Notes Suggest Others Linked by Silberman - Justice: A previously censored statement made by Richard Silberman to the FBI indicates he pointed fingers at Assembly Speaker Willie Brown and other prominent figures.

When he was arrested on money-laundering charges last year, San Diego financier Richard T. Silberman offered to implicate California Assembly Speaker Willie Brown, Chula Vista Councilman David Malcolm and several prominent businessmen in wrongdoing, FBI notes of Silberman’s alleged confession suggest.

Silberman, a one-time top aide to former Gov. Edmund G. Brown Jr. convicted last week of a single felony charge, apparently told FBI agents that Brown (D-San Francisco) profited from the fight over the California unitary tax in the mid-1980s, the sometimes-cryptic notes suggest.

The notes, filed in federal court in San Diego, appear to characterize Malcolm as Brown’s “bagman.”

The notes also mention SCEcorp Chairman Howard Allen and Southern California Edison’s hotly contested proposal to merge with San Diego Gas & Electric in connection with legal fees paid to Brown’s San Francisco law firm.

Silberman, 61, who is married to San Diego County Supervisor Susan Golding, was convicted June 28 of violating a federal currency law in an alleged scheme to launder drug profits. He was sent immediately to jail without bail to await sentencing in September. The jury deadlocked, heavily in favor of conviction, on five other counts facing Silberman.

The terse notes, which came to light Friday, were handwritten by FBI Agent Charles Walker during a three-hour interview with Silberman immediately after his arrest in April, 1989.

During Silberman’s trial, Walker testified that Silberman had mentioned that he had helped several prominent figures create foreign corporations to launder money. Walker testified that Silberman, trying to cut a deal to avoid prosecution, offered to help the FBI investigate those people.

The FBI agent’s notes were edited at the trial to black out those names and, under orders from the judge presiding in the case, Walker did not mention them while testifying.

But unedited copies of the notes were filed by Silberman’s lawyers--apparently inadvertently--in federal court in San Diego and surfaced Friday. The notes contain often cryptic references to seven politicians and businessmen.

In one passage, the handwritten notes, line by line, read:

“Allen Glick--none”

“Willie Brown--David Malcomb (sic) --bagman”

“Howard Alan (sic) --SCE/SDGE merger”

“legal fees to WB firm”

“7/83--Jap. meeting re unitary tax”

“25K ‘legal fee’--millions in savings”

“Son--Willie Brown”

The notes then go on to other matters.

The final line is apparently a reference to Silberman’s son, Craig, who works for Brown in San Diego. Craig Silberman declined Friday to comment.

Brown’s name had first come up in connection with Silberman’s money-laundering case in February, when other court documents--also filed inadvertently by the defense--disclosed that Silberman had mentioned the speaker’s name immediately after arrest in April, 1989. But the context of the reference to Brown and two San Diego businessmen was not clear.

Brown issued a single-sentence statement Friday through his press secretary, Nancy Pender: “I have never received payments from Edison because my law firm has never represented Edison in any matter.”

La Jolla investor Allen Glick, a former Las Vegas casino owner with reputed mob ties, could not be reached for comment.

An SCEcorp spokesman said Friday that the Rosemead-based utility had no records of any payments to Brown, to Brown’s San Francisco-based law firm or to Malcolm. “There is no basis for this stuff whatsoever,” spokesman Lewis Phelps said.

The unitary tax describes a method of taxation of multinational corporations that do business in the state of California. Until 1986, the state taxed such corporations based on their worldwide profits, rather than just the profits generated within California or the United States.

Silberman, after leaving his positions in Gov. Brown’s cabinet, was actively involved in lobbying the Legislature for Japanese interests in the mid-1980s when lawmakers were considered overhauling the unitary tax law. In 1986, the Legislature revised the system in a way more favorable to foreign-based corporations.

Malcolm, a Chula Vista city councilman who has been appointed twice to the state Coastal Commission, is one of the few Republicans the Assembly speaker has ever named to a state post.

“I’ve had a lot of bizarre things happen in my life,” Malcolm said. “I’ve been around controversy. But I’ve never been around anything more bizarre” than the FBI notes of Silberman’s conversation.

“I will say this: I have picked up the speaker at the airport and carried his luggage to his car--if that’s what they mean by bagman,” he said.

Malcolm said the context of the reference was particularly difficult for him to understand because he has been vocally opposed to the proposed utility merger.

He added, “Where’s one shred of anything when some desperate guy shoots off my name? I thought (Silberman) was not a friend but an acquaintance, and it just shocks me. I’ve never even been out to dinner with the guy. He doesn’t even know me.”

Silberman’s lawyer, San Francisco attorney James J. Brosnahan, declined Friday to comment on the FBI notes.

On another page of the FBI agent’s notes, there are references to three prominent San Diego-area businessmen: Carlos Bustamante, a Tijuana businessman whose family is politically active in Mexico and has extensive real estate holdings; Christopher Sickels, a real estate developer, best known for a costly renovation of the historic U.S. Grant hotel in downtown San Diego, and Arjun Waney, the founder of a San Diego-based clothing firm, Beeba’s Creations.

The notes, line by line, say:

“Chris Sickles (sic) --U.S. Grant--real estate”

“Carlos Bustamante--Mexican land Hong Kong Dec. 88”

“Arjun Wany (sic) --Indian/La Jolla cloths mfc.”

“Swiss bks--corporations etc--”

Two lines later the notes say, “RTS (Richard T. Silberman) would cooperate--wire+ etc.” The reference to “wire” is to a hidden microphone, a device the FBI indicated at the trial that Silberman was prepared to wear.

Waney was out of the country Friday and could not be reached for comment. Bustamante and Sickels could not be reached for comment.

The day after Silberman was found guilty, the jury announced it was deadlocked on five remaining counts, including the three money-laundering charges at the center of the case. U.S. District Judge J. Lawrence Irving declared a mistrial but sent Silberman back to jail to await sentencing Sept. 25.

Silberman could draw as much as 10 years in federal prison, though new sentencing guidelines suggest that a term of one to five years is likely.

Federal prosecutors have said they plan to retry Silberman on the unresolved charges. He is charged with laundering $300,000 allegedly characterized by an undercover FBI agent--posing as a front man for Colombian drug lords--as narcotics profits.

Silberman was arrested in April, 1989, at the Hyatt Islandia hotel in San Diego’s Mission Bay. By then, prosecutors contend, he already had done two money-laundering deals, using cash supplied by undercover agent Peter Ahearn, and had just concluded negotiations with Ahearn for a third.

Immediately after Silberman was arrested, he talked with FBI agents for three hours, according to Walker’s testimony. Walker took a page-and-a-half of notes during the conversation.

At Silberman’s trial, which began May 1, Irving, the judge presiding over the case, allowed only an edited version of those notes to be made available, ordering that all names not directly related to Silberman’s case be blacked out. Since the attorneys were under orders not to discuss the names, the filing of the unedited notes appears inadvertent.

However, on May 14, Silberman’s lawyers had filed an unedited version of the notes with a document detailing the examination a defense handwriting expert had given the notes. Until Friday, those notes had languished, unnoticed, in Silberman’s voluminous court files.