Moreno Ally Has Charge Dropped

Citing the defendant’s cooperation, federal prosecutors Thursday took the highly unusual step of dropping extortion charges against a former Santa Ana City Council candidate who helped them crack a complex political corruption scheme orchestrated by a former councilman.

The surprise move, which both prosecutors and the judge described as extraordinary, brings to a close a case that has reverberated across the city’s political landscape for three years.

Roman Palacios, an ex-minister who faced up to 20 years in prison, will only pay a $250 fine after being allowed to plead guilty to a misdemeanor. Palacios was one of three political allies of former Councilman Ted R. Moreno who were implicated in a plot to take control of the City Council.

The activities involved shaking down businesspeople for illegal campaign contributions to fund the campaigns of Moreno and his allies. Moreno, the mastermind, was convicted of extortion and money-laundering charges in September and began a nearly five-year federal prison term this month.

Moreno’s allies--former Councilman Tony Espinoza and unsuccessful council candidate Hector Olivares--received probation after pleading guilty to felony charges.

Palacios received the lightest punishment because he provided critical information on the inner workings of the scheme, including details on how Moreno funneled the illegal contributions, Assistant U.S. Atty. John Hueston said.

“We’ve done what justice required for an extraordinary acceptance of responsibility and cooperation,” Hueston said. “Palacios is somebody who truly suffered a great deal to make amends.”

U.S. District Judge Gary Taylor agreed to the reduced sentence but commented on the rarity of such a move.

Palacios, who pleaded guilty to the extortion charge in 1998, was allowed to formally withdraw the plea Thursday. He then pleaded guilty to the misdemeanor charge of “depriving citizens a right or privilege secured or protected by the U.S. Constitution.”

At his sentencing in January, Moreno made a tearful speech in which he said the goal of his scheme was to keep gays out of the city. He said he sought money from an FBI informant so he could gain a majority on the City Council and stop what he saw as Santa Ana’s moral decline. Moreno said he feared Santa Ana’s multimillion-dollar effort to convert portions of its struggling downtown into an arts district would attract gays and lesbians.

Moreno admitted he “went down the wrong road” and said he had realized his actions were misguided.