Entrepreneur Indicted in Vote Funds Case
Video entrepreneur George Stuart Karl Jr. was indicted Thursday on charges of illegally funneling almost $200,000 to the campaigns of former Democratic presidential hopeful Gary Hart and other candidates.
U.S. Atty. Robert Bonner said there is “no evidence Mr. Hart or any of the other candidates” knew of the illegal contributions allegedly made by Karl, who marketed the popular Jane Fonda Workout videos.
For the record:
12:00 a.m. June 11, 1988 For the Record
Los Angeles Times Saturday June 11, 1988 Home Edition Part 1 Page 3 Column 2 Metro Desk 3 inches; 77 words Type of Material: Correction
Remarks by U.S. Atty. Robert C. Bonner were reported inaccurately Friday in an article about Orange County video entrepreneur Stuart Karl Jr., who was indicted on charges of illegally funneling campaign funds to former Democratic presidential candidate Gary F. Hart. The article reported that Bonner said Karl’s employees had told a grand jury they were reimbursed for campaign contributions made in their names. In fact, Bonner did not say what was told to the grand jury, although he did say the employees have cooperated with federal authorities.
But members of Hart’s campaign staff are under investigation for possibly soliciting the illegal contributions and being on Karl’s payroll, Bonner said. He declined to identify the staffers.
Assistant U.S. Atty. Nancy Stock, who will prosecute the case, said the indictment focuses primarily on Hart’s unsuccessful 1984 presidential bid. But she said the grand jury is still investigating contributions Karl made to the 1988 campaign, which was derailed by Hart’s much-publicized affair with model Donna Rice.
Karl, 34, of Newport Beach is accused in the indictment of funneling about $151,000 to Hart by paying for brochures, television time and other services to the 1984 campaign. He also is accused of having 13 of his employees contribute $8,500 to the candidate and then reimbursing them.
Corporate Funds
Karl illegally channeled another $25,000 in corporate funds to five Democratic candidates for the U.S. Senate by contributing to a Sept. 6, 1986, fund-raiser billed as “An Evening with Barbra Streisand and Robin Williams,” prosecutors said.
The fund-raiser benefited Sen. Alan Cranston (D-Calif.), Sen. Timothy Wirth (D-Colo.), Rep. Tom Daschle (D-S.D.), Sen. Patrick Leahy (D-Vt.) and Rep. Bob Edgar (D-Pa.).
Karl also illegally gave another $13,000 to Wirth and to Orange County Superior Court Judge David O. Carter, an unsuccessful candidate for a congressional seat in 1986, and to former Massachusetts Lt. Gov. John F. Kerry’s successful bid for the U.S. Senate in 1984, Stock said.
The 12-count indictment charges Karl with conspiracy, contributing more than federal law permits to federal candidates, unlawfully making campaign contributions in the names of others and causing false statements to be made to the Federal Elections Commission.
Federal election laws prohibit contributions of more than $1,000 per person to any federal candidate in any one race. They also bar any corporate contributions and the use of conduits to disguise the source of contributions.
Bonner said Karl violated all three laws. Some of his contributions and reimbursements came from his personal account and some from his corporate account, Stock said.
If he is convicted of all counts, he faces a maximum of 36 years in prison and a $930,000 fine. Karl is scheduled for arraignment June 20 before a federal magistrate in Santa Ana.
Defense attorney Robert Perry said he knew Karl was under investigation, but he called the indictment “a surprise.” He said he would not comment on the indictment because he had not seen it.
Karl’s company, Karl Video Corp., made millions marketing the Jane Fonda Workout videos and was acquired by Lorimar Telepictures, Culver City, in 1984. He became president of the entertainment giant’s Karl-Lorimar Home Video division but was forced to resign in 1987 because of conflict-of-interest allegations.
Stock said “executive management types” at Karl’s company served as conduits for the Hart contributions, but most will not be charged because they are cooperating with the investigation. She said Hart campaign staffers had also cooperated with the probe but would not say whether Hart was questioned.
Funds Returned
Bernard Schneider, a Laguna Beach attorney who was general counsel to Hart’s 1984 and 1988 campaigns, said $3,000 in contributions to Hart’s 1988 campaign were returned, but none can be repaid from the 1984 campaign because it has no assets.
“We didn’t make any value judgments or do any investigation,” he said. “All we did was to find those contributors who were also employees of Karl Video Corp. (in 1988). We found only three, and we refunded the contributions they had made, which totaled $3,000.”
He added there was no proof the three contributions were illegally funneled, but “to clear the air,” they were returned anyway.
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