Carona Knew of Illegal Money, Donor Says

A Newport Beach businessman accused of using a stock scam to funnel illegal campaign donations to Orange County Sheriff Michael S. Carona says in legal papers that the county’s top lawman was aware of the activity.

Charles H. Gabbard, the founder of CHG Safety Technologies Inc., made the accusation in court papers filed this week in a legal battle over ownership of his company.

CHG lawyer John Gladych said Carona, among others, had to be aware of the scheme.

“There’s no way you can’t know of an illegal campaign contribution when you are handed a bunch of checks and attending parties put on by a particular company,” Gladych said Wednesday. “Let’s hear the whole story [from the sheriff], instead of him standing behind spokesmen.”

Michael J. Schroeder, a spokesman for Carona, could not be reached for comment.

The accusation in the civil case is the latest twist in the legal proceedings involving CHG and its owner, an ex-convict who dreamed of striking it rich with a laser device he designed to help police stop fleeing vehicles.

In 2000, as his company was seeking the sheriff’s endorsement of his product, Gabbard asked investors to allow $1,000 of their stake to be diverted to Carona’s campaign. In some cases, the privately held company offered investors 1,000 shares of stock in exchange for a donation to Carona.

The alleged scheme did not become public until 2004, soon after Carona fired George Jaramillo as an assistant sheriff. Jaramillo, who worked as a paid consultant to CHG while with the department, has since been charged with taking bribes and other charges related, in part, to his relationship with CHG.

Gabbard is a central prosecution witness in Jaramillo’s corruption case and was granted immunity in the alleged stock scheme in exchange for his testimony.

But the state Fair Political Practices Commission recently accused CHG of violating campaign laws more than two dozen times by steering at least $25,000 from its investors to Carona’s 2002 reelection campaign.

The commission has proposed levying up to $54,000 in penalties for the alleged violations. CHG has asked for a hearing to fight the accusations.

Gladych, the CHG lawyer, said that besides Carona, others who knew about the stock scheme included Jaramillo’s wife, Lisa, who was Carona’s campaign manager, and lobbyist Bob Levy. Those two could not be reached for comment.

“I don’t think it’s fair that CHG is forced to bear the brunt of the illegal campaign contributions when they were the result of actions by others,” Gladych said.