Witness Describes Scheme to Conceal Payment to Young

As the end of the prosecution case approached in the political corruption trial of Bruce E. Young, the government introduced important testimony Friday about an alleged money-laundering scheme in which $10,000 was funneled to the former Norwalk assemblyman for work on behalf of a Canadian cable television firm.

The testimony by J. Murray Wilson, a former public relations consultant, focused primarily on the controversial business dealings of Young, a Democrat, but also touched on the financial affairs of two prominent Republican political figures--former state Sen. Dennis Carpenter of Newport Beach and political consultant Stuart K. Spencer.

Wilson, who once worked with Young on a campaign to win a Los Angeles area cable television franchise for the Canadian firm, told how he set up a bank account for a fictitious company to help launder a $10,000 check to Young.

Wilson, 30, said he was hired by Carpenter in 1981 to work for the politically powerful public relations firm of Carpenter & Spencer and was “directed” by Carpenter to open a bank account for a non-existent company called JMW Associates.

Under questioning by Chief Assistant U.S. Atty. Richard E. Drooyan, Wilson, now a Newport Beach real estate salesman, described himself as Carpenter’s former “right-hand guy” and said he deposited a $15,000 check from Carpenter and Spencer in the JMW Associates account in 1981, later writing a $10,000 check to Young’s consulting firm, Young Thinking Inc.

During the same period, Wilson testified, Carpenter had hired Young to help Rogers Cable Systems of Toronto, win a bid for a lucrative franchise serving seven southeast Los Angeles County cities. Young, a proponent of legislation to deregulate the cable television industry in California in 1982, also operated a political consulting firm, working for Rogers and another cable television firm, Falcon Communications.

The government says the $10,000 consulting fee for Young’s work on behalf of Rogers Cable was laundered through the JMW Associates account and then into a trust account for Young’s lawyers, Alexander and Hughes, before it was finally turned over to Young.

As a lobbyist in Sacramento in 1981, according to federal officials, Carpenter would have been required to report any payments made by him to a legislator. Government sources told The Times on Friday that he failed to report the $10,000 check to Young.

Young, 40, who served in the Legislature from 1976 to 1984, is charged with 28 counts of mail fraud in connection with failure to report his income from the cable television industry and from convicted political corrupter W. Patrick Moriarty in 1981 and 1982.

While the government was warned by U.S. District Judge Dickran Tevrizian earlier this week that part of its case involving a complicated $50,000 investment with Moriarty appears to be questionable, the judge made it clear at the time that he was not speaking about the bulk of the allegations against Young.

The key government charges revolve around Young’s unreported use of a Ford Bronco provided by Moriarty in 1981 and 1982 while Young was crusading for fireworks legislation, and his income from Rogers Cable and another cable firm, Falcon Communications.

Friday’s courtroom appearance by Wilson not only provided the government with some of its strongest testimony to date against Young, but also shifted the public focus of the continuing investigation into Moriarty’s ties with California politicians to Carpenter’s activities while a Sacramento lobbyist.

Wilson, who called himself a “lifelong friend” of Carpenter, said that another check deposited in his JMW Associates account on July 9, 1981, was a $275,000 check issued to the Carpenter & Spencer public relations firm by U.S. Cable Systems Inc., the U.S. subsidiary of Rogers Cable.

Under questioning from Drooyan, Wilson said that beginning on the following day he then wrote a dozen checks “on orders from Carpenter” that included large payments both to Carpenter and to his partner, Spencer, one of President Reagan’s most trusted political advisers and a longtime consultant in California political races.

Among the checks funneled into Wilson’s account and out again were a $70,000 check to an account by Carpenter with an investment banking firm, a $110,000 check to Carpenter, and checks for $3,000 to Carpenter’s sons, Bruce and Kenneth.

Wilson also testified that at Carpenter’s direction he issued a $20,000 check to Spencer on July 10, 1981, and another check to Spencer for $17,008.46 on the same day. He indicated that he was given no explanation of why he was being ordered to handle the money in that fashion.

Another check issued by JMW Associates on July 13 was made out to cash for the sum of $9,999. Wilson testified that he cashed it at Carpenter’s direction and gave the money to Carpenter’s bookkeeper, saying he understood that Carpenter intended to use the money to buy jewelry.

Both Spencer, whose name has never before been brought into the Moriarty case, and Carpenter declined comment Friday on Wilson’s testimony.

While Carpenter was originally scheduled to be a prosecution witness in the case against Young, federal officials decided against calling him earlier this week. Drooyan and Chief Asst. Orange County Dist. Atty. Michael R. Capizzi, a special federal prosecutor in the Moriarty case, declined Friday to say whether Carpenter himself is now a possible target for investigators.

Drooyan’s questioning of Wilson also focused on defense claims that Young, required to report any income of $10,000 or more from a consulting client, had actually repaid $100 or $200 of the income from JMW Associates and thus was not in violation of political reporting laws in 1981.

Young’s defense lawyers, George Walker and Alan Dressler, have contended that a notation on Young’s financial books shows that the money might have been paid back to JMW Associates by Roberta Hines, Young’s former secretary.

“Do you know Roberta Hines?” Drooyan asked.

“No,” Wilson said.

“Did Roberta Hines ever give you any money to reimburse you for an overpayment?” Drooyan asked.

“To me personally, no.”

Under cross-examination, Wilson backed down slightly from the testimony, saying he may have met Hines. After first minimizing his contacts with Young, Wilson also conceded that Young had introduced him to several local politicians in the successful bid by Rogers Cable for a contract with cities in the Downey area.

Wilson was the 23rd prosecution witness to testify against Young and Drooyan disclosed Friday that the government plans to rest its case after calling a few more witnesses Tuesday. Young’s lawyers are expected to begin unveiling their defense later in the week, but so far have refused to reveal their courtroom plans.