Seymour Aide Intervened in Licensing Matter : Politics: Records show the senator’s chief of staff twice contacted state regulators about a businessman who owed the lawmaker money.

While U.S. Sen. John Seymour was a state lawmaker, his chief aide intervened twice with regulators in the state licensing of a Seymour business associate, public records show.

In the first instance, the records show, Seymour’s chief of staff urged the Department of Real Estate to restore a broker’s license lost by William E. Cooper, an Orange businessman who at the time owed Seymour more than $200,000 in a private deal.

Later, when the deal soured and Seymour filed suit against his one-time partner, the aide encouraged regulators to investigate Cooper’s company, according to the records. The inquiry ended in a finding that Cooper’s company had run afoul of state regulations.

Seymour, who was appointed in January to the U.S. Senate by Gov. Pete Wilson, acknowledged that he complained to his chief of staff about his difficulty in collecting the money Cooper owed him.

But Seymour denied asking his aide to intervene in either instance and said he was not trying to use his position to put pressure on Cooper to settle the debt.

“I probably told him (the aide), ‘Look, I’m not getting paid and I’m not happy about it,’ ” Seymour said in an interview. “From a business standpoint, I would have liked to be paid. From a political standpoint, I didn’t have anything to do with it and wouldn’t have.”

The aide--William Cranham--said he knew of the business relationship between Cooper and Seymour but was acting on his own. Cranham, who continues to serve as Seymour’s chief of staff, said he changed his opinion of Cooper and asked for the investigation after learning that the businessman had defaulted on his obligation.

Under the Political Reform Act, California lawmakers are prohibited from involving themselves in governmental decisions that can be foreseen to have a specific financial effect on a business that is a source of their income. The law does not address actions taken by a legislator’s staff without the lawmaker’s knowledge.

Seymour acknowledged that Cranham’s intervention presented the appearance of a conflict between the lawmaker’s public and private dealings.

“It looks horrible,” Seymour said. “Had I known that, I would have put a stop to it immediately.”

Seymour’s office had strong ties with the Department of Real Estate because the lawmaker, a former president of the California Assn. of Realtors, carried many of the department’s proposals in the Legislature and served as a mediator between regulators and the industry.

The relationship between Seymour and Cooper was detailed in a series of interviews and in records on file in Orange County Superior Court and at the Department of Real Estate.

Cooper in October, 1981, bought 80% of Seymour’s Anaheim-based real estate firm, John Seymour & Associates. The deal was a crucial one for Seymour, not only because of the money he would receive, but because the sale freed him to run for the Legislature, Seymour has said.

Cooper gave Seymour $50,000 cash, and his company agreed to pay Seymour an additional $670,000--plus interest. But the firm quickly encountered financial trouble and Cooper could not make the required payments.

About the same time, Cooper came under the scrutiny of state regulators in the Department of Real Estate, who in 1984 revoked his license after one of his employees diverted $577,000 from a trust fund under Cooper’s control. Cooper was placed on a restricted license, a form of probation that gave the real estate commissioner discretion to revoke his right to do business at any time.

In May, 1984, Seymour and Cooper renegotiated their deal. Seymour gave Cooper the remaining 20% of the company stock and forgave about two-thirds of Cooper’s debt, reducing it from $611,000 to $223,125. In return, Cooper agreed to remove Seymour’s name from the company and exempt him from liability for any irregularities in the company’s trust funds.

But the new agreement did nothing to improve the brokerage company’s fortunes. Cooper continued to struggle and had trouble paying Seymour.

Two years later, in September, 1986, Cooper wrote Seymour a letter stating that he would be making no further payments on the note. In the letter, which is part of the court record, Cooper suggested that Seymour retake ownership of the firm or help him find a buyer.

Cooper was asking the state to restore his unrestricted broker’s license. The next month, Seymour’s chief of staff, Cranham, made the first of two contacts with the real estate commissioner in connection with Cooper’s activities.

Cranham wrote a letter of recommendation at Cooper’s request in which he said he had known the businessman through his “many community activities in Orange County and in this capacity I hold him in high regard.” Cranham recommended “favorable consideration of his request.”

In an interview, Cranham said he wrote to the department without consulting Seymour. Although the letter was not on the lawmaker’s office stationery, Cranham was well known to department officials and Cooper pointed out in a cover letter that Cranham was Seymour’s chief of staff.

Cranham said he did not consider his involvement to be a conflict of interest because he wrote the letter as a personal favor to Cooper and not in his role as Seymour’s aide.

“I was aware of the fact that Bill was the purchaser of the senator’s business, and several weeks later I learned he was in default,” Cranham said. “Had I known that there was a cloud on that relationship, then I might have felt that Mr. Cooper was using me and probably would not have written the letter.”

In December, 1986, Seymour sued Cooper in Orange County Superior Court, seeking payment of the $223,000 note on the sale of the company, now called Diversified Realty Center, plus interest and legal fees.

Two months later, Cranham again contacted state regulators about Cooper, but this time his tack was completely different.

In a call to then-Real Estate Commissioner James Edmonds Jr., Cranham said, he alleged that Cooper’s company was violating state regulations.

“I called the commissioner and said, ‘I wrote a letter on behalf of Bill Cooper and I want to rescind that letter of recommendation,’ ” Cranham said. “I told him, ‘Before you do anything, you better check this guy out. I’m hearing some disturbing things about what is going on in that operation out there.’ ”

The department denied Cooper’s request for an unrestricted license and began an audit of the company. In April, 1987, the department ordered the firm to no longer allow Cooper and another salesperson unauthorized access to trust fund accounts.

The current real estate commissioner, John Liberator, said Cranham’s request for an investigation did not get preferential treatment.

“If you called with the same tip, we’d do the same thing,” Liberator said.

The Seymour-Cooper lawsuit was finally settled in August, 1988, when Cooper agreed to pay the legislator $100,000.

Cooper, in an interview, said he never knew that the investigation of his company was prompted by a Seymour staff member.

“It’s news to me,” Cooper said. “I owed John money. I subsequently paid John off. It was a business deal, and the business went sideways.”

Times staff writer George Frank also contributed to this article.