Demands Apology : Rival Threatens to Sue Gallegly

Republican congressional candidate Sang Korman has threatened to file a defamation lawsuit against Rep. Elton Gallegly (R-Simi Valley) unless Gallegly apologizes for what Korman maintains was a malicious attack on his character.

“He’s trying to make me lose face and he’s trying to make me lose my credit,” Korman said. “Why did he attack me if that’s not the truth? He can simply say he made a mistake.”

Gallegly insists he has “nothing to apologize for” and has, in turn, accused Korman of creating a smoke screen to divert attention from the source of Korman’s campaign funds.

Korman, a South Korean-born immigrant who lives in Newbury Park, is paying for his high-priced campaign for the June 7 primary almost entirely with his own money and from contributions from Korean-Americans who live outside the district.

But four individuals who attended an April 6 speech by Gallegly to employees of Litton Industries said in separate interviews this week that they heard Gallegly assail Korman. Each reported that Gallegly said that if Korman wants to repay America for the opportunity it has given him, he should start by repaying an outstanding loan.

The four are engineers at Litton in Woodland Hills. Three said Gallegly mentioned the Small Business Administration, or SBA, as the source of the loan. The SBA guarantees bank loans to small businesses and makes a limited number of direct loans to veterans, the handicapped and others. Until 1982, it also made loans to minority entrepreneurs.

One of the four said he tape-recorded Gallegly’s speech at the Sportsmen’s Lodge in Studio City--heard by more than 100 members of the Litton Guidance and Control Division Management Club--and has made a transcript of it. William Mras, volunteer editor of a quarterly management club newsletter, recalled that Gallegly described his opponent as follows:

“He said certain positive things about the man as a new citizen, and he said he wanted to pay back this country for what it did for him,” Mras said. “Then he made some mention about paying back a loan. It was more of a passing remark.”

Mras would not disclose, however, whether Gallegly’s remark was audible on the tape or recorded as part of the transcript. He refused to make either available to The Times.

“Since we made that recording without the congressman’s permission, we don’t think it would be right to release it outside,” Mras said. However, he said he would provide the tape to Gallegly if he requested it.

First informed of the tape’s existence Wednesday, Gallegly said, “I’d like to hear it.”

But when told of Mras’ offer to give it to him and possibly resolve the conflicting accounts of his speech, Gallegly responded, “I’m not going to pursue it.”

Informed of these events, Bob Lavoie, Korman’s campaign manager, said Thursday, “Mr. Gallegly has maintained all along that he never made the remark about the loan. . . . If he didn’t say it, he’d release the tape.”

Peter Bagatelos, the Korman campaign’s attorney, said Thursday the campaign would contact Litton to advise the company to preserve the tape of Gallegly’s speech because it could become evidence in a libel or slander lawsuit.

Korman’s campaign maintains that the issue has raised questions about Gallegly’s credibility and character. Gallegly counters that it is nothing more than a blatant attempt by his long-shot challenger to grab much-needed publicity and draw him into a frivolous dispute.

Still, Gallegly’s accounts of the speech to the employees of Litton, which handles major government defense contracts, are ambiguous. He denied in an interview last month that he had said anything about Korman or a loan. He said the subject may have been raised by an audience member during a question-and-answer period.

Gallegly said Wednesday he no longer recalled what, if anything, he had said on April 6 about his opponent or a loan. He maintained he mentioned neither Korman’s name nor the SBA. He also said he had not asserted that Korman had defaulted on a loan.

“Someone had said to me somewhere back that the guy should pay off his small business loans,” Gallegly said. “I’ve heard it on more than one occasion.”

But Gallegly said the comment was so inconsequential, “I did not do any opposition research on it. . . . If I had thought it was a big deal, I would have done some research.”

Ben Key, Gallegly’s Sacramento-based political consultant, said, “Elton told me he never said it. There’s nothing to apologize for.”

Korman said he has never borrowed money from the U.S. government. He said he had taken two construction loans from banks for two shopping centers that his company, Goldwell Investment, constructed in downtown Los Angeles. One loan has been repaid and the other is being paid on schedule, he said.

“I never delayed even a penny in interest,” Korman said.

A review of SBA records disclosed that Korman has never had an SBA loan, said John Tumpak, the SBA spokesman in Los Angeles.

The other three Litton employees who said they heard Gallegly refer to his opponent’s failure to repay a loan were Harvey Gurien of Thousand Oaks, Stephen Sacks of Westlake Village and Jack Cimo of Woodland Hills. All said they understood from the context that Gallegly was referring to both Korman and the SBA. Gurien’s son, Michael, works in Korman’s campaign.

Although he said he did not remember Gallegly’s exact words, Cimo recalled that the congressman was talking about his opponent when he said: “He should pay off his Small Business Administration loan.” Cimo added, “I don’t know whether he was joking.”

Sacks also said Gallegly was discussing his opponent when he said: “He should pay back his small business loan.”

Sacks added, “This was during the course of his speech. He made the statement, and he just went on to something else. . . . I felt he was just trying to throw something at the guy’s character.”

Gurien recalled that Gallegly said of his opponent: “Here’s a young Korean who came here about 10 years ago who made good and he thinks so highly of the United States he would like to repay his debt by running for Congress. Then he ought to start by repaying his SBA loan.”

Korman came to the United States in 1972.