U.S. Judge Dismisses 2 Corruption Counts in Moriarty’s Conviction

A Los Angeles federal judge on Monday dismissed two political corruption charges against W. Patrick Moriarty, erasing the former Anaheim fireworks manufacturer’s convictions for laundering campaign funds and unlawfully influencing elected officials.

But the ruling by U.S. District Judge William J. Rea--prompted by a recent U.S. Supreme Court decision restricting the use of the federal mail fraud statute--will have no effect on Moriarty’s five-year prison sentence, which he began serving early last year.

Rea refused a motion to dismiss two additional mail fraud counts, which might have pared as much as three years from Moriarty’s time at Lompoc federal prison.

The two counts dismissed Monday were the only charges involving Moriarty’s dealings with elected state officials. The counts concerned secret campaign contributions to some state legislators, including former Assemblyman Bruce Young (D-Norwalk), who was convicted of mail fraud earlier this year for his dealings with Moriarty.

Prosecutors had argued that Moriarty’s activities deprived the people of California of their right to good, honest government. But the Supreme Court ruled in June that such rights are “intangible” and are not covered by the mail fraud statute. The high court said the statute, frequently used in political corruption prosecutions, was only intended to protect property rights.

“If one of the objects of the so-called Moriarty probe was an investigation into corruption at the state level, the case has not led to any results, at least insofar as Mr. Moriarty is concerned,” Moriarty’s lawyer, Jan Lawrence Handzlik, said after the ruling.

The attorney added that he will probably appeal Rea’s ruling on two additional counts involving Moriarty’s dealings with Commerce city officials to obtain a license for a card club and kickbacks he paid to a former vice president of California Canadian Bank for favorable treatment on loans.

Neither of those counts involved a clear loss of money or property, Handzlik argued. But the government disagreed, claiming the card club license and the kickbacks paid to a former bank official were tangible losses of the kind still within the scope of the mail fraud statute.

Rea agreed with the government, ruling that “the right to control how money is to be spent is a property right.”

Dismissal Recommended

But even the prosecution conceded that the state political corruption counts could no longer be considered mail fraud, and Chief Assistant U.S. Atty. Richard E. Drooyan recommended dismissal.

Monday’s action by Rea does not reduce Moriarty’s prison time, because the sentences on the two counts run concurrently to the prison terms on five other mail fraud charges to which he pleaded guilty in March of 1985.

Dismissal of either of the other two charges at issue Monday would have resulted in a sentence reduction of either two years, in the case of the bank charge, or three years, on the count involving the card club.

Rea’s ruling is expected to have some impact on at least two other convictions in the Moriarty probe.

Former Carson Councilman Walter (Jake) Egan has raised the same mail fraud issue in his appeal, and Young’s lawyer, Alan Dressler, said they will raise a similar challenge either on appeal or on a motion similar to Moriarty’s.

“We haven’t done anything yet, with emphasis on the ‘yet,’ ” Dressler said.