California Sen. Montoya Found Guilty on 7 of 10 Felony Counts

State Sen. Joseph Montoya, snared in an elaborate FBI sting operation against political corruption, was found guilty Friday of seven of 10 counts of racketeering, extortion and money laundering in the first felony conviction of a state legislator in 35 years.

The seven-woman, five-man jury heard eight weeks of testimony and deliberated four days before finding the 50-year-old Democrat from Whittier guilty of accepting money from a bogus company to help ram a bill through the Legislature.

Montoya will be sentenced April 26. The maximum penalties are 20 years in prison for each count. He also faces $2 million in fines and could forfeit $8,000 prosecutors said he accepted illegally.

Defense attorney Michael Sands said he would appeal the verdict “on every ground we can find. We think there are quite a few.”

Juror Greg Coumas, a car dealership employee, said the trial left him with misgivings about the state of California politics.

“It bothers me,” he said. “There were other legislators that came up (during the trial). It seems likely it doesn’t end here.”

Montoya was convicted on five counts of extortion, one count of racketeering and one count of money laundering. The jury found Montoya innocent on three counts of extortion.

A stoic Montoya sat between his lawyers at the front of the heavily guarded courtroom packed with relatives and reporters.

Asked if he would resign from the Legislature, defense lawyer Sands said: “I cannot comment on that at this time. We will have our discussions.”

“This case struck a chord with a lot of Californians,” said U.S. Atty. David Levi, who headed the prosecution team. “People care about a case like this.” Other than to say the investigation of Capitol corruption is still under way, Levi refused to discuss the likelihood of indictments against other lawmakers.

But he added, “We felt it was very important to win the first case.”

Montoya’s conviction leaves his colleagues facing the sticky legal and political problem of whether to expel him from the Senate.

Senate leader David A. Roberti (D-Los Angeles) said he has called an emergency meeting of the Senate Rules Committee for Monday to determine Montoya’s fate in the Legislature. He could be expelled from the Senate on a two-thirds vote.

No lawmaker has been expelled by his colleagues since 1905, when four senators were removed from office on the same day after they were implicated in a bribery scheme.

Since his indictment on May 17, 1989, Montoya has remained in the Senate as chairman of its Business and Professions Committee.

The last time a sitting legislator was convicted of a felony was in 1954, when Assemblyman Charles Lyon, a Beverly Hills Republican, was found guilty of bribery in a scandal involving the sale of liquor licenses.

Montoya’s former top aide, Amiel Jaramillo, was indicted along with his boss. He is due to go on trial on March 5.

During the elaborate sting investigation, the FBI formed two companies seeking special legislation that would have allowed it to obtain cheap state-backed financing for a proposed shrimp processing plant in West Sacramento.

Undercover agents, posing as company executives, won easy passage of bills in 1986 and 1988. Both were vetoed by Gov. George Deukmejian, who had been tipped off by the FBI.

In September, 1987, a Democratic legislative aide, John Shahabian, was caught extorting a $20,000 campaign contribution from agents in behalf of his boss, Sen. Paul Carpenter, who is now a Board of Equalization member.

In exchange for immunity from prosecution, Shahabian agreed to help agents by wearing a hidden tape recorder while he helped shepherd the 1988 bill through the Legislature.

The jury heard a taped conversation of Shahabian asking Montoya to support the bill and the senator’s agreement to accept a $3,000 honorarium from the FBI’s sham company.

Jurors also saw a secretly videotaped breakfast meeting in which Montoya stuffed an envelope containing a $3,000 check in his coat pocket.

Montoya contended during four days on the witness stand that California law permitted him to accept an honorarium for attending the breakfast.

The investigation came to light Aug. 24, 1988, as FBI agents searched the offices of Montoya and three other legislators.

The other three, Assembly members Gwen Moore (D-Los Angeles), Pat Nolan (R-Glendale), and Frank Hill (R-Whittier) remain targets of the investigation, along with Carpenter. No other lawmakers have been charged.

After the search, a federal grand jury continued investigating Montoya. Besides the sting, he was accused in seven other instances of wrongdoing.

Prosecutors portrayed Montoya as a man driven to become a millionaire any way he could.

The jury acquitted Montoya on three extortion counts dealing with charges that he attemped to extort money from actor Ed Asner and the Screen Actors Guild, a recycling company in his district known as the Allan Co., and the California Independent Producers Assn., a trade group of natural gas producers.

But the jury convicted Montoya on counts of trying to extort money from prominent sports agent Mike Trope and the National Football League Players’ Assn., who were opposing each other on legislation in 1985.

Montoya was also convicted of extortion for demanding money from lawyer-lobbyist Gene Livingston, who wanted Montoya to carry a bill protecting the graduates of foreign medical schools.

An official of the California Oil and Gas Assn. said Montoya, after voting in favor of a bill the association wanted passed, asked a lobbyist to make sure that a campaign contribution had been made. But the jury acquitted Montoya of extortion in that incident.