Cosmo Head Dogged by Controversy : Business: Minoru Isutani provoked outcry with Pebble Beach purchase, Vegas venture.

Cosmo World Corp. is part of the business empire of Japanese multimillionaire Minoru Isutani, whose best-known U.S. commercial venture has been his purchase in 1990 of the Pebble Beach golf courses near Carmel for $900 million.

Isutani’s ownership of the Pebble Beach property has been dogged by controversy as he has tried to increasingly privatize the famous golf clubs.

He also drew controversy with his abortive attempt to buy a stake in a small gambling operation in Las Vegas, a move that sparked published reports alleging that Isutani, 51, was linked to Japanese organized crime.

Reps. Duncan Hunter (R-Coronado) and Helen Bentley (R-Md.) had requested in July that the Department of Justice investigate the alleged ties.

A month later, Assistant Atty. Gen. W. Lee Rawls replied in a letter, saying that the FBI and the U.S. attorney’s office in San Francisco “are aware of the allegations. . . .”

“As you know,” Rawls said, “the Department of Justice vigorously pursues any allegation regarding the infiltration of legitimate businesses by alleged organized crime figures.”

An FBI spokeswoman in San Francisco said the agency would neither confirm nor deny that Isutani was being investigated.

Isutani could not be reached for comment. In a San Francisco Examiner interview last month, Isutani said he was interviewed by FBI agents in Tokyo in mid-1991 but said that “nothing was found” and that “I am clear of the allegations.”

In Los Angeles, Isutani is trying to gain environmental clearance and land-use permits from the city to build a private golf course in Big Tujunga Wash, an environmentally sensitive area in the northeast San Fernando Valley.

Isutani’s major golf holdings are in Japan. He also owns electronics and sporting goods manufacturing companies, including the Ben Hogan Co.

In 1988, Isutani applied for a Nevada gaming license to become a 50% partner in the Barcelona Hotel in Las Vegas. His application exposed him to an extensive background investigation by the state’s gaming authorities.

Thomas Roche, one of three members of the Neveda Gaming Control Board, said recently that the investigation explored the possibility that Isutani was involved with Japanese gangland figures based on two assumptions: that golf courses in Japan have a reputation of ties to organized crime and that Japanese golf course owners sometimes engage in the practice of over-selling memberships.

The gaming board’s investigation ended in 1990, when Isutani voluntarily withdrew his license application for business reasons. At the time, no evidence had been found that Isutani had mob ties or was involved in business improprieties, Roche said.

Isutani’s second controversial venture in the United States involved his purchase of the 5,300-acre Pebble Beach site. Shortly after the purchase, he unveiled a plan to sharply reduce public access to the courses, from 25% of the play time to 13%.

According to a state attorney general’s estimate, Isutani planned to sell 2,000 memberships to the private courses for $750,000 each; Isutani’s attorneys, however, said the memberships were to have been sold for about $150,000.

Isutani’s Pebble Beach privatization plan foundered late last year when the California Coastal Commission refused to approve it.

This collapse also reportedly put Isutani at risk of having his lender, Mitsubishi Trust and Banking Corp., foreclose on the Pebble Beach property. Recently, Isutani reported that he has until September to repay a $415-million loan.