Probe Targets Cashed In on Honorariums

Four legislators who are prominent targets of the FBI’s investigation into political corruption have received thousands of dollars in personal income from businesses seeking to influence the course of legislation in the state Capitol, public records show.

The four lawmakers, who all are in a position to help decide the fate of certain bills, reported receiving a total of $161,474 in honorariums from special-interest groups during 1986 and 1987. In many cases, the legislators sponsored bills that would have directly affected the groups that gave them money.

The practice of accepting lucrative speaking fees--sometimes without making speeches--is widespread in the Legislature and may have left some members vulnerable to an elaborate sting operation mounted by the FBI. During the 3-year investigation, undercover agents offered to pay lawmakers sizable honorariums in exchange for their votes.

“We’re all on the borderline of being felons (because) there are votes being switched for money,” said Sen. Joseph B. Montoya (D-Whittier) in a discussion last April about fund raising in the Legislature. “If we’re not there, we’re on the verge of it.”

Now, Montoya is under investigation for accepting a $3,000 honorarium earlier this year from a bogus FBI company that was pushing a bill to help finance expansion of its fictitious shrimp business.

Also targeted in the inquiry are Assemblywoman Gwen Moore (D-Los Angeles), who carried two bills for the FBI’s phony firms, Assemblyman Frank Hill (R-Whittier) and Assembly Republican Leader Pat Nolan of Glendale.

Since the sting became public last month, the FBI has broadened its investigation to include other reports of lawmakers seeking or accepting honorariums in return for favorable legislative action.

Federal agents are examining allegations that an aide to Montoya solicited an honorarium of at least $500 in exchange for the senator’s help in killing a 1986 bill aimed at regulating employment agencies.

In addition, the FBI is looking into whether the author of the employment agency bill, Assemblyman Mike Roos (D-Los Angeles), acted improperly when he accepted a $2,500 honorarium from the organization sponsoring the measure.

During the FBI sting, undercover agents spread thousands of dollars in honorariums and campaign contributions among lawmakers and their aides. To many legislators, honorariums are more desirable than campaign donations because they can deposit the speaking fees directly into their personal bank accounts and spend the money without restrictions.

At least two legislators accepted honorariums from the FBI’s dummy companies: Hill received a payment in the “ballpark” of $2,500 and Montoya took the $3,000 honorarium, according to sources close to the investigation.

Hill and Montoya, who both voted for the FBI’s shrimp legislation, did not deliver speeches in exchange for their fees, sources familiar with the investigation said, noting that there was no group for them to speak to.

Nolan has reported accepting $10,000 in campaign contributions from one bogus FBI corporation while Moore received $5,500 in campaign donations supplied by federal agents.

Financial Reports Due

It is not known whether the four targets of the FBI sting accepted other honorariums from the FBI’s phony firms. The personal financial statements that legislators are required to file for 1988 are not due until next March. Similarly, campaign donation reports covering the period after June 30 will not be filed until October.

During 1987, the 120 members of the Legislature supplemented their pay with a total of $722,000 in honorariums, most from groups with an interest in legislation. Assembly Speaker Willie Brown (D-San Francisco), who receives the same $37,105 annual salary as the other lawmakers, led the pack with $161,000 in honorariums last year.

None of the legislators under investigation by the FBI would discuss the thousands of dollars in honorariums they have received from a wide range of business interests since 1986, the year the undercover operation began.

Montoya accepted $80,879 in honorariums during 1986 and 1987--substantially more than any of the other lawmakers who are subjects of the FBI investigation. As chairman of the Senate Business and Professions Committee, Montoya has received speaking fees from a variety of industry groups while supporting their interests in the Legislature, records show.

Last March, Montoya was paid $1,000 to address the annual convention of the Osteopathic Physicians and Surgeons of California in Anaheim. At the same time, a bill Montoya was carrying on behalf of the medical group was awaiting action in his committee.

‘A Pretty Good Job’

“We invited him to the convention to speak because he has been championing the osteopathic medical profession’s cause,” said Matt Weyuker, executive director of the organization. “And he has been doing a pretty good job of it.”

The measure was unanimously approved May 3 by Montoya’s committee, sailed through the Senate and Assembly and was signed into law last month by Gov. George Deukmejian. The bill prohibits health maintenance organizations from discriminating against osteopaths when filling medical positions.

The Osteopathic Physicians and Surgeons of California also paid $500 to Montoya in honorariums at its annual convention two years ago. Weyuker said he doubts that the speaking fees motivated Montoya to carry several bills on behalf of the doctors’ group. But he added that his organization plays by the “rules of the game” in Sacramento by spreading contributions and honorariums among legislators who support the cause of the osteopaths.

“We know how the legislative political process works,” Weyuker said. “When you find someone who will take up your cause, by golly, you use him. . . . It’s a situation that has been going on up here for years and years, and everybody more or less gets in line and does it, regardless of the rightness or wrongness to it.”

During the last legislative session, other special interest groups have paid honorariums to Montoya while their bills were either pending or about to come before the senator’s committee, records show. These include the American University of the Caribbean ($2,500); the Assn. of Physical Fitness Centers of Rockville, Md. ($2,500); Telephone Auction Inc. of San Jose ($2,000); Medco Containment Services of Columbus, Ohio, ($2,000); Affiliated Podiatrists of California ($1,500), and Mediscript Inc. of Chatsworth ($1,000).

Checking Allegation

The FBI is looking into one allegation that Amiel Jaramillo, an aide to Montoya, solicited an honorarium for Montoya from individuals seeking the senator’s help in killing Roos’ employment agency bill.

Bess Feil, the owner of a Sacramento employment agency, said Jaramillo raised the subject of an honorarium at a meeting in 1986. “He said if I expected the senator to listen to my plight and be favorable to my cause, it would be a good idea to make some honorariums,” Feil recalled. “He said that if he were I, he wouldn’t give any less than $500 and more would be better.

“I refused it and walked out.”

Jaramillo could not be reached for comment but his attorney, Christopher H. Wing, said Jaramillo was explaining to Feil and others how to go about defeating the bill.

“I think the purpose of the meeting was to explain what the political system was, how to write the letters, who to address them to, how to get their position known,” Wing said.

Jaramillo has been asked to appear before a federal grand jury hearing testimony on political corruption, his attorney said.

Since the controversy over the employment agency bill surfaced, the FBI’s investigation into political corruption has expanded to include, among other things, at least one honorarium Roos received from supporters of the bill. But federal sources said Roos still is not a primary target of its investigation.

Paid for Speaking

Roos was paid $2,500 to speak before the California Assn. of Personnel Consultants after the bill passed the Assembly in 1986. During the next two years, he received at least another $5,000 in honorariums from the group, records show.

Roos also received a $2,000 honorarium in 1986 from another supporter of the bill, California Executive Recruiters Assn. Roos appeared at a cocktail reception held by the group but did not deliver a speech, said Robert J. Achermann, the group’s lobbyist.

The Los Angeles Democrat has defended his acceptance of the money, saying that at the time he introduced the bill he received an opinion from Legislative Counsel Bion Gregory advising him that there would be no conflict of interest in taking the honorarium and carrying the bill.

Three of the lawmakers named in the FBI investigation--Montoya, Hill and Moore--have been paid thousands of dollars over the last several years by the California Cable Television Assn. to attend their briefings.

Twice a year, the association has invited as many as a dozen legislators to an industrywide convention where they learned about the latest technology and talked with cable operators from their districts. None of the lawmakers gave a speech, but each one received a check for $750.

Dennis Mangers, a former assemblyman and now a lobbyist for the Cable Television Assn., said the payment gives the legislators a “more positive attitude” toward the sometimes tedious sessions.

Both Sides Learn

“We make sure the legislator does something commensurate with the honorarium given,” he said. “In our case, they really do learn about our industry and we learn from them.”

Mangers said the association invites legislators who play a key role in deciding the fate of bills important to the industry.

Moore attended four sessions during 1986 and 1987, receiving a total of $3,000 from the group. Mangers said Moore was invited because she is the chairwoman of the Assembly Utilities and Commerce Committee, which hears most bills affecting the cable industry. During the two-year period, Moore also carried at least eight pieces of legislation that were of particular interest to the cable operators, according to reports filed by the association.

Montoya attended three sessions in 1986 and 1987 and collected $2,250. He is chairman of a Senate Subcommittee on Cable Television and carried one bill of concern to the cable industry.

Similarly, Hill attended four of the cable group’s sessions over the last 2 1/2 years and collected a total of $3,000, reports show. At the same time, the utilities committee member carried two bills at the request of the Cable Television Assn. that were designed to prevent a tax increase of as much as $85 million annually on cable operations.

Part of Outside Income

For Hill, the cable television money was a small part of the outside income he received in 1986 and 1987.

The conservative Republican reported receiving $41,725 in honorariums from a variety of business interests, including two payments totaling $6,500 from G-Tech, a firm that supplies millions of dollars in equipment to the state lottery.

He also accepted $3,000 from Quarter Horse Racing Inc.; $2,500 from the California Beer & Wine Wholesalers Assn.; $2,500 from Sunrise Co.; $2,200 from Huntington Park Casino, and $2,200 from the National Waterbed Retailers Assn.

In addition to the honorariums, Hill and his wife took a $9,168 trip to London and Paris at the expense of Pacific Telesis Group. Accompanying the Hills on the European trip last September were Assemblywoman Moore and her husband at a cost of nearly $5,000 each, according to a report filed by the company.

Each year, Pacific Telesis reports having an interest in dozens of bills before the utilities committee.

The trip to Paris and London was a “study tour” of phone systems there, said Amy Damianakes, a Pacific Telesis spokeswoman. She said Moore and Hill were among those invited because of their roles on the Assembly Utilities and Commerce Committee.

‘We Have a Responsibility’

“We need to have relationships with people that are setting policies that influence our company,” Damianakes said. “We have a responsibility to keep them educated on important issues.”

For the most part, Moore’s honorariums in 1986 and 1987 came from businesses that lobbied for many bills before her committee. The companies also reported having a particular interest in dozens of bills that Moore carried personally.

In all, the assemblywoman received $16,000 in honorariums during the two-year period. In addition to the $3,000 in honorariums she accepted from the Cable Television Assn., Moore received $3,000 apiece from Pacific Telesis, California Trucking Assn. and General Telephone of California. She also was paid $1,500 by U.S. Sprint.

Spokesmen for the various businesses that gave Moore money said she was invited to speak to their groups because of her position as chairwoman of the utilities committee.

General Telephone paid her a $1,000 honorarium last December simply to meet with the company’s president and the top two dozen officers of the corporation for less than 30 minutes.

“We feel that we get good value by understanding what she is trying to accomplish and enlightening her in areas where she might not be totally knowledgeable,” explained Tom Leweck, a spokesman for General Telephone.

Moore did not accept any honorariums from the five known “companies” set up by the FBI, said her attorney, Philip Scott Ryan. While Moore declined to discuss the honorariums she received, Ryan defended her acceptance of the money.

“Gwen Moore’s record reflects that she frequently and consistently votes against the people who provide honoraria,” Ryan said. “There is a consistent pattern of Gwen Moore supporting the consumer side of issues.”

Key Political Figure

Assemblyman Nolan, the Republican leader in the Assembly, received a total of $22,850 in honorariums during 1986 and 1987. His press secretary, Anne Richards, said Nolan did not accept any honorariums from the five “companies” set up by the FBI in the sting.

As GOP leader, Nolan can play a key role in deciding the fate of bills on the Assembly floor, particularly spending or urgency measures that require a two-thirds vote and thus need Republican support.

Among the groups that gave Nolan $1,000 each in honorariums were the California Correctional Peace Officers Assn.; the Osteopathic Physicians and Surgeons of California; Nationwide Insurance; the California Retailers Assn.; Dow Chemical, and Security Pacific Corp.

Nolan is considered such a key political figure by the Doctors’ Management Co., a Santa Monica-based medical insurance carrier, that the firm paid him $2,000 to address insurance executives in 1986. The group has lobbied to reduce malpractice insurance rates by limiting the size of jury awards in lawsuits.

“We found that Pat (Nolan) and the Republicans were voting our way,” said Charles O’Brien, the chief counsel for Doctors’ Management. “I disagree with Pat on all social issues . . . (but) he’s been very helpful to us. That is the litmus test for us. That is how we came to support Pat.”

Contributing to this story were Times staff writers Paul Jacobs, Mark Gladstone and Dan Morain and Times researcher Patti Cole.