3 Legislators Take In Nearly $245,000 in Fees, Gifts

Times Staff Writer

The three San Gabriel Valley legislators whose offices were searched by the FBI last week in a political corruption investigation received nearly $245,000 in speech fees and gifts from private companies, trade associations and other groups and individuals in the past two years.

Sen. Joseph B. Montoya (D-Whittier), Assembly Republican leader Pat Nolan (R-Glendale) and Assemblyman Frank Hill (R-Whittier) accounted for more than half the speech income and gifts reported by the 15 state legislators who represent the San Gabriel Valley.

Montoya, chairman of the Senate Business and Professions Committee, accepted more than $80,000 in honorariums in 1986 and 1987. Most of the money was for speeches, but he also received $1,000 for touring a pharmaceutical plant.

$28,000 in Gifts


In addition, he received $28,000 worth of gifts, ranging from a $7,000 tour of Europe paid for by companies in the waste-incineration business to $750 worth of pest control work by a termite company.

Nolan picked up $22,850 for speeches and $44,973 in gifts, including trips abroad. Hill received $41,725 for speeches and $26,208 in gifts.

Legislators are not required to disclose outside income until March 1 of the year after the income was received. The latest financial disclosure statements on file with the state Fair Political Practices Commission list income in 1987 and 1986.

However, Montoya has disclosed that he accepted an honorarium this year from Peach State Capitol Investments, a bogus company set up by the FBI as part of a sting operation designed to expose corruption. The San Gabriel Valley Tribune quoted Montoya as saying in a telephone interview that he had accepted a $3,000 honorarium from Peach State. Montoya would not confirm that figure to a Times reporter.


Montoya has denied any wrongdoing and has retained a Sacramento defense attorney to represent him.

Nolan, who has also denied any wrongdoing, reportedly received a $5,000 campaign contribution from Peach State that he failed to report in what aides have called an oversight. Campaign contributions received in the first half of this year should have been reported to the Fair Political Practices Commission in July. Nolan correctly reported another $5,000 contribution from Peach State to an Assembly campaign committee that he controls.

Hill, who has worked closely with Nolan in raising money for Republican candidates, has refused to comment on the FBI investigation.

About 30 federal agents searched the offices of the three area legislators and Assemblywoman Gwen Moore (D-Los Angeles) last week. The raid led to disclosure that the FBI had been investigating corruption in Sacramento for two years and had set up two phony companies that reportedly made payments to legislators for their help in securing legislation. The sting operation was carried out with the undercover help of a legislative committee consultant, John Shahabian.


Shahabian’s attorney, Donald Heller, told The Times last week that the fictitious companies gave legislators campaign contributions and paid fees for speeches that were never given. Heller called the speaking fees “a scam . . . a guise to give money to a legislator for personal use.”

Most of the area’s 15 state legislators report some income from speech-making every year, but the amounts seldom exceed $5,000. And aside from Montoya, Hill and Nolan, only Sen. William Campbell (R-Hacienda Heights), who has a reputation as an entertaining and witty speaker, and Sen. Art Torres (D-Los Angeles), who is chairman of the Senate Toxics and Public Safety Management Committee, earn large sums from speaking engagements. Campbell received $45,000 and Torres more than $28,000 for speeches in the past two years.

Montoya has vigorously defended his acceptance of honorariums even though the payments are often made by companies or trade groups with a keen interest in legislation before Montoya’s committee.

‘Supplemental Income’


In a 1985 interview, Montoya said he gives paid speeches because he is “not a lawyer, and I don’t have an insurance company on the side. All I do is legislative stuff, and I find it (honorariums) an attractive supplemental income which I would not turn down in any circumstance.”

Montoya has conceded that he is not a particularly good speaker but says he receives many invitations because of his knowledge and his sympathetic attitude toward business.

“I may not be as witty as Bill Campbell or as intelligent as Willie Brown, but I am more relevant” on the issues he is invited to discuss, Montoya said in a 1987 interview.

Last year, Montoya received fees ranging from $250 for speaking at a breakfast of the Sacramento chapter of the Internation Assn. for Financial Planning to $2,500 for speaking at a dinner for Mediscript Inc., a Chatsworth pharmaceutical company. He later received an additional $1,000 from the drug company for touring its plant.


The Assn. of Physical Fitness Centers paid Montoya $2,500 to speak to its California chapter in November, 1986, in Los Angeles and another $2,500 to speak to its national meeting in Dallas five months later.

Jim Johnson, president of the group, which represents 550 health clubs nationwide, said Montoya was invited because he had written a bill regulating health clubs and both Montoya’s bill and a rival measure would have to pass through the senator’s committee. Most of the association’s members are opposed to Montoya’s bill, Johnson said.

Johnson said the fee paid to Montoya was in line with fees paid other speakers and did not influence Montoya’s position on health club legislation. In fact, he said, Montoya’s speech at the Dallas meeting caused an uproar because it was at odds with the views of many of the group’s members.

Traveled Widely


In addition to supplementing his income with speeches, Montoya has traveled widely at the expense of private companies, foundations, trade associations, educational institutions and others. Last year alone, he received expense-paid trips to Guadalajara in January, Europe in May, London in August, and Taiwan, Hong Kong and Korea in October and November.

Montoya is one of three legislators who drafted Proposition 73, a political reform initiative that will place limits on campaign contributions and on honorariums starting in January. The measure, which was approved by voters in June, will prohibit legislators from accepting more than $1,000 in speech fees and gifts annually from a single source but will allow unlimited reimbursements for travel expenses.

Hill and Nolan also traveled abroad last year. Pacific Telesis Group paid more than $9,100 to send Hill and his wife to London and Paris. Hill said the one-week tour gave him a chance to look at communications systems. Nolan went to Japan and the Netherlands at the expense of business, political and trade groups in those countries.

In his financial disclosure statement for 1987, Hill reported more than $20,000 in income for 16 speeches. He earned $8,500 on three consecutive days last December when he was paid $5,000 by G-Tech Corp., which provides equipment and services to the state lottery; $2,500 by Sunrise Co., a land developer in Palm Desert, and $1,000 by Super Shuttle International of Los Angeles, which operates an airport shuttle service.


In 1986, G-Tech Corp. paid Hill $1,500 for a speech and $3,170 for a trip to Massachusetts, and the Sunrise Co. paid him $1,000 for a speech and provided $200 worth of lodging.

Wagering Businesses

Hill is vice chairman of the Governmental Organization Committee, which has jurisdiction over businesses that involve wagering. Among the payments he reported for speeches over the past two years were $3,000 from Quarter Horse Racing Inc. and $2,200 from the Huntington Park Casino. He also received $1,500 from the Howard Stein Dental Clinic in West Covina, $2,200 from the National Waterbed Retailers Assn. in Chicago and $2,500 from the California Beer and Wine Wholesalers Assn.

Nolan earned most of his speech income in 1986, when he gained $19,000 from 20 presentations, ranging from a speech at a convention of osteopathic physicians and surgeons to participation in a seminar at General Electric Co.


In addition to their success in obtaining honorariums and gifts, Montoya, Nolan and Hill have been remarkably effective in raising campaign funds. In just the first half of this year, Nolan raised more than $600,000; Hill raised more than $150,000, and Montoya, even though he does not face election this year, raised more than $180,000.

Nolan, 38, has represented the Glendale and Pasadena areas in the state Assembly since 1978 and has been Republican leader since 1984. Hill, 34, who lives in Whittier and represents a district that includes Diamond Bar, Hacienda Heights, Rowland Heights, Walnut and part of West Covina, was elected to the Assembly in 1982. Montoya, 48, who also lives in Whittier, serves a district that stretches from Monterey Park east to La Puente. He was elected to the Assembly in 1972 and moved up to the Senate six years later.