Indictments in FBI’s Capitol Inquiry Likely by End of Year

The FBI is wrapping up its Capitol corruption investigation, and the first indictments are likely before the end of the year--perhaps as soon as late this month, according to sources familiar with the probe.

Stressing the uncertainties of prosecuting cases of corruption by elected officials and the possibility of delays, these sources said that targets will probably be indicted over a period of time rather than all at once and that both legislators and aides will be charged.

“The investigation is not about legislative aides,” said one source, refuting rumors that federal prosecutors might go after “the little fish”--legislative staff members--rather than “the big fish”--elected officials.

Another source noted that it could be years before all the cases are settled because of potential plea bargaining, trial delays and legal appeals.

It has been almost 12 weeks since the FBI’s Aug. 24 raid on the Capitol and the revelation that agents had an elaborate sting operation--called Brispec (for Bribery-Special Interest)--aimed at exposing corrupt legislators.

The delay has been interpreted by those close to the subjects of the probe as a sign that the cases developed in the 2 1/2-year undercover effort may prove to be weak and unlikely to lead to convictions of elected officials.

But this is denied by several sources familiar with the probe.

“I would be surprised if there were not major prosecutions coming out of this case, and not just aides,” said Donald H. Heller, a former assistant U.S. attorney. Now in private practice, Heller has had access to the secretly recorded evidence gathered by his client, John A. Shahabian, a Senate committee consultant who agreed to turn FBI informant in 1987 after being confronted by the FBI with the criminal case they had compiled against him.

Granted Immunity

Shahabian, now on a paid leave, has been granted immunity from prosecution because of his cooperation.

Heller said he had expected charges against others to be filed this month after the election but noted that delays are common in such complicated cases. “They (investigators) are carefully collecting all the evidence from search warrants and following up on leads,” he said.

While no indictments have been issued by the federal grand jury, Brispec has already had an impact on California politics.

One of the first casualties of the FBI sting was Assemblyman Pat Nolan of Glendale, one of the targets of the probe, who was forced to step down Thursday from his post as GOP floor leader.

Nolan was one of four legislators whose offices were searched by the FBI in August. The others are Assemblyman Frank Hill (R-Whittier), one of Nolan’s closest allies, Assemblywoman Gwen Moore (D-Los Angeles) and Sen. Joseph B. Montoya (D-Whittier). Former Democratic Sen. Paul Carpenter, now a member of the State Board of Equalization, has also been identified as a target of the FBI investigation, along with four current or former legislative aides.

Easy Reelections

Nolan, Hill and Moore, none of whom faced serious challenges, were all reelected handily on Tuesday. (Montoya and Carpenter were not on the Nov. 8 ballot.)

But the taint of involvement in the sting became an issue in several legislative races and was a major factor in the defeat of incumbent GOP Assemblyman William P. Duplissea of San Carlos, who was not a subject of the FBI probe but was a Nolan ally. The loss of the Duplissea seat to Democratic challenger Ted Lempert helped topple Nolan from his leadership role.

Since the raid, investigators have been meticulously gathering legislative files, phone logs and financial records needed to buttress charges, and they have been interviewing potential witnesses. The Internal Revenue Service has been conducting a review of its own in connection with the sting, according to sources.

But federal officials have said little about the progress of the probe or its likely outcome.

David F. Levi, the U.S. attorney for the eastern district of California, who will prosecute any cases, has remained tight-lipped. Levi will merely say things like, “I am satisfied with the progress we’re making.”

Others familiar with the probe said that the FBI was “on track” in its effort to complete the investigation of sting-related cases by early this month but that “spin-off” cases--those growing out of tips that followed the Capitol raid--could take many months to check out.

Because federal law generally requires a trial to begin 70 days after the filing of charges, prosecutors must be ready to move ahead quickly once they ask the grand jury for indictments. In practice, however, judges frequently grant delays in complicated white-collar crime cases, and such matters can sometimes drag on for years.

Special-Interest Bills

In the sting operation, FBI agents posing as businessmen sought support for special-interest bills sponsored by Assemblywoman Moore that would help their phony “companies” set up a shrimp processing plant in West Sacramento.

Using video and audio equipment, the investigators recorded sessions in which they offered campaign contributions and direct payments to legislators and their aides, as they tried to win support for the legislation. The two measures--one in 1986 and the other this year--were passed by the Legislature but vetoed by Gov. George Deukmejian, who was tipped about the sting operation by the FBI.