Government Totes Up Its Case Against Montoya : Corruption trial: The prosecution says the senator collected at least $11,950 in extortion payments. The defense will open its case today.

Federal prosecutors, charging that state Sen. Joseph B. Montoya attempted to extort more than $36,350 from people seeking help with legislation, concluded their case Monday against the Whittier Democrat with detailed allegations of financial misconduct.

U.S. Atty. David Levi, in evidence presented over the last five weeks, has charged that Montoya received at least $11,950 in a scheme to extort money from individuals who had an interest in legislative action.

FBI undercover agent George Murray, one of the last witnesses to testify for the prosecution, told the jury he handed Montoya a $3,000 check as payment for the senator’s help in passing legislation to benefit a dummy company set up by the FBI.

And Internal Revenue Service agent Howard Moline, the final witness to testify for the prosecution, told the jury that Montoya diverted as much as $100,000 in campaign funds for his personal benefit, including the purchase of a house in Sacramento.

Montoya’s attorneys will begin their defense of the senator today on 12 counts of extortion, racketeering, bribery and money-laundering. State officials said last week that Montoya also will face a civil action for his alleged misuse of campaign funds.

FBI agent Murray has been an elusive figure ever since he paid Montoya $3,000 at a videotaped breakfast meeting in June, 1988, as part of a federal sting operation.

On Monday, the slim, gray-haired agent told the jury that he posed as George Miller, an Atlanta businessman who was seeking special-interest legislation to help his Georgia shrimp importing company, Peachstate Capital West Ltd., open a processing plant in the Sacramento area.

Murray said he handed Montoya the $3,000 check in an envelope and then joked that he had written the amount incorrectly so that the senator would open the envelope and acknowledge the payment for a hidden camera.

“The only time I ever met with Sen. Montoya was at the restaurant where I paid him $3,000,” Murray said in his soft, Southern accent. “He knew exactly what I was there for--to pay him the $3,000.”

Under cross-examination by defense attorney Michael Sands, the 21-year FBI veteran stuck by his account that the payment was for Montoya’s action to help secure passage of the measure in a Senate committee.

“It was a $3,000 payment for the work on the bill,” the agent said. “My understanding was that he had looked after the bill.”

Agreeing with Sands that the meeting came at a busy time for Montoya in the Capitol, Murray said with a touch of sarcasm: “I was honored that he would take the time to meet with us.”

Sands asked why the undercover agents did not comply with state law and publicly report payments they made to legislators. Murray said that in a sting operation, agents attempt to keep their paper trail to a minimum.

“We stay within the law as closely as we can,” said Murray, who has spent six years in undercover work.

During the course of the sting operation, Murray testified, he also made payments to two other California legislators. Although he did not name the pair, undercover informant John Shahabian testified earlier that Assemblymen Pat Nolan (R-Glendale) and Frank Hill (R-Whittier) received a total of $12,500 in payments. Both remain under investigation.

Murray, who is seen joking on the videotape that he had stayed up late the night before with a woman, told the jury that in fact he was meeting with Karin Watson, an aide to Nolan who also was a subject of the probe. She pleaded guilty in November to one count of extortion and agreed to cooperate with federal investigators.

Personal Spending

After Murray’s testimony, IRS agent Moline told the jury that Montoya had used his campaign funds for a wide range of personal expenditures, including $33,097 in car lease and rental payments, $4,365 in clothing, and $1,433 for such videos as “All the President’s Men” and “The Jagged Edge.” The senator also spent $829 on five investment newsletters, including one called “The Prudent Speculator,” the agent said.

Moline testified that Montoya lent his former top aide, Amiel A. Jaramillo, $7,500 in campaign funds that was later used as a down payment on a house in Sacramento. Listed as owner of the house were Montoya, his wife, Pilar, and Jaramillo, the agent said.

Another $10,000 loan went to Leonard Talbert, the husband of Montoya’s campaign treasurer, Moline said. Talbert later wrote Montoya a check for $6,000 and paid $500 each to Montoya’s wife and a daughter. Other loans included another $12,500 to Jaramillo and $10,000 to San Diego businessman Thomas Cunningham for the acquisition of an apartment building, the agent said.

Moline also testified that Montoya spent $22,052 for air fare and lodging from his campaign funds and then pocketed the reimbursements from the state and private groups. But under cross-examination, he admitted he made several errors in his calculations, reducing the total amount Montoya kept to something in excess of $21,000.

Montoya has not been charged with any violation of state or federal law for his use of campaign funds. But during cross-examination, defense attorney Bruce Kelton repeatedly questioned whether campaign funds expenditures would in fact violate state law governing the use of political money. Car lease payments, investment newsletters, clothing, videos and other purchases could all be legitimate expenses, he suggested.

Moline acknowledged that he was not an expert on the statutes governing such expenditures and that it was possible some of the purchases did not violate state law.

The detailed examination of Montoya’s finances was presented as evidence of Montoya’s motives in seeking campaign funds and honorariums from people affected by his legislative actions.

Prosecutors presented testimony from 29 witnesses alleging that in eight cases, Montoya sought to extort payments from businessmen, actors, football players, a sports agent and, in the case of Murray, an undercover FBI agent.

In one case, Montoya sent out a “schedule of fees” outlining the payment he expected, according to trial testimony. Sometimes, Montoya’s aides delivered the message that the senator wanted as much as $10,000 in campaign contributions and honorariums, free trips and meals.

In cases where Montoya did not receive payment, the government said the senator took revenge, voting against the interests of those who refused to pay money. In one case, testimony showed, Montoya sought to undermine the business of a Florida insurance company by sending out critical letters to potential customers throughout California.

The defense is scheduled to open its case today by calling to the stand state Senate Republican Leader Ken Maddy of Fresno and Assemblywoman Gwen Moore (D-Los Angeles), who unwittingly carried two bills for the FBI during the sting operation.