Loophole May Hurt Snyder Case : Laws: Judge says amendment of Political Reform Act may allow lobbyists who violate it to avoid criminal charges.

In a ruling that could hamstring the prosecution of former Los Angeles Councilman Art Snyder--and casts broad doubt on enforcement of state political reform laws--a judge said Monday that it appears lobbyists who violate campaign fund-raising rules have been exempted from criminal charges.

Superior Court Judge John Ouderkirk said his review of state law indicates that the state Legislature, intentionally or not, “may have provided a loophole from the most serious consequences of violating (the act) for lobbyists” when it amended the Political Reform Act in 1984. Furthermore, the judge said, candidates, elected officials and campaign treasurers may enjoy the same exemption.

Ouderkirk offered a detailed analysis of the complex and legally untested law during a hearing in which Snyder, back as promised from overseas travels, and several associates pleaded not guilty to a grand jury indictment charging they conspired to funnel illegal donations to politicians. The far-reaching scheme, prosecutors contend, involved dozens of people and hundreds of thousands of dollars, chiefly to boost the political influence of Snyder, now a prominent Downtown lawyer-lobbyist.

Ouderkirk told lawyers for both sides it appeared that the alleged money-laundering operation was “just the sort of circumstance where the conspiracy statute is appropriate, given the overt acts alleged.”

But, incorporating several arguments made by Snyder’s attorney, Ouderkirk said a careful reading of the Political Reform Act suggests nothing more than administrative fines can be levied against lobbyists who violate the act, and those who aid their efforts.

Snyder and his attorney, Mark Geragos, praised the judge’s comments, saying they underscored their contention that the case has been wrongly prosecuted as a felony from the start.

Telling reporters the charges against Snyder and the others are “hyper-technical,” Geragos said, “I feel we have a good chance” of getting the case dismissed.

Government watchdog groups, election law experts and a spokesman for a state senator who authored the 1984 amendments took issue with Ouderkirk’s reading of the law.

Darryl East, chief of enforcement for the state Fair Political Practices Commission, said the “obvious intent of the whole (voter-approved state reforms) was to have us pursue these type of individuals.” Rather than limit enforcement, East said, the amendments cited by the judge were supposed to expand authority to police the activities of political consultants.

Scott Johnson, who worked on the amendments as general counsel to state Sen. William A. Craven (R-Oceanside), agreed. Exempting lobbyists, candidates and campaign treasurers from criminal prosecution was not “remotely close to anything we intended or ever discussed,” he said. “It would be the most unintended result.”

Ouderkirk on Monday rejected a defense motion to immediately throw out the indictment. And he left until July a new round of arguments on whether Snyder and his co-defendants would qualify for the exemption.

Still, the language of his ruling stunned prosecutors and clearly seemed to increase the prospect that one of the more ambitious political cases brought by the Los Angeles County district attorney’s office in recent years could be dismissed.

“Notwithstanding that the judge put a lot of effort into coming up with this ruling, we feel it is contrary to the will of the people and the intent of the Legislature,” said Deputy Dist. Atty. Katherine Mader.

“If a lobbyist delivered a million dollars in a paper bag in order to influence a politician, they would be home free in terms of criminal prosecution,” she said.

Mader and co-prosecutor Gail Ehrlich said they were reviewing their options and would anticipate appealing any dismissal of the case on the grounds suggested by Ouderkirk.

Noting the case’s high profile and the unusual nature of the charges, Ehrlich said, “We always assumed this would be litigated at the appellate level.

“We are confident that when an appellate court looks at the plain language, they are going to say the Political Reform Act may be enforced against political lobbyists.”

Also pleading not guilty with Snyder were his law partner, Gilbert Archuletta; a law firm employee, Aide Posadas; William Wang, Snyder’s brother-in-law who headed a shipping firm that has admitted laundering funds through employees, and two of Snyder’s sisters-in-law. Snyder’s wife, Delia Wu Snyder, also was indicted, but was not present to enter a plea. A warrant has been issued for her arrest, but she has been distraught and has remained in her native Taiwan for several months, according to the ex-councilman.

Snyder, who has insisted he is innocent, beamed openly at the judge’s ruling, saying the district attorney was learning that it could not just “bring someone up before a judge and hang them.”

He arrived at court early to surrender his passport after returning as promised from a European trip. To some raised eyebrows in political circles and over prosecutors’ objections, Ouderkirk last month allowed Snyder, who could face prison time if convicted, to leave the country. “It was good to see you this morning,” the judge told the 62-year-old lawmaker-turned-lobbyist. “There were those who said I wouldn’t.”