Video Entrepreneur Pleads Guilty to Campaign Donations Conspiracy

Orange County video entrepreneur Stuart Karl Jr. pleaded guilty Tuesday to conspiring to violate federal campaign contribution laws, pledging his cooperation in an FBI investigation of nearly $200,000 in illegal campaign contributions to Democratic presidential candidate Gary Hart and congressional candidates in six states in 1984 and 1986.

Under terms of a plea bargain, Karl, 36, could be fined up to $350,100 and could be subject to probation for up to six years. But he would not be jailed, although the counts to which he pleaded guilty--one a felony and one a misdemeanor--carry a combined maximum of six years in prison.

The plea bargain was approved by U.S. District Judge Alicemarie H. Stotler in Santa Ana.

Stotler released Karl on $25,000 bail pending a Sept. 19 sentencing hearing. By approving the agreement Tuesday, Stotler opened the door to immediate questioning of Karl by federal investigators in an “ongoing investigation” of Hart’s campaign finances, as well as other congressional campaigns mentioned in the indictment.

Assistant U.S. Atty. Nancy Wieben Stock said the probe “would encompass any and all violations relating to federal office seekers” and “co-conspirators.”

“It was a very thorough investigation to begin with, and Mr. Karl’s participation could assist in finishing it,” Stock said.

The plea bargain was struck after what Karl’s attorney, John W. Vardaman Jr. of Washington, described as “hard” negotiations with Stock.

“He’s anxious to put this chapter of his life behind him,” Vardaman told Stotler.

Federal Violations

Karl was indicted June 9 on 12 counts of federal campaign violations after employees of his company, Karl Home Video, told investigators that he had reimbursed them in cash for contributions made in their names to Hart, Sen. John F. Kerry (D-Mass.) and others.

In an indication of what federal investigators hope to get from Karl, Stock told Stotler that the probe revealed that Karl was “engaging in conspiracy with other individuals, campaign staffers and employees of his company” to defraud the government, “principally (in) the ’84 Hart campaign.”

Stock said it was clear that Karl knew that the contributions made to Hart exceeded the $1,000-a-person limit on contributions to a federal campaign. Besides violating campaign disclosure laws, the contributions to Hart allowed his campaign to receive federal matching funds for illegal contributions.

The indictment also charged that Karl paid for certain expenses incurred by Hart, particularly in the closing days of the campaign before and at the 1984 Democratic Convention.

Stock said that “by way of agreement” with the Hart campaign, “Mr. Karl would pick up the tab on numerous and sundry types of expenses” that included media services but also extended to rental cars and air transportation for Hart’s campaign staff and the purchase of promotional plastic bags for the convention.”

Tacit Agreement

“Throughout this time period, Mr. Karl had an explicit and also tacit agreement that he would pick up these types of expenses,” Stock said.

Stock would not identify any officials within the Hart campaign with whom Karl may have had such an agreement. There has been no suggestion that Hart was personally involved.

Karl was accused in the indictment of making $159,500 in illegal contributions to Hart’s 1984 campaign. In addition, he was accused of making $13,300 in illegal contributions to three other candidates: Kerry, U.S. Sen. Timothy Wirth (D-Colorado) and Orange County Superior Court Judge David O. Carter, an unsuccessful 1986 congressional candidate.

Also receiving campaign funds through an illegal $25,000 contribution from Karl Home Video Corp. to a 1986 fund-raiser involving singer Barbra Streisand and comedian Robin Williams were a number of Democratic candidates for the U.S. Senate. They included Sen. Thomas A. Daschle of South Dakota, Bob Edgar of Pennsylvania, Sen. Patrick J. Leahy of Vermont and Sen. Alan Cranston of California.