Don Haidl testifies he gave Michael Carona monthly cash bribes

Millionaire businessman Don Haidl testified Thursday that he bribed former Orange County Sheriff Michael S. Carona and former Assistant Sheriff George Jaramillo with cash payments of $1,000 a month each for more than three years.

Initially, the money was handed over in envelopes to the two men near the beginning of each month, usually at Haidl’s hilltop home in Newport Beach, he testified. Eventually, Haidl said, he made quarterly payments of $3,000 as it became more difficult to obtain cash on such a regular basis.

Haidl, who became one of Carona’s assistants, has been cooperating with the prosecution and is one of the government’s key witnesses in the corruption case against the former sheriff.

During Haidl’s testimony, prosecutors played portions of audiotapes that the businessman secretly recorded during conversations with the sheriff. The recordings, which were hard to hear in the courtroom, allegedly capture Carona acknowledging he took the cash payments and expressing confidence they would get away with it as long as they kept their stories straight.

Haidl agreed to tape the conversations, which are filled with racial slurs and crude language, as part of a plea deal with the government.

“He’s saying if we both get the same story, and if we both lie, we won’t get caught,” Haidl said as he interpreted one of the recorded exchanges with the sheriff.

Carona and his longtime mistress, Debra V. Hoffman, are charged with selling access to the sheriff’s office for cash and gifts. Carona’s wife also has been charged but awaits a separate trial. Haidl pleaded guilty to tax fraud and has been cooperating with the government for nearly two years. Jaramillo also pleaded guilty to tax charges and is also expected to testify against Carona.

In earlier testimony, Haidl admitted to illegally funneling at least $30,000 into Carona’s first campaign in 1998, and giving the sheriff access to his yacht and planes, and paying for vacations and other expenses. In return, he said, he was provided the full power of the Sheriff’s Department and business deals that would make him and other members of the sheriff’s inner circle rich.

On Thursday, Haidl said that the bribes he paid to Carona and Jaramillo began after the first election in 1998 and continued until 2002. He said he decided to start paying them monthly “allowances” because they seemed to be getting too excited about all the freebies they suddenly had access to once Carona was in office. He said he feared the pair’s greed might jeopardize their plan to get Carona elected to higher office.

“I was already pretty heavily invested in this thing, and I wanted it to go right,” he testified. “I wanted them to assure me that they weren’t going to go around and take lunches. . . . I didn’t want them to be politically obligated to people over a dinner.”

He said that when he was late with the monthly payments, Carona and Jaramillo would call to remind him.

With no paper trail of these payments, prosecutors are relying on statements Carona made during three meetings with Haidl in the summer of 2007 that he didn’t know were being recorded. Haidl, wearing a wire, first met with Carona at a party at the Pacific Amphitheatre on the Orange County Fairgrounds in Costa Mesa. The last two meetings were at the Bayside Restaurant in Newport Beach. Each time, arrangements were made through Carona’s wife and Haidl’s sister because Carona feared his phones were being tapped, Haidl told jurors.

During the last meeting at the Bayside, in August 2007, Haidl can be heard on tape telling Carona that he is worried because federal investigators had confiscated his business documents, dating back to the early 1990s. The two men had surmised that Jaramillo probably told the government about the cash payments, and Carona asks whether Haidl ever made copies of the serial numbers of his cash. Haidl says he didn’t.

The conversation is hard to hear over a David Bowie song blaring in the background. Jurors followed along by reading transcripts.

Haidl: “So they’re looking for cash tracing. Now this would take an army of people to go back and find how I got the cash.”

Carona: “But, if you got cash, how would they know what you did with cash?”

At a different point during this same conversation, Haidl reassures Carona that the IRS won’t pursue a criminal investigation for tax evasion for amounts that fall below $40,000, and that from his calculations, the payments he made to Carona from 1999 to 2002 fell below that threshold. He also tells Carona that cash transactions are untraceable on his end.

At another point, Carona can be heard telling Haidl that “everybody can sleep real good at night” because “the limited cash that I had, it didn’t end up in bank accounts, or, you know, cars or any of that (stuff).”

Carona appears to admit on the tapes to spending the money on Hoffman.

When she paid for hotels with her credit card, Carona told Haidl that he would reimburse her with cash. And Carona said he also paid for half of the $400 monthly rent for her law office, splitting the cost because “she needed an office and a place for us” to have sex.

Haidl can be heard expressing concern that Hoffman might talk. But Carona reassures him that Hoffman had no idea where the cash came from, and that if asked, his answer is going to be that “it came from my account.”

Haidl is expected to resume testifying today.

Hanley is a Times staff writer