Prosecutors End Probe of Dealings by Moriarty

Federal prosecutors Friday closed the books on the W. Patrick Moriarty political corruption scandal, the most extensive investigation of California elected officials in the last 30 years.

“Given the difficulties in developing evidence and prosecuting political corruption cases, this investigation was extraordinarily successful,” said U.S. Atty. Robert C. Bonner in announcing the end of the 4-year-old case.

All told, 11 men--including Moriarty, local government officials, a banker and a former legislator--were convicted of bribery, fraud and other charges.

Bonner called it “one of the most significant and far-reaching political corruption cases ever prosecuted in California.”

Missed Top Echelons

But the Moriarty case never penetrated the top echelons of political power in Sacramento as many former Moriarty associates and law enforcement officials had initially anticipated.

The former fireworks manufacturer provided important testimony that helped win a broad range of local government convictions, but some of those closest to the case say Moriarty stopped frustratingly short of providing evidence against top-level targets of the investigation.

The most prominent political figure convicted in the case was former Assemblyman Bruce Young (D-Norwalk), who was convicted of five counts of mail fraud for laundering campaign funds and concealing the source of political contributions.

Young hopes to overturn his conviction on the basis of a recent U.S. Supreme Court decision that severely limits the use of mail fraud statutes in political corruption cases.

Assembly Speaker Pro Tempore Mike Roos (D-Los Angeles) and former Orange County Board of Supervisors Chairman Bruce Nestande, an unsuccessful Republican candidate for lieutenant governor last year, were investigated, but no charges were filed.

At its height, the investigation spurred calls for reform of California’s campaign finance laws and caused consternation among a number of legislative leaders as disclosures mounted about Moriarty’s providing prostitutes to elected officials and donating and laundering more than $150,000 in campaign funds to win approval of a 1982 fireworks bill that would have benefited his Anaheim-based fireworks company, Pyrotronics Inc.

Brown’s Reaction

But Friday, Assembly Speaker Willie Brown (D-San Francisco) told reporters through an aide, “I told you guys three years ago I didn’t think it was much more than a newspaper story.”

Senate President Pro Tem David A. Roberti (D-Los Angeles) was not available for comment.

Chief Assistant U.S. Atty. Richard E. Drooyan said federal prosecutors were hampered by provisions of state law that allow legislators to have outside business dealings with individuals or organizations that also have business with the Legislature.

Young, convicted on five counts of mail fraud, was acquitted on 23 counts relating to his outside business dealings with Moriarty, who had been pushing fireworks legislation with Young’s help.

“We are a very large state. (Being a legislator) is a full-time job, and yet the system permits them (legislators) to have an outside business that can be in conflict with their official duties. The existence of those provisions of the code, I think, creates problems for prosecutors,” Drooyan said.

Moriarty’s level of cooperation after he pleaded guilty to seven counts of mail fraud was also a continuing issue in the investigation. Prosecutors complained in a court document that Moriarty had been “somewhat reluctant to cooperate completely” due to his close relationships with some of the key targets of the investigation.

But Drooyan, the chief federal prosecutor in the case, and Michael R. Capizzi, the Orange County deputy district attorney who was co-prosecutor, said Moriarty provided investigators with a large amount of information and testified accurately against others involved in the scandal.

‘Only Mr. Moriarty Knows’

“Does he know other things that he hasn’t told us about? I don’t know. Only Mr. Moriarty knows the answer to that,” Drooyan said.

Jan Lawrence Handzlik, Moriarty’s lawyer, insisted that Moriarty gave prosecutors “the full benefit of his knowledge in every area into which they inquired.”

Further indictments in the case were not forthcoming because there was simply no evidence, Handzlik said.

Orange County investigators began the Moriarty probe in 1983 after The Times reported Moriarty’s business dealings with legislators and the huge amounts of money he and associates were donating to political campaigns. In addition, investigators turned up evidence of kickbacks in Moriarty’s dealings with California Canadian Bank.

Federal authorities joined the probe in March, 1984, and began a series of indictments that ultimately led to guilty pleas or convictions of Commerce City Councilmen Robert Eula, Arthur Loya and Ricardo Vasquez, Commerce Redevelopment Director Phil Jacks and Las Vegas card room manager Frank Sansone. The five were all involved with Moriarty in the California Commerce Club, a poker parlor that Moriarty built and in which some of the city officials held a hidden interest.

Other indictments were returned against former California Canadian Bank Vice President Floyd Walden, who was convicted of taking kickbacks from Moriarty on bank loans, and Bank of Irvine Vice President Nelson Hallidy, who was acquitted on currency reporting charges. Walden is still in prison.

2 Councilmen Convicted

Long Beach City Councilman James Wilson and Carson City Councilman Walter J. Egan were indicted separately. Wilson was convicted of taking more than $50,000 from Moriarty in return for helping win approval of a fireworks ordinance but died before beginning his prison sentence. Egan has been released from prison after being convicted of extorting money from Moriarty to enhance his political power in the city.

Before the investigation began, one of Moriarty’s closest associates was Richard Raymond Keith, a promoter who lived lavishly from the proceeds of deals with Moriarty.

As it became clear that indictments were likely, pressure mounted and the two men apparently had a falling out that never has been repaired. Keith ultimately told reporters about his dealings with Moriarty, the use of prostitutes to win political favors and efforts by Moriarty to launder campaign funds.

Keith was convicted of tax evasion and other charges. Moriarty’s seven-year sentence was later reduced to five years. Both Keith and Moriarty remain in prison.