6 Counts Against Baugh Dismissed; Settlement Urged

Trying to force an end to the prosecution of Assemblyman Scott R. Baugh, a Municipal Court judge on Wednesday dismissed one-third of the campaign fraud charges against the Huntington Beach Republican and then urged both sides to settle the case by Christmas.

Judge William L. Evans withheld a final ruling on whether Baugh, 35, would have to stand trial on the remaining charges--two felony perjury counts and 10 misdemeanor violations of the Campaign Reform Act--but said it is “implicit those [charges] are going to remain.”

Baugh reacted with joy and hugged his wife, Wendy, in the courtroom.

“We are headed in the right direction,” Baugh said during a corridor news conference minutes later.

Allan Stokke, attorney for Baugh, and Assistant Dist. Atty. John Conley agreed to meet next week to discuss resolving the case. Both lawyers said they had no idea if there would be a plea bargain.

The highly unusual step by Evans, a former prosecutor, was a surprise to both sides, who had expected a final ruling in the preliminary hearing. But after dismissing the six counts--including three felonies--Evans declared that “the rights of the defendant and society . . . cries out for some resolution” short of trial in Superior Court.

Evans suggested that he could serve as the arbitrator. “It would really be in the interest of justice if I could get you to sit down and come to a resolution,” he said.

Both sides accepted his suggestion and Evans told them to report back to his court Dec. 23.

It remains unclear what role Evans would take in negotiations. A spokesman for Evans declined comment.

“None of us can predict if [Evans] will become a part of it or not,” said Stokke, adding that Evans was trying to put pressure on both sides to end the case.

“I have never seen anything like it in 30 years,” Stokke said, adding that the district attorney’s case “is not as strong as they would like you to believe.”

Conley said the judge “is clearly encouraging both sides to talk and both sides have something to talk about. Our case is basically intact.”

The judge made the proposal for a plea bargain after implying he would force Baugh to stand trial, then suggesting he could rule in favor of a motion to dismiss the case in the “interests of justice.”

Under such a motion, judges are allowed broad latitude to dismiss cases for a variety of reasons, several legal authorities said. Those motions are rarely successful.

Baugh was charged in October 1996 with five felony perjury counts and 13 misdemeanor violations of the Campaign Reform Act for allegedly falsifying five state-required financial disclosure forms related to his 1995 campaign that gave Republicans control of the California Assembly for the first time in 25 years.

While conceding that he made mistakes in campaign reporting, Baugh has maintained that he broke no laws and that the errors were largely due to bad advice and mistakes by his campaign treasurer, Dan Traxler.

The heart of the case is the prosecution’s contention that Baugh falsified several reports to hide from voters “his active involvement in placing decoy Democrat Laurie Campbell on the ballot to split the Democratic vote and help ensure his own victory over three other Republicans.”

Evans did not dismiss the two felony and three misdemeanor charges relating to that allegation.

Several longtime criminal lawyers and legal experts said they had never seen the strategy used by Evans in open court to force negotiations between prosecutors and defense lawyers.

Robert Pugsley, a professor at Southwestern College of Law in Los Angeles, said Evans must think that “this can best be resolved through a plea bargain,” adding he did not view the ruling as a Baugh victory.

“I don’t think we can read into this that the judge would jettison the rest of the case,” he said. “I don’t think it is clear-cut for either side.”

During his brief news conference, Baugh attacked Dist. Atty. Michael R. Capizzi for pressing ahead with the criminal prosecution even after a Superior Court judge in September 1996 dismissed most of the original indictment. Prosecutors refiled the bulk of the charges within a month.

Baugh also suggested that Evans wanted to penalize the district attorney’s office for over-prosecuting a minor violation of campaign rules that would best be handled by the state’s Fair Political Practices Commission.

Baugh acknowledged mistakes were made by his campaign and said that as “captain of the ship” he “would be glad to go to the FPPC and pay the fines for acts that other people did on my behalf.”

Capizzi, however, said Wednesday’s ruling validates his office’s actions and shows “there is sufficient evidence” to prosecute Baugh for deceiving voters during the 1995 campaign.

“We are still at the point that 12 charges, including two felonies, are ready to go to trial,” he said. “If someone feels being left with that potential prison sentence is a win, that is fine, but it might be indicative of the flawed judgment that created the problem to begin with.”

Michael J. Schroeder, state Republican Party chairman, hailed the judge’s ruling and said it vindicates Baugh and shows “Capizzi has been abusing his power.”

Schroeder said it make sense for Baugh and prosecutors to reach an agreement rather than go to trial.

Tom Fuentes, head of the county GOP, described the judge’s ruling as a “significant setback” for prosecutors. “This case very obviously cries out for a settlement,” he said.

Baugh’s political mentor, Rep. Dana Rohrabacher (R-Huntington Beach), issued a statement saying that prosecutors should be ashamed for bringing the charges against Baugh and that the judge “should be applauded for his courage.”

Wylie Aitken, chairman of the Democratic Foundation of Orange County, said he would be uncomfortable with a resolution that does not send a message about preserving the integrity of the election system.

“The purpose of any prosecution and any punishment is to deter that kind of conduct in the future,” he said. “I am concerned that whatever they do, the lesson should be not to tamper with democracy.”

Evans’ ruling comes nearly two years after the special election in the 67th Assembly District that recalled Republican Doris Allen and replaced her with Baugh, whose vote elevated Assemblyman Curt Pringle (R-Garden Grove) to the speakership.

The election was so critical that GOP activists and officials tried to limit the number of Republicans running and sought to recruit more Democrats to split the Democratic vote.

Three GOP aides, including one who worked on the Baugh campaign, pleaded guilty to a misdemeanor for their role in recruiting Democrat Campbell, a longtime friend of Baugh, as a spoiler candidate in the race.

Baugh has denied any role in getting Campbell to enter the contest.

Campbell was exposed as a decoy candidate and removed from the ballot a month after she filed to run. After her spoiler candidacy was revealed, prosecutors contend, Baugh had to hide his connection to her. To do that, they charge, he falsified several campaign reports to conceal a $1,000 campaign donation he received from Campbell. Campbell had given Baugh the money a week before she decided to enter the race.

Baugh returned that money in cash, then purposely omitted the contribution and its return from several campaign reports, prosecutors charge.

Stokke has said that Baugh was told erroneously by treasurer Traxler that the contribution did not have to be reported because it had been returned.

Baugh corrected the error on a campaign report filed on election day, too late for the voters to learn about his connection to Campbell, prosecutors said.

In addition to the charges stemming from the Campbell contribution, those that were not dismissed by Evans include a charge that Baugh inflated the balance in his campaign reports by lying about the dates he returned $27,000 in loans.

The remaining counts also include an allegation that he improperly used cash in his campaign, including accepting $8,800 in cash from a friend and paying Campbell in cash.

Among the dismissed charges were several relating to Baugh’s alleged illegal manipulation of campaign and personal accounts to gain a financial advantage in the campaign.

The political fallout from the case has been extensive.

In addition to the three GOP aides who pleaded guilty, GOP aide Rhonda Carmony has been charged with three felonies for her alleged role in recruiting Campbell. Carmony, the campaign manager and wife of Rohrabacher, faces trial next week. Her first trial ended in a hung jury.

One of the state’s richest and most conservative political action committees was repeatedly named in court testimony as having placed pressure on Pringle’s chief aide, Jeff Flint, and other Republicans in Orange County to get a decoy candidate on the ballot in the crucial election.

Campbell was removed from the race before election day when a Superior Court judge found she had filed falsified nominating papers.

Times correspondent Jean O. Pasco contributed to this report.