Wilson to Return O.C. Contribution

As he eyes a run for the presidency, Gov. Pete Wilson cleared the slate Monday of one potential problem by deciding to refund $8,000 in contributions made to his gubernatorial campaigns by convicted Orange County swindler William E. Cooper.

The decision, disclosed by one of Wilson’s lawyers, is the first response from 28 current and former political leaders to requests made last week by clients of Cooper’s defunct companies that they return more than $44,000 in donations.

The contributions came from “money stolen from investors,” according to a letter sent by an ad hoc committee for customers who lost $136 million in the April, 1994, collapse of Cooper’s First Pension Corp. and related companies in Irvine.

“These people got shafted through no fault of their own,” and Wilson does not want money from contributors that is not really theirs to give, said Vigo G. (Chip) Nielsen Jr., counsel to the Pete Wilson Committee.

Other politicians, saying they had yet to receive the letter, have indicated a willingness to refund Cooper’s contributions to the bankrupt companies so the money could be used to repay investors.

“I would not be disinclined to return the funds, given the circumstances,” said Orange County Supervisor Gaddi H. Vasquez, who received at least $2,000 from Cooper. “I would want to review the letter and our records and make sure that they are consistent.”

U.S. Rep. Christopher Cox (R-Newport Beach) said through a spokesman that, providing federal election rules allow it, he will refund the $1,000 that investors seek and will search to see if Cooper gave him more money, which he would also return. Investors also have sued Cox over work he handled for First Pension while he was a private lawyer in the mid-1980s, although the congressman says he did nothing wrong during his limited work for the firm.

Cooper, 51, has admitted that he swindled investors out of their retirement savings--$73.1 million in principal alone--through First Pension. In February, a federal judge ordered him to pay restitution for misleading clients into investing in nonexistent mortgages and using money from new investors to make payments to earlier ones. Cooper is serving a 10-year prison sentence for fraud.

Wilson’s decision to return campaign funds elated Sandra van Loben Sels, a spokeswoman for the investor committee.

“I’m somewhat amazed and more than somewhat gratified,” she said. “I hope that other candidates and officeholders, past and present, follow Gov. Wilson’s example.”

The amount of money Cooper gave to politicians pales in comparison to the total fraud, but Michael Aguirre, a San Diego lawyer for investors, said that he is heartened by any refunds. “It may not seem like a lot, but every little bit helps,” he said.

Similar refunds have been made in other cases. Some U.S. senators who accepted $1.3 million in political donations from former Lincoln Savings & Loan operator Charles H. Keating Jr.--and then did favors for him--also returned contributions. Former Sen. Donald W. Riegle (D-Mich.), for instance, returned $78,250 to those overseeing Keating’s collapsed empire.

Wilson himself has returned contributions when he learned that the money did not come from the donors’ own pockets, Nielsen said. The Cooper contributions, he said, have been in the process of being returned since last October.

“Somebody in the campaign or the Administration must have learned that there was some taint on this money, and we began dealing with the issue on instructions from the governor,” the lawyer said. “No one asked us to do this.”

While investors figured that Cooper had donated $4,000 to Wilson’s elections, the gubernatorial campaign committee determined that he had given it $8,000.

Nielsen said the governor first tried to return the money last Dec. 2. But the labyrinthine nature of the First Pension bankruptcies, along with an inability to reach court-appointed trustees and receivers, led to a delay, he said.

Nielsen said he has the money ready and will turn it over as soon as he can figure out who should get it.

A fixture in Orange County business, social and political circles for the past two decades, the Villa Park executive once was one of the county’s biggest contributors to Republican politicians. Cooper’s corporate headquarters once served as the Orange County campaign office for former Gov. George Deukmejian, and politicians from former President George Bush to local city council candidates benefited from his campaign largess.

Cooper was a big booster of former Sen. John Seymour, whose real estate brokerage he bought in 1981, and former Orange County Supervisor Don R. Roth, who received $7,750 in political donations from Cooper along with about $11,000 in loans.

Last week, an ad hoc committee for about 8,000 investors sent two batches of cordial letters to politicians whose campaigns had received donations from Cooper.

“We respectfully request and appeal to your sense of fairness to the defrauded investors that you return all contributions which came from Mr. Cooper or any of his related entities,” the letters state.

Lawyers for investors are trying to determine the full extent of Cooper’s contributions to politicians.

All five current Orange County supervisors, as well as previous ones, received money. One, Marian Bergeson, received $400 in 1986 for her state Senate campaign. She said that she has $25,000 left in her Senate campaign committee but that state law restricts her to spending the money for charitable purposes.

“If I had the ability to pay the money back out of my Senate campaign committee, I would,” she said.

Supervisors William G. Steiner, Jim Silva and Roger R. Stanton could not be reached for comment.