Montoya to Face New State Counts on Campaign Fund

Sen. Joseph B. Montoya, already on trial on federal corruption charges, will face new state allegations that he converted as much as $100,000 in campaign funds to his personal use, state officials said Friday.

Once a verdict is reached in Montoya’s trial in federal court, Atty. Gen. John K. Van de Kamp is expected to file a civil court action against the senator seeking large fines for the alleged misuse of campaign funds, said one state official who asked not to be identified.

The attorney general’s office would not discuss details of the allegations against the Whittier Democrat. But Chief Assistant Atty. Gen. Richard Martland said investigators will focus on allegations of “double-dipping” and personal use of campaign funds that have surfaced in the Montoya trial.

“We’ll be looking into potential state law violations,” Martland said in an interview.

The senator is currently being tried in federal court on 12 counts of extortion, racketeering, bribery and money laundering. But he has not been charged with breaking state laws in connection with his use of public funds or campaign money.

This week, jurors heard extensive testimony that Montoya pocketed air fare reimbursements from the state and spent campaign funds on personal items, including cars, clothes, videos and a life insurance policy.

Defense attorney Michael Sands, however, rejected the notion that the lawmaker violated any state law regarding the use of campaign funds.

“I think it’s utter nonsense, and we’ll have evidence that comes out in the trial that shows that,” Sands said.

Van de Kamp’s office began investigating Montoya’s activities after The Times reported in 1988 that the senator had engaged in real estate purchases involving campaign funds.

But at the request of U.S. Atty. David Levi, who is prosecuting Montoya on the corruption charges, the attorney general agreed to delay action against Montoya until his federal trial ends, possibly late this month, one state official said.

The alleged misuse of as much as $100,000 in campaign funds includes Montoya’s real estate transactions, state air fare reimbursements and personal expenditures with campaign funds, the official said.

Federal prosecutors have presented detailed evidence at Montoya’s trial of his alleged misuse of campaign funds to demonstrate that the senator derived personal benefit from campaign money and had a motive in extorting campaign contributions from people seeking his vote.

Some of the most revealing testimony came from Terry Kaut, a Montoya secretary since 1975, who kept the books for Montoya’s campaign bank account and handled the payment of campaign bills.

She testified that Montoya used campaign funds to pay for airline travel. The senator regularly received reimbursement from the state, but the secretary said he did not pay any money back to his campaign account.

Kaut said she used campaign funds to pay for Montoya’s personal purchases, including a $2,200 Encyclopaedia Britannica set.

In addition, she testified, Montoya loaned campaign money to staff members, campaign supporters and business associates. In some cases, the campaign fund has not received payments of principal or interest on the loans for many years.

One person named by Kaut as a recipient of a campaign loan was Tom Cunningham, whom she identified as a printer who had done work for the campaign. But later, the prosecution called Cunningham, who testified that he specialized in renovating apartments and had received $10,000 from Montoya for their joint purchase of a run-down apartment building in El Cajon. The deal fell through, and Cunningham said he returned the money.

One issue that must be resolved, Martland said, is whether the state Fair Political Practices Commission has jurisdiction over any alleged violations of campaign law, since a statute took effect Jan. 1 transfering some enforcement authority to the agency.

So far, the FPPC has not initiated its own investigation into Montoya, but spokeswoman Sandy Michioku said, “We’re keeping a close watch on the disclosures arising from the trial.”

Last week, Sen. Diane Watson, (D-Los Angeles) agreed to pay a $21,075 civil fine for using her campaign fund to pay for personal travel, a family reunion, a graduation party, clothing and jewelry. In agreeing to pay the fine, Watson did not admit that she violated the law prohibiting use of campaign money for personal use--the same statute that Montoya allegedly violated.