Lobbyist’s Trial Rocks the System : Politics: Prosecutors claim Clayton Jackson channeled millions from his clients to legislators.

For two decades, lobbyist Clayton R. Jackson carefully shunned the spotlight while becoming one of the Capitol’s most influential behind-the-scenes players.

He plied his trade in the back rooms and hallways of the Capitol. As a consummate insider, he rarely testified in legislative hearings, nor was he a public spokesman for his business clients.

But with a single phone call to clients, especially some of California’s biggest insurance companies, Jackson directed millions of dollars into the campaign coffers of ambitious state lawmakers, according to testimony at his federal corruption trial here.

Jackson would give “pep talks” to insurance industry moguls in which he indicated “you had to put up (money) if you were to survive in the game,” testified Robert Thompson, former chief operating officer of 20th Century Insurance.

Thompson and other insurance executives told the jury they loyally followed Jackson’s fund-raising recommendations, funneling large amounts of money to a variety of politicians, including Jackson’s co-defendant, former state Sen. Paul B. Carpenter.

As the U.S. District Court trial nears an end, the testimony has helped part the curtain and show the hidden maneuvering that made Jackson a leader of the back room pack.

The trial raises the question of whether Jackson was a brilliant advocate using the campaign fund-raising system to his full advantage or whether he manipulated the process to illegally channel money to politicians such as former Sen. Alan Robbins, the prosecution’s star witness, who is nearing the end of a two-year prison term.

Aside from any potential improprieties, Jackson at best has described a legal fund-raising system growing out of control, especially the escalating pressure and arm-twisting by lawmakers to feed their growing appetites for campaign funds.

Because Jackson was such a central player in the fund-raising game, his trial is making some of those lawmakers and other lobbyists jittery.

More than any other figure targeted by the ongoing federal anti-corruption probe, Jackson dealt with virtually all legislators. If Jackson is convicted, they fear that he might follow in Robbins’ footsteps and strike a deal with the government in exchange for a reduced sentence.

“He’s the big enchilada,” said one Democratic state senator. “He has plenty of stories to tell.”

Federal prosecutors contend that Jackson was too slick for his own good and that some Jackson-directed donations crossed the line, violating a federal racketeering statute. Robbins, a beneficiary of thousands of dollars in contributions from Jackson’s clients, maintains that Jackson is part of a corrupt cabal in which money buys votes.

Jackson, 50, a lawyer who lives in the affluent Marin County town of Mill Valley, counters that the money is merely a tool “to build relationships” to legally influence, not corrupt, lawmakers.

Noting that he once taught a law school ethics class, Jackson dismissed the sordid picture of the Capitol that Robbins painted in his testimony.

“I didn’t recognize the process Robbins was describing, designed to befuddle the public . . . (and) enrich members,” Jackson told the jury, even though he concedes that the fund-raising system has undergone dramatic, negative changes in the past 20 years.

Sparring with prosecutors, Jackson insisted that the only reason he is standing trial is that the government ensnared Robbins and turned the former San Fernando Valley lawmaker into an enthusiastic federal informant who wore a wire to secretly record conversations with him in the summer and fall of 1991.

With Robbins’ help, a federal grand jury in February indicted Jackson on 10 counts of racketeering, conspiracy and money laundering. Jackson allegedly offered or gave bribes to Robbins in return for his vote or other official action. Carpenter, 65, was charged with 11 counts of conspiracy, money laundering and obstruction of justice.

Both men pleaded not guilty before the trial started Oct. 12.

In conversations recorded by Robbins, Jackson said he would pay the senator $250,000 to switch committee jurisdiction on workers’ compensation legislation. Insisting that he was merely “putting off” Robbins, Jackson testified: “You don’t tell a powerful member to go fly a kite.” The lobbyist stressed that he never paid any of the money mentioned on the tapes.

But even some of Jackson’s allies in the insurance industry, including some members of the Assn. of California Insurance Companies, which he represented, are testifying against him.

They were called as prosecution witnesses to buttress the government’s claim that Jackson was aggressively trying to raise money from them at the same time he says he was stringing Robbins along about the $250,000.

A Glendale insurance executive testified that he “felt uncomfortable” when Jackson asked him in August, 1991, to contribute $50,000 to state Senate President Pro Tem David A. Roberti (D-Van Nuys) to either battle a term limit initiative or influence the outcome of the reapportionment fight.

James E. Little, president of Fremont Pacific Insurance Co., told the jury: “He wanted to leave with a check. I felt I was really having the arm put on me. I felt I was really being pressured.”

Roberti’s spokesman, Steve Glazer, said Roberti did not ask Jackson or Little to raise money for him. “At its origin,” Glazer said, “this whole scenario was a creation by the government in their sting efforts . . . and had no basis in reality.”

Both 20th Century’s Thompson and Gerald Kreger, former president of Republic Indemnity, testified that they relied on Jackson’s recommendations in making contributions.

At Jackson’s direction, Kreger testified, his firm made legal contributions of $100,000 a year. “I didn’t like all of them, but we sent them anyway” as a way to influence the outcome of legislation and elections, Kreger said.

Jackson testified that he was attempting to form a legitimate trade association and never intended to pay the $250,000 to Robbins, who Jackson asserts was extorting him.

Jackson, who estimated that his clients gave $3 million in 1987-88 alone, said the pressure on lobbyists to come up with campaign funds has risen dramatically in his two decades in the Capitol.

At 6-foot-6 and 300 pounds, the former USC football player has cut an imposing figure ever since arriving in the Capitol in the early 1970s. He nurtured his business into a $2.1-million-a-year concern, making the lobbyist firm one of the top moneymakers in 1992. His clients included Anheuser-Busch Cos., B.F. Goodrich Co. and GTECH, which holds hundreds of millions of dollars in California lottery contracts.

While vigorously denying the government’s charges of wrongdoing and sparring with prosecutors during cross-examination, Jackson said lawmakers no longer just hold old-fashioned testimonial dinners but also stage some unusual events, such as a Panama Canal cruise held by Robbins to attract donations. The money is needed, Jackson said, to meet the rising cost of mass mailings, TV commercials and campaign consultants.

His huge frame squeezed into the witness stand, the ruddy-complexioned Jackson cited how lawmakers, especially legislative leaders, would regularly enlist major lobbyists such as him to make campaign donations.

He said Assembly Speaker Willie Brown (D-San Francisco) would tell lobbyists about lawmakers who faced election trouble or the aspiring candidates who needed financial help. Another time, Jackson said, Brown solicited him for contributions to two rival San Francisco mayoral candidates.

Off the stand, Jackson said he sought to round up contributions for both candidates in the 1987 mayoral runoff, whom he identified as Art Agnos and John Molinari.

In a telephone interview Friday, Brown said he has no recollection of urging Jackson to assist both candidates, noting that he was a strong backer of eventual winner Agnos, a former assemblyman. But he quickly added that he would never ask someone “to go both ways. That’s not Willie Brown.”

The Speaker acknowledged that in election years, after the Legislature adjourns, he spends three or four days meeting with lobbyists and associations outside the Capitol to encourage them to contribute to some candidates and discourage them from “wasting money” on others.

He said he would try to get Jackson to attend these sessions, but his clients were typically “hostile to my membership and occasionally to me.”

Asked his reaction to the Robbins-Jackson tapes, Brown described them as “mind-boggling” but “not typical” of what happens in the Capitol.