First Indictment Due in FBI Capitol Sting

The first indictment of a legislator growing out of a three-year federal investigation of political corruption in the Capitol is expected soon--most likely in the next week or two, several sources familiar with the probe have told The Times.

Almost nine months after FBI agents raided Capitol offices on Aug. 24, scrutiny of one lawmaker, Sen. Joseph B. Montoya (D-Whittier), has become particularly intense, these sources said.

Late last week, a federal grand jury subpoenaed legislative committee records on at least four bills, including two authored by Montoya and two others that went through committees on which he served.

Earlier this month, prosecutors also formally warned a former Montoya aide, Amiel A. Jaramillo, that he was a target of the ongoing federal grand jury investigation, according to Jaramillo’s attorney, Christopher H. Wing. The warning came in a letter inviting Jaramillo to testify voluntarily before the grand jury--a request that Wing declined.

The letter meant that Jaramillo was “somebody who at this stage they (grand jury members) feel they are looking at as a suspect,” Wing said Monday, “but it doesn’t mean ultimately he ends up being indicted.”

Wing said that the fate of Jaramillo, now an attorney in private practice, is tied to that of his former boss. “If Montoya gets hammered, my client will as well,” Wing said.

There are other signs that Montoya has been the subject of much of the grand jury’s attention. A number of present and former Montoya aides have testified before the grand jury in the last several weeks, according to Montoya’s attorney, Michael S. Sands.

Also, in March, prosecutors obtained a warrant to search the offices of a Capitol lobbying firm, Governmental Advocates. Agents were interested in a series of bills either authored by Montoya or which went to the Senate Business and Professions Committee, which he chairs. To obtain the warrant--which allowed investigators to keep the premises secure during a lengthy search--prosecutors first had to convince a federal judge that they were likely to find evidence of violations of racketeering, extortion and conspiracy statutes.

Montoya has repeatedly asserted his innocence of any wrongdoing and referred questions about the investigation to his attorney Sands. Sands said the slowness of the investigation may be because prosecutors are having trouble assembling a case.

U.S. Atty. David F. Levi refused to comment on when or if he would ask the federal grand jury for indictments growing out of the undercover sting operation, called Brispec (for Bribery--Special Interest).

In the sting, FBI agents posing as businessmen sought help from legislators and legislative aides for special-interest bills that would supposedly help them set up a shrimp processing plant near Sacramento.

Since the sting came to light last summer, there has been increasing criticism of Levi by some legislators and defense attorneys. If he has evidence of criminal conduct among legislators, then he should have filed charges long ago, they argue.

There is even some sentiment within the FBI’s Sacramento office that the investigation of possible legislative misconduct has gone on far too long--that Levi had enough evidence to begin taking cases to the grand jury several months ago, according to federal sources.

However, Levi has a reputation as a cautious and painstaking taskmaster, someone willing to withstand the pressure to move ahead until he is satisfied.

‘There Is a Tension’

“In all cases, particularly long-term investigations of this nature, there is a tension between the U.S. attorney’s office and FBI management,” said one U.S. Justice Department official. The U.S. attorney “has a natural hesitancy to indict” until all the evidence is in hand; the FBI “has a natural desire to move on to something else.”

In recent days the internal FBI criticism has subsided, just as the investigation appeared to be quickening.

Montoya was one of four legislators whose offices were raided last August. The others were Assembly members Pat Nolan (R-Glendale), Frank Hill (R-Whittier), and Gwen Moore (D-Los Angeles). State Board of Equalization member Paul Carpenter, a former Democratic senator from Cypress, has also been identified as a target of the federal investigation.

Montoya has been the subject of the latest flurry of FBI activity. Last week, agents delivered grand jury subpoenas in the Capitol requesting records of at least four different bills, each with some connection to the Whittier Democrat:

- A 1981 special-interest bill, authored by Montoya, exempting the proposed Bell Mar land development in the Malibu area from review under the state Coastal Act.

- A 1987 measure by Assemblyman Patrick Johnston (D-Stockton) that changed the rules governing personnel agencies, exempting certain job-listing services from state licensing. The bill was approved by the Senate Business and Professions Committee, which is chaired by Montoya.

- A 1988 bill by Montoya that would have given authority over local recycling programs to the California Waste Management Board, rather than the Department of Conservation, which oversees implementation of the state bottle recycling program. The bill, which was opposed by conservation groups, was defeated.

- A 1986 bill carried by Sen. Ralph C. Dills (D-Gardena) for the Recording Industry Assn. of America, which affected the terms of individual recording contracts. Montoya served on the Senate Industrial Relations Committee and voted to approve the measure, which was vetoed by the governor.

Only two indictments have been filed so far as a result of the corruption probe. Both are spin-offs of the sting and not directly related to it. In January, the grand jury charged Yolo County Sheriff Rod Graham with extortion, bribery and conspiracy in collecting $3,650 in campaign contributions from an FBI informant who was cooperating in the Capitol corruption probe. Graham’s former top deputy, Wendell Luttrull, has pleaded guilty to extortion charges.