Widening their investigation of state Sen. Joseph B. Montoya (D-Whittier), federal agents armed with a warrant searched the offices of a politically well-connected lobbying firm, the owner of the firm confirmed Thursday.
The investigators--five from the FBI and one from the Internal Revenue Service--searched the files of Governmental Advocates Inc. for more than four hours on Wednesday. The agents were seeking evidence of possible violations of federal extortion, racketeering and conspiracy laws, according to the search warrant, which listed a series of special-interest bills that either had been authored by Montoya or had moved through the Senate committee he chairs.
Firm’s Clients Affected
Several of the measures affected clients of Governmental Advocates lobbyist Jerry Zanelli and the firm’s owner, Hedy Govenar. Zanelli, a longtime friend of Montoya, is the former chief executive officer of the Senate. He has strong ties to top Democratic legislative leaders, including Senate President Pro Tem David A. Roberti of Los Angeles.
There was no indication that either Zanelli or Govenar is a target of the FBI’s investigation.
However, several sources familiar with the federal investigation said Montoya is one of the principal subjects of the three-year inquiry into political corruption in the Capitol called Brispec (for Bribery--Special Interest). The investigation came to light last August when FBI agents raided the offices of Montoya, three other legislators and two legislative aides.
No state official has been charged with a crime, but in recent weeks federal authorities have stepped up their investigation of Montoya and some others, subpoenaing financial records and other documents and interviewing lobbyists and legislative staff, according to sources. The same sources said they expect the first indictment of a legislator to come in the next several weeks, but they cautioned that public corruption cases are often slowed by unanticipated delays.
Montoya’s attorney, Michael S. Sands, said he was unaware of the search “and at this time I have no comment.”
This week, U.S. Atty. David F. Levi, who heads the investigation, went to federal district court to obtain a warrant to search the files of Zanelli and Govenar, whose office is located across the street from the Capitol. Levi would not comment on the search warrant, which was ordered sealed by the court.
But Govenar, angry at any suggestion that she might be involved in any improper activity, described the document in detail to a Times reporter.
Both she and Zanelli were interviewed by the federal investigators during the search.
“Most of the conversation seemed to be centered on honorariums and campaign contributions,” said Zanelli, who cut off the FBI interview for a previously scheduled flight to Los Angeles. He said that he expects to be interviewed again.
Govenar said she was initially happy to cooperate with the FBI, but became especially angry with federal authorities when she discovered that two FBI agents, posing as students wanting to know how to become lobbyists, had scouted her office a week before the search.
“They told us they were students and they were very, very pushy,” Govenar said. The agents were able to come up with a detailed description of the office needed for the search warrant.
Govenar said that during the search she voluntarily opened the firm’s files, allowing investigators to take whatever they wanted to, even before she was served with the court order requiring her to do so. She said that she did not want to accept the warrant: “It makes it look like I was uncooperative, like I have something to hide, but they said they had no choice (but to serve the warrant).”
The investigators carted off financial records dating back to 1979, as well as documents on specific bills backed or opposed by the firm’s clients, Govenar said.
Focus on 8 Bills
The warrant zeroed in on eight bills that Montoya authored or that were approved by the Senate Business and Professions Committee, which he chairs.
For example, investigators sought records on a 1985 bill that Montoya carried for the California Assn. for Financial Planning. The measure, which would license financial planners, was hotly opposed by a number of other interest groups, including the Investment Company Institute of Washington. The institute, representing mutual funds and investment advisers, hired Governmental Advocates to lobby their position. The measure passed but was vetoed.
Montoya has also carried legislation that would allow the state Board of Dental Examiners to regulate the use of so-called “conscious sedation"--drugs used to put dental patients into “twilight sleep.” The 1987 measure was backed by the California Assn. of Nurse Anesthetists, another client of Governmental Advocates.
Federal investigators also seized the firm’s files on Marina Lessees Assn., a group backing a 1985 Montoya bill that helped block efforts to incorporate Marina del Rey as a city.
Additionally, the warrant sought records on bills that affected other Governmental Advocates clients, including three measures involving payments paid to employment agencies by job applicants and a bill that would exempt some agencies from licensing fees.
The investigators also sought information about a 1981 Montoya bill to exempt a Malibu property owned by a Honolulu bank from restrictions under the California Coastal Act. The measure, which was proposed before Zanelli was hired by Govenar’s firm, was introduced to get the attention of the California Coastal Commission, which was reluctant to negotiate a proposed development plan, Govenar said.
Montoya last year apparently was caught up in an elaborate FBI sting operation when he took a $3,000 honorarium from Peachstate Capitol West, a bogus company set up by agents. The day after receiving the payment, Montoya voted for a Peachstate bill that supposedly would have helped the “company” build a shrimp processing plant in West Sacramento. However, the investigation of Montoya has gone far beyond his involvement in this one sting bill.
Govenar, who became a full-time lobbyist in 1979, said her firm was not one of the biggest in the capital. The firm reported receiving a total of $360,000 in revenues last year.
Times staff writers Jerry Gillam and Daniel M. Weintraub contributed to this story.