Ex-Coastal Panel Official Faces Prison

A dispute over an unpaid debt has returned legal attention to the largest political corruption scandal in recent California history.

Federal probation officials are trying to put former state Coastal Commissioner Mark L. Nathanson, who pleaded guilty to racketeering and tax evasion in 1993, back behind bars if he doesn’t repay a developer from whom he extorted money.

Nathanson, 60, was released from prison almost three years ago after a federal judge cut his sentence by about 12 months. But Nathanson’s failure to make the restitution payment has raised questions about his willingness to cooperate with government agents.

Among other things, the dispute led a Sacramento newspaper to petition the court to open previously sealed documents about the case. That prompted a federal judge to unseal some of the records, shedding new light on the high-profile corruption case that had its roots in an undercover FBI sting operation in the Capitol in the late 1980s.

Dubbed “coastal commissioner to the stars,” the onetime Beverly Hills real estate agent was among the most powerful nonelected state officials in California and had strong ties to then-Assembly Speaker Willie Brown. In 1993, Nathanson pleaded guilty to federal charges that he used his public office to extort payments from Hollywood celebrities and others seeking permits to build along the coast. The wide-ranging corruption probe led to the conviction of 14 people, including five legislators.

Nathanson, 60, was sentenced to four years and nine months in U.S. prison. As part of his plea deal, he agreed to cooperate with authorities.

In two letters, Nathanson’s attorneys offered details of their client’s dealings with major developers and California politicians and efforts to win coastal construction permits. (Censored versions of the letters recently were made public as a result of the case brought by the Sacramento Bee.)

Three years later, U.S. District Judge Lawrence Karlton cut the prison sentence by a year, allowing Nathanson to leave a halfway house in 1997. Federal prosecutors made the request “in light of assistance [Nathanson] has provided to the government,” as well as concern about a skin condition, according to a government motion.

But that was not the last chapter.

Last August, federal authorities petitioned to revoke Nathanson’s probation, citing his failure to pay $115,000 to developer Jack Naiman. Nathanson declined to comment, but his attorney, Clyde Blackmon, disputed the government’s figures. “We’re hoping we can resolve it without a hearing,” the lawyer said.

The probation filing caught the eye of Sacramento Bee reporter Denny Walsh, who also noticed that some documents in the case had been filed under seal.

Bee attorney Charity Kenyon, in a letter to Judge Karlton, said: “Neither the government’s 1996 motion to reduce the sentence nor the court’s order reducing the sentence contains any information about the basis for the substantial reduction of Mr. Nathanson’s sentence.”

She argued that the government had not made a case to deny the public access to the records. Federal prosecutors countered that the material was found to be untrue and should not be released.

Karlton eventually released versions of the letters detailing Nathanson’s dealings with movers and shakers but had their names blacked out. The letters describe aggressive fund-raising but not necessarily illegal actions.

In a hearing in November, the judge commented on the letters and seized the opportunity to criticize plea bargains.

“This matter, at least potentially, is newsworthy, if not so much for the content as for the demonstration of how corrupted our criminal system has become by virtue of the system of bribing people to rat on others,” Karlton said.

“It contains unverified and apparently, according to the government, unverifiable accusations against high government officials. And what it probably reflects, more than anything, is Mr. Nathanson’s desperation.”