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California State Senator Goes On Trial in Corruption Case

December 4, 1989

SACRAMENTO, Calif. (AP) _ A powerful state senator goes on trial today amid strong indications that the federal corruption investigation that led to his indictment could result in charges against two other lawmakers.

State Sen. Joe Montoya, who chairs the Senate Business and Professions Committee, has pleaded innocent to 12 felony counts that accuse him of racketeering, extortion, bribery and money laundering. Among the alleged victims of his shakedown efforts: actor Ed Asner.

If convicted, Montoya faces a maximum of 220 years in prison and more than $3 million in fines.

The Democrat from the Los Angeles suburb of El Monte, who’s been in the Legislature for 17 years, is the first person to be tried as a result of an investigation that began in 1985.

The investigation included agents who posed as Alabama businessmen seeking a bill to aid a shrimp-importing company they hoped to establish, and a Senate aide who cooperated with the agents by wearing a hidden recording device. The bill was eventually passed, but Gov. George Deukmejian, who had been tipped off by the FBI, vetoed it.

The probe became public in dramatic fashion in August 1988, when 30 federal agents raided the Capitol offices of Montoya, three other lawmakers and their aides. There were reports that during the raid, aides in some offices shredded documents and erased sensitive computer information.

Besides Montoya, one of his former aides, an Assembly aide, a former Yolo County sheriff and a former undersheriff have also been charged. And while prosecutors are saying little about the investigation, a plea bargain reached last week could mean at least two other lawmakers will face charges.

Karin Watson, a key aide to Assembly Republicans, pleaded guilty Tuesday to one extortion count and agreed to help prosecutors. That development could spell trouble for the two Republican Assembly members whose offices were searched 15 months ago, Pat Nolan of Glendale and Frank Hill of Whittier.

According to papers filed in the case, Watson played a key role in setting up two meetings in June 1988 at which $12,500 was paid to an undercover agent. News articles have linked Nolan and Hill to those meetings. Both have denied wrongdoing.

Montoya’s attorney, Michael Sands, refused to discuss the case last week. But Sands said in an earlier interview that he was ″convinced that Montoya’s position can be sustained.″

According to Senate aides, defense attorneys have subpoenaed about half the 40 members of the Senate to testify at the trial, apparently in an attempt to show that Montoya’s actions were not out of the ordinary.

Among other things, Montoya is accused of accepting a $3,000 ″honorarium″ from an undercover agent in exchange for help in getting the bill to help the fictional shrimp business through the Senate.

The charge alleging an extortion attempt against Asner stems from a 1985 meeting, at the time the popular actor, known for his roles in ″The Mary Tyler Moore Show,″ ″Lou Grant″ and ″Roots,″ was president of the Screen Actors Guild.

According to a memorandum filed by prosecutors last month, Asner and a lobbyist for the guild went to see Montoya in May 1985 to seek his vote against a bill their union opposed.

″Montoya took the two into his office and closed the door,″ the memorandum said. ″He then stated in no uncertain terms that he did not see why he should support the guild since the guild had not made financial contributions to him.″

The memo said Asner and the lobbyist were ″infuriated and disgusted″ and the meeting ended abruptly. Montoya voted against the guild’s side that afternoon, the memo added.

In another incident, prosecutors alleged, Montoya wrote letters to all California high school principals, urging them not to insure their athletes with a particular insurance company. The letters were written after the company’s owner refused to pay Montoya $10,000 for support of legislation backed by the company, the memorandum said.

A key figure in the investigation, the memorandum said, was John Shahabian, a Senate staffer who tried to extort an undercover agent and then agreed to cooperate with the FBI in exchange for lenient treatment.

In June 1988, Shahabian asked an unidentified legislator what it would take to get the shrimp legislation out of the Senate Banking and Commerce Committee, the memorandum said.

″Well, you need to make some arrangements with Joe,″ the lawmaker reportedly told Shahabian. ″What it’ll take with Joe is a little envelope.″

Later that month, Shahabian, wearing a hidden recording device, went to see Montoya. Montoya asked if the organizers of shrimp deal were ″doing well,″ and learning that they were, replied, ″OK, so they can be helpful.″

Later in the conversation, after Montoya was assured that the bill would attract little attention, Shahabian asked, ″How can we be helpful to you?″

″Either way, (campaign) contributions and/or honorariums,″ Montoya reportedly said. A luncheon meeting was set up with the undercover agent, at which time the $3,000 check was passed to Montoya, the memo said.

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