Montoya Says Undercover FBI Agent Set Him Up

State Sen. Joseph B. Montoya, continuing to defend himself on corruption charges, contended Thursday he was set up by a federal undercover agent who gave him a $3,000 check at a videotaped breakfast meeting.

Undergoing a second day of grueling cross-examination, Montoya also testified that he proposed the $3,000 figure in order “to put a little bit of a limitation” on the amount he would receive from the undercover agent, who was posing as a Southern businessman.

And the Whittier Democrat denied ever seeing a “schedule of fees” sent by his office to then-sports agent Michael Trope spelling out how he could pay the senator $10,000 in campaign contributions and honorariums.

Montoya acknowledged signing a letter to Trope that referred to the payment schedule but said, “I’ve indicated that this schedule of fees is not anything I saw or that I approved.”

Montoya is on trial in federal court on 10 counts of extortion, racketeering and money laundering arising from a four-year investigation of political corruption in the state Capitol. Until now, the defense has not contended that the senator was entrapped by federal agents, who set up a phony shrimp company and pushed legislation to benefit it. But Montoya, adopting a combative tone Thursday, suggested that the federal government had unfairly snared him.

In sharp questioning, Assistant U.S. Atty. John Panneton called on the senator to explain crucial parts of the videotaped conversation in which Montoya received the $3,000 check from undercover agent George Murray.

Moments after handing Montoya the check, according to the videotape, Murray told the senator that his action in getting the bogus FBI legislation out of a Senate committee was “worth about 10 times” the $3,000 payment.

“Isn’t it clear you were getting paid for your vote?” Panneton asked Montoya.

The senator replied: “What is clear to me is this is very much a part of the set-up. . . .”

In an earlier tape-recorded meeting with undercover informant John Shahabian, Montoya had discussed the amount of the honorarium he would receive. After learning that other lawmakers were getting payments of $5,000 and $7,500, Montoya said, “I wouldn’t want to do more than three,” adding, “You don’t want to appear ridiculous.”

Panneton asked Montoya whether he had picked a lesser amount in order to avoid media scrutiny.

“I was trying to put a little bit of a limitation on what he was saying,” Montoya said.

Panneton also pounded away at Montoya on other bills involved in the senator’s alleged extortion efforts, including measures that would have affected both the National Football League Players’ Assn. and Trope.

In 1985, players’ representative David Meggysey sent the senator a letter thanking him for siding with the union. Montoya acknowledged that he wrote a notation to one of his aides on the letter, saying, “Bug me. I still have to get them rolling.” Prosecutors contend this was a reference to raising money, but Montoya denied that.

Prosecutors charge that Montoya turned his back on the union after it refused to contribute and that the senator began promoting legislation to benefit Trope, an adversary of the association. Montoya acknowledged Trope was angered by the schedule of fees but eventually gave him a total of $8,100 in campaign contributions.

Montoya repeatedly denied that he pressured Trope to give him the money. “Absolutely not. He was a friend,” the senator said.

Montoya acknowledged giving Trope a book with the handwritten inscription, “Mike, when can we do business together again?” But he said the message was a reference to sports videos Trope was producing, not campaign contributions.

Montoya and his attorneys have attempted to portray him as a reformer who co-authored Proposition 73, a campaign finance measure approved by voters in 1988.

But that contention was undercut Thursday when Montoya acknowledged that there were “loopholes” in the measure and that he staged a “last-chance” fund-raiser for his campaign only weeks before the ballot measure was passed. He acknowledged that at least one special-interest group, the California Medical Assn., had provided financial backing for it.

Proposition 73, sponsored by Montoya and two other legislators, was a rival measure to Proposition 68, designed to clean up corruption in politics by providing for public financing of campaigns.

Montoya refused to concede specific flaws in his initiative, including a contention by Panneton that a purported $1,000 limit on honorariums can easily be circumvented.

“I’m not sure there is any initiative you can put together where you can’t find loopholes,” Montoya told the jury.