash payments from Keith. No such payments are listed in campaign disclosure reports, and Gaunt said Egan was “flabbergasted” by the allegation, which he denied.

- That Egan received and returned the $15,000 in checks that Gaunt, his attorney, acknowledged his returning. In a February interview with The Times, Egan said of those checks: “Art (Forcier) gave them to me to return. I took them down and gave them to Pat” Moriarty.

- That in May, 1981, Egan received two other checks totaling another $15,000 from Keith for the Forcier-run committee. Egan has argued that Keith mailed those checks, made out to the committee, directly to Forcier in “plain white, hand-addressed envelopes.”

- That Forcier gave Egan $3,500 and was reimbursed by Moriarty. Egan has denied the allegation.

- That the Forcier-run committee was organized at Egan’s “request and direction” and two satellite committees, created to execute political activities, were organized to “benefit, directly and indirectly, defendant Walter J. Egan.” Egan has said that Forcier conceived the creation of the committees, and that he merely introduced Forcier to Keith and Moriarty.

The campaign literature distributed by the committees primarily attacked DeWitt’s major opponent in the 1981 race, Sylvia Muise. Although Muise lost that election, she was elected to another council seat later and is now mayor.

Mail Fraud

The nine counts of mail fraud with which Egan has been charged are linked to nine mailings that Egan is accused of causing to be sent and delivered as part of what the indictment calls “the scheme”--five pieces of the campaign literature, three political committee organization statements and Egan’s own statement of economic interests.

The two counts of interference with commerce by extortion are related to Egan’s alleged acceptance of the $15,000 in checks from Keith in May, 1981, and $5,000 from Moriarty in June, 1982, while acting “under color of official right.”

Egan has denied getting any of that money. In previous interviews, he has said Forcier received those payments.

Forcier could not be reached for comment this week.

If convicted, Egan faces up to five years in federal prison and a $1,000 fine for each count of mail fraud and up to 20 years in prison and a $10,000 fine for each count of interference with commerce by extortion.

Once Political Allies

Forcier and Egan, once political allies, have recently parted company. Indeed, part of the evidence used against Egan will be a tape recording obtained when Forcier was wired by authorities and then sent to talk to Egan about the case, Gaunt said.

Chief Assistant U.S. Atty. Richard Drooyan, who will be prosecuting the case, informed Gaunt of the wiring during a telephone conversation, Gaunt said, adding, “Egan certainly was not advised at the time.”

Drooyan would not comment on the case.

Also called upon to testify will be Moriarty himself, said his attorney, Jan Lawrence Handzlik. Moriarty testified before the grand jury, and his testimony “supported the government’s position as outlined in the indictment,” Handzlik said.

If testimony by Moriarty or Keith is critical to the prosecution’s case, the prosecution may have a credibility problem to surmount, Gaunt asserted.

‘Have a Lot to Gain’

“Clearly you have convicted felons,” he said. “It’s fairly clear to me that these people have a lot to gain and nothing to lose when they cooperate with investigating agencies . . . attempting to create favor.”

Gaunt also speculated that Moriarty and Keith may be attempting to retaliate against Egan for a 1985 vote he cast to require Carson to disclose on city property records the potential toxicity of the Moriarty-leased property. Moriarty’s company was attempting to sell its interest in the site at that time.

In an interview with The Times on Wednesday, Moriarty called Gaunt’s reasoning outrageous.

“That’s a lot of bunk,” Moriarty said. “I positively deny any notion of revenge.”

Gaunt said that Egan’s financial records have been subpoenaed and that the treasurers of his campaign committees have been interviewed by investigators. Before the indictment, Egan also was questioned, but Gaunt said he and Egan felt they had cleared up any potential problems.

“I came to the conclusion that they were looking at how the money was donated and whether it should have been reported as a contribution to Jake Egan,” he said. “We tried to cooperate. We felt there was nothing to hide. . . . This came as a bolt out of the blue. We’re still kind of reeling.”