U.S. Memo Says Montoya Demanded ‘Fees’ for Votes

Sen. Joseph M. Montoya (D-Whittier) repeatedly and systematically demanded “fees for service”--campaign contributions and honorariums--in exchange for his support of special-interest legislation, federal prosecutors charge in a document filed Wednesday in U.S. District Court.

The memorandum, prepared for Montoya’s Dec. 4 trial on extortion, bribery and racketeering charges, describes one instance after another of the lawmaker’s alleged use of his office for personal gain and contends that Montoya himself told a government witness that he “wanted to be a millionaire and was looking for every way he could to accomplish that goal.”

The document contends that Montoya had a pattern of pressuring those seeking his support for money and voting against those who would not comply.

Montoya, who has pleaded innocent to the charges against him, had not seen the court document Wednesday and would not comment on its contents.

Said Michael Duffy, an aide to Montoya: “Apparently the government felt obliged to share this information with the news media before giving the senator’s attorneys an opportunity to review it. . . . It is my understanding that Sen. Montoya’s attorneys have reviewed over 1,000 pages of reports about the prosecution’s case and they believe it is based substantially on inadmissible hearsay and false innuendo.”

The 90-page document filed by U.S. Atty. David F. Levi lays out the government’s case against the 50-year-old lawmaker in considerable detail. The memo includes excerpts from transcripts of secretly taped conversations made as part of an elaborate FBI sting operation, called Brispec (for Bribery--special interest), which was set up to investigate political corruption in state government.

In 1988, FBI agents posing as businessmen were seeking support for a special-interest bill that supposedly would help them set up a shrimp processing plant near Sacramento. When John Shahabian, a legislative aide who was caught up in the sting, approached Montoya for his support of the measure, Montoya asked whether the businessmen could be “helpful,” according to the transcript excerpts.

“What is the uh, how can we be helpful to you?” Shahabian asked.

“Either way, contributions and/or honorariums,” Montoya responded.

Later the two agreed that Montoya would have a breakfast meeting with “George Miller,” president of the FBI’s bogus firm, Peachstate Capital. Shahabian and Montoya discussed an appropriate payment.

“Let’s do three (thousand),” Montoya is quoted as saying. “You don’t want to appear ridiculous. You know, it’s nice to get help, but you don’t want to appear ridiculous.”

At the June 29, 1988, breakfast, Miller--in reality, FBI agent George Murray--presented Montoya with a check for $3,000. After joking about the amount of the check, “Miller” and Shahabian talked about what would happen if the Peachstate bill should run into trouble at its scheduled Senate vote the next day.

“I’ll be there,” Montoya assured them.

“We can count on Joe,” Shahabian said.

The trial memorandum also describes the government’s case against Montoya on other charges.

In 1985 and 1986, for example, Montoya was approached by professional sports agent Michael Trope, who sought Montoya’s help for legislation that would benefit sports agents in disputes with their client-athletes.

According to the trial memo, Montoya “went so far as to send Trope a ‘schedule of fees,’ totaling $10,000--$5,000 in campaign contributions and $5,000 in honorariums.

“It was clear to Trope that the ‘schedule of fees’ was Montoya’s fee for the legislative work he was doing on behalf of Trope,” the document states.

When confronted by a key opponent of the sports agent bill--David Meggysey of the National Football League Players’ Assn.-- Montoya told the players’ representative that the union would have to contribute to gain his support, the document charges.

In another example, insurance executive Douglas Ruedlinger asked for Montoya’s support for legislation that would require high schools to provide catastrophic health insurance for student-athletes--insurance that was available at the time only through Ruedlinger’s company.

In a 1985 conversation, “Montoya let the businessman know that he expected ‘speaking fees’ and other payments in connection with anything he might do on the possible legislation,” according to the prosecutors’ memorandum.

Later, Montoya aide Kathleen Somerton told the insurance executive that he “could expect to pay some $10,000 in fees and costs.”

Ruedlinger became uncomfortable with what the prosecutors described as a “fee for service” arrangement and “wrote a stinging letter to Somerton informing her that he was not prepared to spend monies in this way and would not trouble Sen. Montoya further.”

The next spring, in May, 1986, Montoya wrote a letter to high school principals throughout California urging them not to insure athletes through Ruedlinger’s company, the document alleges.

In 1985, Gene Livingston, a Sacramento lobbyist for foreign medical schools, asked two of Montoya’s aides for help in gaining the lawmaker’s support for legislation that would make it easier for foreign medical school graduates to be licensed in California.

According to the prosecution memo, the aides--Karen Frick and Steve English--were told by Montoya: “Yes, but it’s going to cost them $5,000.”

When the California Independent Producers Assn., an organization representing small energy firms, wanted Montoya’s help with proposed legislation, the group’s lobbyist advised them to contribute to the senator’s political campaign.

The lobbyist, Robert Cline, a former assemblyman from Los Angeles, indicated to the association’s executive vice president, Thomas Hunt, that Montoya had a poor reputation and used “the nickname he had coined, ‘El Bandito’--the Bandit,” the memo states. The group agreed to make a contribution through its political action committee.

After Montoya voted for the bill in committee, in August, 1987, “he came looking for his reward,” the prosecutors charge. Montoya allegedly asked Hunt and Cline “whether they had taken care of him as promised. Cline turned to Hunt when Montoya left and remarked, ‘El Bandito.’ ”

The prosecutors contend that Montoya continued to pursue contributions and honorariums over the years and that in 1988 he “aggressively pursued an honorarium” from the Allan Co., a recycling firm in his district.

Montoya insisted on the company’s paying for a visit to its office in Baldwin Park. The prosecutors charge that Montoya deposited a $350 payment from the company for his air fare into the account of HMM Realty, a business that the senator controlled. Montoya failed to disclose that payment on his annual statement of economic interest as required by state law, the court document contends.

Later, Montoya “pestered” the company’s Sacramento lobbyist--former state Sen. Dennis Carpenter--to set up an event for which Montoya could receive a fee. The prosecutors say that Carpenter will testify that the pressure was so intense that “he got the message,” and recommended that his client arrange an invitation for a speech in front of a recycling industry group. But the invitation was withdrawn after Montoya’s office was searched by FBI agents in August, 1988.

The memorandum describes publicly for the first time how officials came to zero in on Montoya for prosecution.

Shahabian, a Senate aide, attempted to extort payments from one of the FBI’s undercover agents in 1986, the memo says. In exchange for leniency, Shahabian agreed to cooperate with the FBI as the sting operation continued. In 1988, Shahabian approached a legislator to discuss a special-interest bill introduced at the request of Peachstate Capital, the FBI’s phony company. Although identified only as “legislator (XX)” in the prosecution memo, the lawmaker appears to be Sen. Alan Robbins (D-Tarzana), who has been identified as a subject of the federal investigation.

In the conversation, secretly recorded by Shahabian, the legislator advised, “Well, you need to make some arrangements with Joe.”

When Shahabian asked what that would require, the legislator said “what it’ll take with Joe is, uh, a little envelope.”

“Five (thousand dollars)? Or less?” Shahabian asked.

“(A)s long as there (is) no big press thing that comes up,” the lawmaker said, “I would say three would be sufficient. Twenty-five hundred’d probably (be) O.K.”

Robbins had no comment on whether he was the lawmaker recorded in the conversation with Shahabian.

The prosecutors contend that Montoya’s pattern of seeking payments was “not a one-man show.”

And they single out Montoya aide Amiel A. Jaramillo, charging that he “put pressure on other aides to raise money from citizens seeking the senator’s help. Jaramillo told them that it was time to start ‘kicking ass.’ ”

Jaramillo has pleaded innocent to four felony counts of extortion and racketeering. He is scheduled to face trial on those charges next March.

On Wednesday, his attorney, Christopher H. Wing, complained that prosecutors were “stretching” the facts to make their case. “It sounds like a far leap to me,” said Wing, who said that Jaramillo was pushing his staff to do their job, not to seek campaign contributions.

NEXT STEP

Sen. Montoya is scheduled to go on trial in U.S. District Court Dec. 4 on 12 felony counts of bribery, extortion, racketeering and money laundering. He is the first political figure to be tried as a result of a three-year federal probe of political corruption in state government. In addition to Montoya, at least four other state elected officials and several of their aides are considered targets of the investigation. In addition, former Yolo County Sheriff Rod Graham has been indicted for extortion and a top deputy has pleaded guilty to related charges.

BREAKFAST WITH MONTOYA

At a breakfast meeting, an undercover FBI agent posing as George Miller, president of a company seeking special-interest legislation, hands Montoya a check for $3,000 calling it “a little something for you.” Then the following exchange takes place between the agent, Montoya and another man who is in on the sting, John Shahabian:

Agent: Well, now the vote comes up, what tomorrow? Scheduled tomorrow.

Shahabian: Oh, yeah, it’s on the floor tomorrow. . . .

Montoya: I’ll be there.

Shahabian: We can count on Joe.

Montoya: You’ll be there to give me some advice if I need it.