Attorney General Probing Chacon’s Receipt of $7,500 From Check-Cashing Trade Group

The state attorney general’s office has launched an inquiry into Assemblyman Peter Chacon’s receipt last year of $7,500 from the California Check Cashers Assn., which opposed legislation he was carrying to regulate the industry’s charges, a top Justice Department official confirmed Wednesday.

Nelson P. Kempsky, chief deputy attorney general, said the office has been reviewing the case for about three weeks in what he called a “preliminary inquiry,” which could lead to a full-blown investigation.

“We are taking a look at this to see if anything improper occurred,” Kempsky said. “We are going to look at the reports filed with the Fair Political Practices Commission and other reporting agencies, interview the people who gave the money and the assemblyman, and see what we have.”

The probe could “bloom into a broader and deeper investigation” or it could be dropped, he said.

Kempsky said the attorney general’s findings will be forwarded to the district attorneys in San Diego and Sacramento counties, who will decide whether prosecution is warranted.

Chacon, a Democrat from San Diego, reported receiving the money on his annual statement of economic interests filed March 1 with the FPPC. He has said he took the money as compensation for touring several check-cashing stores in Los Angeles and then meeting with the group’s board of directors. Chacon could not be reached for comment Wednesday.

Chacon Said Timing Was Coincidence

Chacon reported that he received $4,000 from the trade group on April 14, 1988, the same day the bill was shelved, with Chacon’s acquiescence, by the Assembly Finance and Insurance Committee. Chacon has said the timing was a coincidence. He received another $3,500 from the group in July, 1988.

Tom Nix Jr., president of the check-cashers’ group, said the association paid Chacon “to show our thanks” for the assemblyman’s spending time learning about the industry. He said the bill, as it was introduced by Chacon, could have put many of the association’s 300 members out of business.

There is no law prohibiting state lawmakers from receiving money from a trade group supporting or opposing their legislation, Kempsky said. But the parties could be prosecuted if they agreed to exchange the money for some sort of legislative action, he added.

“Whether there was wrongdoing in this case depends on the intent and the understanding of the parties,” Kempsky said. “If the money was given with the intent to influence a legislative outcome or vote, or an action such as dropping a bill, there would be evidence of a crime. If it was accepted for that purpose, that would be improper.”

As it was introduced Feb. 18, 1988, Chacon’s bill would have limited the fees the check cashers could charge to 1% on government checks, payroll checks, traveler’s checks, money orders or cashier’s checks. Fees for cashing other checks would have been limited to 1.5%,

Amended Bill

Chacon amended the bill April 11, three days before it was scheduled for a hearing in the Finance and Insurance Committee. The amendments raised the allowable fees to 1.75% and 3%, depending on the kind of check being cashed.

The committee voted, 19-0, to send the bill to an “interim hearing”--a special hearing held between legislative sessions where members hear about a particular issue in detail. But no further hearing on the issue was held, according to Will Brown, a former consultant for the committee.

Brown said he attempted to schedule the hearings several times but Chacon’s office never responded to his phone calls.