Judge Rejects Most Counts Facing O.C. Legislator Baugh

Saying prosecutors withheld crucial evidence about a key witness from the Orange County Grand Jury, a Superior Court judge on Tuesday threw out 17 of 22 campaign fraud charges against Republican Assemblyman Scott Baugh of Huntington Beach.

Baugh still faces trial on one felony and four misdemeanor counts for allegedly lying on two state-required economic interest statements.

In his ruling, Judge James L. Smith declined to dismiss charges against two GOP aides who were indicted along with Baugh in March as part of a six-month investigation into last year’s recall election of renegade Republican Assemblywoman Doris Allen.

The election was critical to Republicans statewide. Baugh replaced Allen and tilted the balance in the Assembly, which led to the selection of Curt Pringle of Garden Grove as speaker.

Baugh cheered the dismissal of the charges and said it pointed to his complete vindication. He blasted Dist. Atty. Michael R. Capizzi for what he said was a “blatant” attempt to reap political gain from the case.

“The entire indictment is a house of cards built on perjured testimony,” Baugh said. “The district attorney’s case is collapsing.”

Baugh predicted that the remaining charges would fail. “The exonerating evidence is there,” he said. Baugh will ask the district attorney’s office today to drop the remaining charges, said his attorney Allan Stokke.

Assistant District Atty. John Conley said it will take prosecutors several days to decide their next step.

“We are surprised and respectfully disagree with Judge Smith,” he said. “He ruled on procedures in front of grand jury. This is not a determination of innocence or guilt.”

The prosecutors’ options include trying Baugh on the remaining counts, appealing Smith’s ruling, filing the charges as a complaint and proceeding to trial via through a preliminary hearing, or returning to the grand jury to seek a new indictment.

Smith declared “the viability” of the 17 dismissed counts “rest upon the testimony” of Baugh’s campaign treasurer, Dan Traxler, and said prosecutors failed to provide grand jurors with “prior inconsistent statements” by Traxler.

Characterizing Traxler as substantially “evasive and ambivalent” in his interviews with district attorney’s investigators, Smith said: “To have deprived the grand jury of the opportunity to fully evaluate his credibility and consider prior statements that were both inconsistent and exculpatory as to the defendant is fatal” to the prosecution’s charges.

Traxler, reached at his Huntington Beach office, would not comment, referring calls to his lawyer, Robert Rinehart. “Neither he nor I are going to give any statements until the matter is resolved in the courts,” Traxler said.

Prosecutors had defended the indictments during a three-day hearing on the motions, which ended Monday. They told Smith there is no requirement that they impeach their own witness before the grand jury. They also told the grand jury that Traxler “was to some extent tainted” and presented some evidence of his inconsistent statements.

The judge, however, said prosecutors “had merely scratched the surface of Mr. Traxler’s apparent creative recollection of the events.”

Baugh was indicted on four felony counts of perjury and 18 misdemeanors for allegedly concealing or misreporting tens of thousands of dollars on campaign finance reports and two economic interest statements.

Among the charges were that Baugh deliberately omitted a $1,000 contribution from Laurie Campbell to hide his longtime friendship with Campbell, a decoy Democratic candidate recruited by Republicans to siphon votes from Baugh’s chief Democratic rival. Campbell was later thrown off the ballot by a Sacramento judge.

All the counts dismissed, Smith said, involved testimony from Traxler or reports compiled by him. The five counts remaining, were all contained in the economic interest statements and were independent of the former campaign treasurer, who resigned in December.

In one instance, Smith dismissed a misdemeanor count despite testimony from a friend of Baugh’s who testified to the grand jury that he gave Baugh $8,800 in cash for his campaign. Cash over $100 is illegal in state campaigns in California. The only connection to Traxler was that he compiled the campaign statement in which the donation was reported.

At his district office in Huntington Beach, an exuberant Baugh charged that Capizzi had used the case to distract attention from his failure to prevent the county’s recent bankruptcy, and to help propel him to statewide office.

“The district attorney manipulated the evidence to get an indictment,” Baugh said. “And it backfired. They used a guy they knew was lying. They only wanted statements that would fit their political agenda.”

Capizzi has consistently denied that the charges were politically motivated.

One of the other two defendants is Rhonda Carmony, the campaign manager for Rep. Dana Rohrabacher (R-Huntington Beach). She is charged with three counts of election fraud for helping to place Campbell on the ballot to help ensure Baugh’s victory. Rohrabacher, who lent Carmony’s expertise to the Baugh campaign, is Baugh’s political mentor.

The grand jury also indicted Baugh’s chief of staff, Maureen Werft, on two felony counts, alleging she filed for an absentee ballot and voted illegally.

The defendants and prosecutors are due back in court at 9 a.m. today to discuss trial setting and pretrial motions.

In addition to dismissing the first 17 counts of the indictment against Baugh, the judge granted discovery motions by Werft and Carmony, who have charged that the district attorney improperly singled them out for prosecution. Both defendants claim that prosecutors may have sought indictments against them because of their political beliefs or associations. They are seeking information from the county to show that the district attorney has failed to prosecute others on similar allegations.

In his six-page ruling, Smith, a Republican appointed to the Municipal Court in 1971 by then-Gov. Ronald Reagan, pointed out that the role of the grand jury is “quasi-judicial” and independent of the district attorney’s office.

He said prosecutors must act in an advisory capacity and “refrain from expressing an opinion” about the effect or sufficiency of evidence. He said on “numerous occasions . . . prosecutors overstepped these recognized bounds” in the case.

He said prosecutors could have undermined the role of the grand jury, which is to “exercise independent judgment,” or its job, which is to “protect citizens from unreasonable and frivolous felony prosecutions.”

Smith said that “with few exceptions” the instances where prosecutors may have improperly influenced the indictment occurred while they were presenting evidence against Baugh under counts one through 17.

“These counts have already been dismissed,” he wrote in his six-page opinion. “As to counts 18-22 . . . [and all those against Carmony and Werft], the court finds there was no substantial prejudice.”

Orange County conservative Republicans were jubilant after the judge’s ruling.

Some party leaders have engaged in a verbal battle with Capizzi, also a Republican, since last December because of the investigation into the 67th Assembly District election.

“These developments are of course encouraging for anyone who believes that there is justice in our legal system,” said Orange County Republican Party Chairman Thomas A. Fuentes. “This legal prosecution of Scott Baugh has been political persecution of a conservative Republican, Christian young man.”

Also contributing to this report were Times staff writers Michael G. Wagner and Dexter Filkins.

* REACTION: County Republicans hail ruling, predict a full vindication. A15

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

17 Gone, 5 Remain

Superior Court Judge James L. Smith dismissed 17 of 22 campaign fraud counts against Assemblyman Scott R. Baugh, saying prosecutors withheld “exculpatory” information about a key witness. Here is a breakdown of the decision:

Charges Dismissed

* Three felonies: one alleged Baugh got his former campaign treasurer to lie on a report about a $1,000 cash donation; two alleged Baugh signed reports that concealed the status of loans and contributions.

* Fourteen misdemeanors: they alleged he misreported loans and contributions on campaign spending reports and illegally accepted $8,800 in cash.

Charges Remaining

* One felony: It alleges Baugh signed a falsified economic interest statement.

* Four misdemeanors: They allege he failed to disclose thousands of dollars in loans on two economic interest statements.

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“The district attorney manipulated the evidence to get an indictment, and it backfired.”

--Assemblyman Scott Baugh.

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Judge Smith “ruled on procedures in front of grand jury. This is not a determination of innocence or guilt.”

--Assistant Dist. Atty. John Conley.

What’s Next

Smith and the lawyers meet today to discuss when the remaining charges will be tried.