Sting Proved a Test of Ethical Armor : Politics: Two former legislative aides are on trial after the FBI probed for corruption in Sacramento. But testimony reveals that a number of politicians and their staff repulsed offers of cash and campaign contributions.

When undercover FBI agents roamed the Capitol during the late 1980s offering cash and campaign contributions in exchange for legislative favors, they found several legislators and their aides eager to accept the money.

Others in the Capitol spurned the cash and refused to help a special-interest bill concocted in 1986 by federal authorities as part of an elaborate sting operation.

The prosecutors in the corruption trial of two former legislative aides that began late last month have emphasized the seamier side of politics under the Capitol dome. It was much the same in earlier corruption cases involving legislators and their staffs. But the evidence presented has shown that a number of public officials, facing the same temptations and pressures, were able to rise to the occasion and behave ethically.

There was Sen. Rose Ann Vuich (D-Dinuba), who threatened to scuttle the sting legislation--drafted to benefit a single bogus company set up secretly by the FBI--unless it was made more general, according to tape-recorded evidence presented during the trial.

And there was one of Vuich’s top aides, Senate Banking and Commerce Committee consultant Terry J. Miller, who refused to back away from a highly critical analysis of the bill. The legislation was passed, incorporating the changes that Vuich and Miller had suggested. The bill was later vetoed by Gov. George Deukmejian, who had been told by the FBI about the sting.

Other lawmakers were unwilling to carry the legislation, which was intended to help the FBI’s bogus Gulf Shrimp Fisheries of Mobile, Ala., set up a processing plant near Sacramento.

At times, according to testimony by undercover agent John E. Brennan, staff members were visibly shaken when Brennan made an explicit connection between campaign contributions and help in moving the Gulf Shrimp bill through the Legislature.

“We were there to see whether allegations that money could buy legislation were true,” Brennan testified. “I was asked to be explicit . . . as far as possible insofar as relating actions to money.”

Later, he added: “I found that some people did take cash in the course of this investigation.”

But Brennan made clear that others did not. A number objected to the nature of the very narrow legislation he was trying to get the Legislature to approve.

Playing to the hilt the part of a down-home Southern businessman in a big hurry to cut a deal, Brennan was trying to win quick passage of the Gulf Shrimp bill. Doing that late in 1986, after the deadline for new bills had passed, required a series of tricky parliamentary maneuvers and the cooperation of a number of legislators and their staffs.

That is when the FBI turned to Tyrone Netters and Darryl Freeman, according to testimony in the trial of the two former legislative aides. The government has charged Netters, 36, with nine counts of extortion, racketeering, conspiracy and money-laundering for using his position to help bogus FBI companies in exchange for cash and campaign contributions. Freeman, 44, is charged with conspiracy and aiding and abetting Netters.

Brennan said he used Freeman, a onetime legislative aide who headed a nonprofit loan guarantee agency at the time of the sting, as his guide to gaining approval for the special interest bill.

Initially, Freeman had difficulty finding a lawmaker who would carry the legislation, trying Assemblyman Phillip Isenberg (D- Sacramento) and Sam Farr (D-Carmel), both of whom, through their staffs, told Freeman they were not interested.

Instead, Freeman, according to testimony, led Brennan to Netters, who was then an aide to Assemblywoman Gwen Moore (D-Los Angeles). Moore agreed to carry the 1986 Gulf Shrimp bill, and she carried a similar bill for a second phony FBI company in 1988.

Last October, on the day that Netters and Freeman were indicted, the U.S. attorney’s office here announced that it would not charge Moore because “the evidence developed from the investigation when viewed in its entirety did not warrant the filing of criminal charges” against her.

In his testimony at the trial of Netters and Freeman, Brennan said he repeatedly attempted to determine how much Moore knew about the activities of the two defendants, sometimes resorting to heavy-handed tactics. In the end, he said, he could not be sure of Moore’s involvement.

“It was not clear in the evidence that had been developed that Assemblywoman Moore was knowledgeable about what Mr. Netters had done,” Brennan testified.

At one point, Brennan said Moore told him: “I wish someone would tell me what’s going on.”

On another occasion, Moore walked into Netters’ Capitol office just after Brennan had filled out a check for $2,500 to Moore’s political campaign committee. It is illegal to deliver a campaign check in the Capitol.

Brennan testified that he believed Moore could see the open checkbook. At that moment, the FBI agent recalled, “There was a noticeable change in facial expression. . . . She changed her demeanor and continued talking and went out the door.”

Moore continued to help Brennan with the Gulf Shrimp bill, at one point agreeing to shelve it at his request and then to revive it.

Just days before the end of the 1986 legislative session, Moore complained to Brennan about his heavy-handed tactics, which included writing checks totaling $5,000 to Moore’s political campaign committee.

“I’m going to give you your money back,” she said in a secretly recorded conversation with Brennan. She complained about how it would look if she helped revive the bill--pulling it from the Senate inactive file--just after she had deposited the contributions. “I deposit a check from you and then put it back on the active file. It looks very unseemly, so to speak,” Moore said.

A check for the amount of the contributions was mailed the next day along with a cover letter from Moore saying that the money had been “inadvertently deposited.” But someone had backdated the check and the cover letter one week--to a date several days before Moore took steps to revive the bill.

At one point, Brennan asked Freeman whether Moore knew that money he was giving to the assemblywoman’s campaign committee through a third party was in reality from Gulf Shrimp. “She absolutely understands where all that money came from,” Freeman replied in a secretly taped conversation. “She didn’t happen to say, ‘I understand that this is coming from Jack (Brennan),’ because she knows, because we told her where it was coming from.”

In response to inquiries about the testimony, Moore issued a brief statement last week that it was inappropriate to comment while a trial was in progress. She said she had been cleared of wrongdoing “because, as I knew, I had operated fully within the law.”

In their cross-examination of Brennan last week, lawyers for Freeman and Netters began to reveal the elements of their defense for the two accused men.

Freeman’s lawyer, E. Richard Walker, contended that the government sting operation, planned and carried out during a Republican administration in Washington, was aimed at Democrats.

“You tried to get (Democratic Assembly Speaker) Willie Brown and you couldn’t,” Walker asserted.

“No, sir,” replied Brennan.

“Weren’t you targeting (former Democratic Assemblywoman) Maxine Waters?” Walker asked.

“No, sir,” said the FBI agent, later adding: “There was no targeting.”

Netters’ attorney, George Walker, asserted that overzealous investigators had become desperate when their efforts to get Isenberg and Farr to carry their bill had failed.

Walker suggested that offering cash payments to aides and legislators was an attempt to create an impression of impropriety when there was none. “You wanted to push it (cash), because of the investigation,” he said during his questioning of Brennan. “You’re creating crime.”

The FBI agent testified that he delivered $1,000 in cash to the home of Karen Sonoda, then an aide to Speaker Brown, in payment for two tickets to a campaign fund-raiser. Such sizable cash contributions are not allowed under California law.

Sonoda later returned the money and Brennan gave her a cashier’s check instead. A tape recording played during the trial indicates that Sonoda helped Gulf Shrimp find an author for its bill.

Brown last week defended Sonoda’s conduct. “I don’t think any of my staff people, now or ever, have conducted themselves improperly,” he said. Any legislative staff person, such as Netters, could call on the Speaker’s staff for help in finding a sponsor for a bill, Brown said.

He said there was no way to guard against all abuses of the system. “What comes from the Gulf Shrimp bill indicates weaknesses in human beings. It doesn’t show weaknesses in our institution.”