Associates of Brown Say FBI Sting Aimed to Snare Speaker

A dummy company set up by the FBI slipped $1,000 in cash under the door of an aide to Assembly Speaker Willie Brown, but she promptly returned the money because it is illegal to accept cash contributions, the Speaker said Thursday.

The attempted donation took place two years ago but Brown said he did not learn about it until Wednesday. The “company,” Gulf Shrimp Fisheries Inc., replaced the cash donation with a $1,000 cashier’s check.

“Can you imagine stuffing 10 $100 bills under someone’s door?” Brown said in an interview with three television stations. “She didn’t think anything about it. (She thought:) ‘That’s just a mistake by people who want to donate. They may not know what the rules are.’ ”

Brown accepted $11,500 in campaign contributions from the FBI’s phony firms, including the $1,000 check from Gulf Shrimp.

Associates of the Speaker contend that the ongoing FBI investigation into political corruption in the Legislature was aimed at the powerful San Francisco Democrat.

But instead of ensnaring Brown, the elaborate sting so far has embroiled five other elected officials, including two of the Speaker’s Republican adversaries.

“This was a setup . . . to get Willie,” one ally of the Speaker said. “People who were never supposed to go for it fell into the trap.”

Brown accepted contributions from Gulf Shrimp and Peach State Capitol Investment, two FBI dummy firms, while legislation that would have benefited the “companies” was moving through the Legislature.

Federal officials declined to discuss the charge that the investigation was set up to snare Brown. However, one source close to the investigation said the Speaker is not now a central subject of the probe. Brown’s office was not among those searched by FBI agents during raids at the Capitol last week.

Assembly Republican Leader Pat Nolan of Glendale, Assemblyman Frank Hill (R-Whittier), Assemblywoman Gwen Moore (D-Los Angeles), Sen. Joseph B. Montoya (D-Whittier) and state Board of Equalization member Paul Carpenter, a former Democratic senator from Cypress, are among those under investigation, federal sources have said.

Montoya played a key role in the passage of one bill sponsored by Peach State in May at about the same time he received, according to a newspaper, a $3,000 honorarium from Peach State.

Terry Miller, a consultant to the Senate Banking and Commerce Committee, said Thursday that Montoya provided the sixth and crucial vote needed to win committee approval of the legislation in June. The San Gabriel Valley Tribune reported that Montoya received a $3,000 honorarium earlier this year from Peach State. Montoya says he will neither confirm or deny receiving the money.

Brown’s associates contend that the Democratic Speaker was the intended target of the investigation.

Governor Tipped Off

And they point out that while legislators were targeted in the sting, Republican Gov. George Deukmejian was tipped off by the FBI in 1986 so he would veto a bill sponsored by one of the dummy companies.

Brown’s contributions from the FBI firms included $4,000 from Peach State he received in May and $1,000 he accepted from Gulf Shrimp in 1986. He also received $6,500 that originated with Gulf Shrimp but was funneled through Northern California Research Associates.

Meanwhile, Darryl Freeman, who helped funnel the $6,500 to the Speaker through Northern California Research, said he never told Brown that the money actually had come from Gulf Shrimp.

“We never conveyed that,” said Freeman, who was hired by the “company” to lobby its bill. “We were doing it on our own behalf, trying to enhance our exposure, our own visibility. We never told Willie, we never interfaced with him. We simply bought tickets at a bash (fund-raiser) and there were 1,000 people there.”

Freeman contends he did not know he was participating in the sting.

Peter Lauwerys, director of Northern California Research, said he received two checks through Freeman from Gulf Shrimp totaling $35,000.

Of that money, he said he paid $8,600 in consulting fees, campaign contributions and loans to Tyrone Netters, an aide to Assemblywoman Moore and also a target of the probe.

Lauwerys, who said he had no idea that Gulf Shrimp was a bogus company, criticized the FBI for dragging his firm into the sting operation.

“Boy, I’m going to be mad if my reputation is besmirched,” he said. “We are an innocent victim.”

Also contributing to this story were Times staff writers Paul Jacobs, Ralph Frammolino and Mark Gladstone.