Jane Fonda Video Made Karl’s Fortune : Whiz Kid Had Quick Ride Up, Then Fell

Stuart Karl, who pleaded guilty Tuesday to conspiring to violate federal laws limiting political contributions, was a major Orange County Democratic activist, fund-raiser and Hollywood whiz kid until allegations of campaign irregularities surfaced in January.

He has been uncharacteristically silent since then, refusing to discuss political and business controversies that have made him the target of both criminal prosecutions and civil lawsuits.

Karl of Newport Beach was indicted June 9 after employees of his company, Karl Home Video, told federal investigators that he had reimbursed them in cash for contributions made in their names to political candidates in 1984 and 1986. Those candidates included former Democratic presidential candidate Gary Hart and congressional candidates in six states.

Under the terms of the plea bargain that led to Karl’s court appearance Tuesday, he could be fined up to $350,100 and could be subject to probation for up to six years but will not go to prison. In return, he agreed to cooperate with a federal investigation of campaign financing.

Embryonic Video Industry

Karl, 36, drew attention in college as the youthful publisher of trade magazines for water beds, spas, saunas and the then-embryonic video industry.

Later, Karl Home Video made a fortune by persuading Jane Fonda to exercise on a videocassette.

The Fonda fitness tapes demonstrated that Americans would buy alternatives to regular movie fare. In 1984, Lorimar-Telepictures bought out Karl’s company but left him in charge of Karl-Lorimar Home Video, a new subsidiary.

That year, Karl began pouring huge sums into politics, especially former Colorado Sen. Gary Hart’s Democratic presidential campaign. This, coupled with fund raising by Laguna Beach developer David Stein, put Orange County on the national political map as a stronghold of Hart financial support.

Critics, however, said the money was really being raised from Stein’s and Karl’s friends in the entertainment industry, mostly outside of Orange County.

Image Started to Fade

Karl’s image of a successful, youthful tycoon started to fade at the beginning of 1987. He and two associates resigned from Karl-Lorimar after Lorimar-Telepictures said Karl’s company had dealings with another company in which Karl and the two associates reportedly had an interest.

That alleged conflict of interest represented a “breach of our code of ethics,” Lorimar officials said at the time.

Lorimar sued Karl in November, alleging that he had violated the terms of an agreement made with the company at the time of his resignation.

As Karl’s problems mounted, former competitors and associates said his previous successes had rankled them. They described him variously as “too big for his britches” and someone who thought he was a genius because of his early successes.

New Film Company Planned

Before allegations of campaign law violations surfaced in January, Karl told The Times that he was starting a new film company with James Irvine, fourth-generation scion of the pioneering Irvine family.

One project Karl said he hoped to start this year: “Jack,” a feature film on societal changes of the last 25 years--in which John F. Kennedy would return to modern-day America.

Though he answered questions in court Tuesday, Karl refused to talk to reporters, as he has for the last 7 1/2 months. After pleading guilty to campaign law violations, he was allowed to remain free on $25,000 bail pending a sentencing hearing Sept. 19.