FBI Sting Target Was Turned Into Informant

Early last fall, a husky state Senate aide named John Shahabian drove out to the Federal Building a few miles north of the Capitol for a 7 a.m. meeting.

Shahabian thought that he was going to be helping a developer overcome some environmental questions the U.S. Fish and Wildlife Service had raised about a project.

Instead, he was led through a side entrance of the building, past a door bearing the Fish and Wildlife insignia and into a room filled with FBI agents. On the wall behind them were five or six blowups of photographs taken by hidden cameras. One was an aerial photo of his home. Another showed him with an agent posing as a businessman.

This is the account given by sources familiar with the FBI’s Capitol sting operation of how undercover agents turned a shaken Shahabian from a target of their investigation into a valued informant.

Bluff Ploy Worked

In the meeting, the sources say, the agents laid out for Shahabian evidence that they believed could convict him of a felony. There were the pictures showing the lengths to which agents had gone to document their contacts with the Senate insider, and there were even file cabinets (empty, although Shahabian did not know it at the time) that bore labels with his name and the names of others under investigation

Recollections vary on some details. Two sources recall a photo showing Shahabian taking money from one of the undercover agents. Another says he does not recall seeing the money.

Shahabian decided to cooperate.

He had already been working with the “businessmen” for more than a year to win support for special-interest legislation benefiting a bogus shrimp processing company, set up as part of the sting, the sources said.

On Monday, Shahabian said, “I can’t comment on anything having to do with the investigation.”

His attorney, Donald H. Heller, added: “He was approached by the Federal Bureau of Investigation in an extremely professional, matter-of-fact manner and given the opportunity of cooperating in their effort to clean up corruption. They spent a number of hours discussing his conduct, what the purpose of their investigation was, and he made a voluntary choice to cooperate.

“I want to make it very clear, because people are suggesting they put rubber hoses to him, that the FBI and the U.S. attorney’s office acted in the finest tradition of law enforcement,” Heller said.

FBI authorities were prepared to end their sting quickly if the 38-year-old aide had refused to turn informant.

Late-Night Raid

Instead, with Shahabian’s help, they were able to continue the operation until Aug. 24, when the FBI staged its late-night raid of the Capitol to seize documents from the offices of four legislators and two Assembly aides. Shahabian helped the authorities gather tape-recorded evidence of violations of the federal anti-extortion statute, the sources have said.

A team of 30 federal agents, armed with six warrants, moved into the Capitol and searched the offices of Assembly Republican Leader Pat Nolan (R-Glendale), Assemblywoman Gwen Moore (D-Los Angeles), Assemblyman Frank Hill (R-Whittier) and Sen. Joseph B. Montoya (D-Whittier).

Shahabian’s earlier boss, former senator and now state Board of Equalization member Paul Carpenter, is also a subject of the FBI probe.

Files Searched

The files of two legislative staff members--Karin Watson, an aide to Nolan, and Tyrone Netters, an aide to Moore--were also searched.

The warrants permitted the agents to seize any documents connected with two bills by Assemblywoman Moore that would have aided the phony businesses set up by the FBI as part of the sting. The “companies”--Gulf Shrimp Fisheries Inc. of Mobile, Ala., and Peachstate Capital West Ltd.--supposedly wanted to build a shrimp-processing plant in West Sacramento. But to do so, they said they needed legislation that would allow banks to purchase special low-interest bonds to finance the project.

The “companies” funneled more than $64,000 in campaign contributions, honorariums and consulting fees to the legislators and their aides.

Bill Approved

The bills, the first in 1986 and the second in 1988, won overwhelming approval in the Legislature, but were vetoed by Gov. George Deukmejian, who had been tipped off about the sting by the FBI.

While searching Watson’s files, the federal authorities determined that they would need a seventh search warrant in order to seize documents outside the scope of the original court orders.

About 3 a.m., the investigators went to the home of U.S. Magistrate John F. Moulds, who reviewed an affidavit and issued the additional warrant.

Like all the documents associated with the late-night Capitol raid, the seventh warrant has been ordered sealed by Moulds.

However, sources close to the investigation have said that the additional warrant allowed agents to seize documents that might provide corroboration of evidence gathered in the sting operation.