Document Describes Capitol Sting : Courts: Judge releases 1988 FBI affidavit in corruption probe of Hill and Nolan. Defendants call the information misleading.

After agreeing to help an undercover FBI agent get the governor’s signature on a special-interest bill, then-Assemblyman Frank Hill accepted a $2,500 check from the agent, who urged him “to make sure you count it all,” according to a 5-year-old document released in federal court Monday.

The document, which was used to justify a 1988 search of Capitol offices, provides a glimpse of the government’s case against Hill, now a state senator from Whittier, and his fellow Republican, Assemblyman Pat Nolan of Glendale.

The search warrant affidavit describes Nolan’s meeting on the floor of the Assembly with the same federal agent, who was posing as a Southern businessman. Nolan assured the agent that he had spoken with then-Gov. George Deukmejian about the bill and “everything appeared all right,” the document says.

The next morning, meeting in a hotel suite across from the Capitol, Nolan accepted two undated $5,000 checks from the phony businessman--one payable to the assemblyman’s campaign committee and the other left blank. The $2,500 check to Hill was given to him directly as an honorarium.

The payments were delivered in the presence of Nolan aide Karin Watson, who advised the agent “that leaving the check blank was all right,” according to the affidavit signed by FBI Agent James J. Wedick Jr.

The sworn statement quotes Watson as complaining that Hill and Nolan were becoming “goosie” because the agent was repeatedly “talking about money and bills.” Watson, who is now cooperating with authorities, said Hill suspected that “the guy was wired (wearing a hidden recording device) and is, is working with FBI.”

Later, she said that Nolan too was worried that the supposed businessman “was just the type of individual whom the FBI would set up to do an undercover operation.”

Hill and Nolan eventually reported receiving the money--although in Nolan’s case he was late reporting one of the checks.

Nolan and Hill have pleaded not guilty and Monday they complained about the release of the material before their trial.

“The government’s affidavits are often one-sided and frequently contain misleading and erroneous information,” said Mike MeCey, Nolan’s aide. “We hope people will judge Pat by his own actions and not by the actions of others.”

Hill issued a statement saying that the document “is scattered with innuendoes and sentences which are taken completely out of context. . . . By releasing this document, the public will receive a one-sided and unfair reading of this case before the trial begins and I can defend my name.”

The two men are awaiting trial on federal political corruption charges. The search warrant affidavit was released over the objections of attorneys representing Nolan, Hill and their fellow defendant, former legislative aide Terry E. Frost, who contended that the document was inaccurate and could prejudice potential jurors.

However, U.S. District Judge Edward J. Garcia agreed Monday to unseal the sworn statement, which was used to justify the August, 1988, search of the Capitol offices of four lawmakers and two aides. The request to open the 108-page affidavit was made by federal prosecutors, joined by attorneys for The Times and the Sacramento Bee.

The attorneys for Nolan and Hill also asked the judge to move the trial to San Francisco, claiming that Sacramento news coverage of the political corruption probe--coupled with the large number of state government workers here--would make it impossible to select an unbiased jury.

But Garcia brusquely dismissed the arguments, contending that the defense attorneys had underestimated the ability of the court to ensure an unbiased jury. He pointed out that so much has been revealed about the Capitol probe through news reports and court documents that “most if not all of the cat has been out of the bag for some time.”

The trial of Nolan, Hill and Frost is expected to begin here in mid-March.

The three are accused of being caught in an elaborate sting operation, in which undercover FBI agents posed as Southern businessmen seeking passage of special interest bills to help start up a shrimp processing plant near Sacramento. One of the phony companies, Peach State Capital West, paid $10,000 in 1988 to two Nolan-run campaign committees as well as a $2,500 honorarium to Hill.

In April, a federal grand jury indicted Nolan on six counts of racketeering, extortion, conspiracy and money laundering for allegedly using his public office to extort campaign contributions from Peachstate and others needing help with a variety of legislation.

The indictment charged Hill three counts of extortion, conspiracy and money laundering in connection with the honorarium.

Earlier Monday, Garcia completed his instructions to the jury trying political corruption charges against former state Sen. Paul B. Carpenter and insurance industry lobbyist Clayton R. Jackson.

Attorneys for Carpenter and Jackson asked Garcia to delay release of the 1988 search warrant affidavit until the jury in their clients’ cases reached verdicts. But the judge rejected the argument that jurors in the Carpenter-Jackson trial would be influenced by news accounts of the affidavit.

Since the federal corruption probe began in early 1986, 14 people have been convicted or indicted or have pleaded guilty.

Times staff writer Cynthia H. Craft contributed to this report.