By Helga Gendell
Part XXVII of the Marina del Rey history series continues to address news reports of the legal ramifications of then state Sens. Joseph B. Montoya and Alan Robbins as well as the investigation for alleged extortion against Mark Nathanson, a real estate investor and former member of the California Coastal Commission and county Small Craft Harbor Commission.
Part XXVI concluded with an Oct. 1, 1990 Los Angeles Times article by reporters Paul Jacobs and Mark Gladstone about the investigation of Nathanson by the FBI for the alleged extortion of a San Diego businessman.
In a Sept. 20, 1991 Los Angeles Times article titled “Robbins-Led Venture Seeks Bankruptcy,” reporters Jack Cheevers and Gladstone wrote, “A real estate partnership led by Sen. Alan Robbins (D-Van Nuys) has filed for bankruptcy, listing $7.6 million in debts to prominent Los Angeles developers, lawyers and banks.
“The partnership’s biggest single debt is $3.4 million to an Encino bank linked to the scandal-ridden Bank of Credit & Commerce International.
“Robbins is the majority partner in Marina East Holding Partnership, which filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code. His only partner in the venture is Los Angeles attorney Marvin Kay, a close friend.”
The Times article continued, “Marina East’s lawyer, Lawrence A. Diamant, said the bankruptcy filing was triggered in part by the sluggish economy, which has slowed development of a massive Venice commercial and residential project in which Marina East has a big financial stake.
“The $400-million project, called Channel Gateway, includes more than 1,000 living units along with an office building containing 314,000 square feet of space. Robbins, who has grown wealthy developing offices, medical buildings and apartment complexes in Los Angeles and Ventura counties, said the bankruptcy has not seriously harmed his personal finances.
“According to documents filed in support of the bankruptcy petition, Marina East’s largest creditor is Independence Bank of Encino, the San Fernando Valley’s biggest commercial bank,” reported the Times article.
“Federal bank regulators this week imposed $37 million in fines on Saudi Arabian financier Ghaith Pharaon for concealing his 1985 acquisitions of Independence on behalf of Luxembourg-based BCCI.
“According to public records, Robbins and Marina East have received at least two loans totaling more than $7 million from Independence.”
The Times article continues, “Marina East made Independence a partner in 1990 as a security for the loan on which Marina East still owes $3.4 million, according to bankruptcy papers. The loan is accumulating interest of more than $1,000 per day.
“According to Los Angeles County property records, Independence also loaned Robbins personally up to $3.6 million in 1989. That loan was secured by property held by Marina East, records said. Robbins said the loan had been repaid, the Times reported.
[The following article on Montoya cites portions of the full story germane to the subject.]
In a Sept. 21, 1991 Los Angeles Times article titled “5 Extortion Verdicts Against Montoya Upset,” reporters Richard C. Paddock and Paul Jacobs wrote, “In a setback for the FBI’s corruption probe in the state Capitol, a federal court of appeals overturned the conviction of former Sen. Joseph B. Montoya on five counts of extortion.
“The U.S. 9th Circuit Court of Appeals ruled that the jury received flawed instructions on the federal extortion law, but upheld Montoya’s conviction on two remaining counts of racketeering and money laundering. The court refused to release Montoya from prison but ordered the trial judge to consider reducing the Whittier Democrat’s 6 ‡-year prison sentence.”
The Times article continues, “‘We are pleased that the five extortion convictions have been reversed,’” said Jan Lawrence Handzlik, Montoya’s attorney. “‘Extortion requires something more than the receipt of voluntary campaign contributions by an elected official. We continue to believe that the two remaining convictions should be reversed.’
“The court ruling casts a shadow over the six-year investigation that resulted last year in the guilty verdict against Montoya and, in a separate trial, the conviction of former Sen. Paul Carpenter on charges of extortion, racketeering and conspiracy.
“The decision, which applies a higher standard of proof in extortion cases, could lead to a reversal of Carpenter’s conviction and, according to legal experts, make it tougher to bring charges against three other state legislators under investigation: Sen. Alan Robbins (D-Tarzana), Assemblyman Pat Nolan (R-Glendale) and Sen. Frank Hill (R-Whittier),” stated the Times article.
“In essence, the appellate panel found that the trial judge had failed to instruct the jury that Montoya could be found guilty of extortion only if there was an explicit promise to act in exchange for a payment.
“The court’s decision to throw out Montoya’s conviction on all five extortion counts stems from a ruling of the U.S. Supreme Court this year in the case of McCormick vs. the United States that changed the standard required for conviction in federal extortion cases.
“The Supreme Court ruled that, in order to convict a lawmaker, a jury must find there was ‘an explicit promise or undertaking by the official to perform or not perform an official act.’ In other words, public officials could only be found guilty of extortion if there had been a quid pro quo — a deal in which the official promised to take action in return for a payment.
“In Montoya’s trial — which took place before the McCormick case was decided — Judge Milton L. Schwartz instructed the jury that they did not have to find such an explicit promise,” reported the Times article.
“Despite its ruling, the appellate court indicated that Montoya’s conviction on at least some of the extortion cases would have been upheld even with the new standard for jury instructions established by the McCormick case.
“‘Our review of the evidence indicates there was sufficient evidence from which a jury could have found beyond a reasonable doubt that the payment was made in exchange for a promise of official action,’ said the court. ‘The deficiency is that the jury was not required by the instructions to make such a determination.’”
The Times article continued, “That finding gave some comfort to prosecutors as they contemplate retrying Montoya and bringing similar corruption charges against other legislators. ‘We think the Montoya decision has demonstrated loudly and clearly that California lawmakers can be prosecuted on racketeering and money-laundering charges and on (federal) extortion if the jury is properly instructed,’ O’Connell said.
“On a separate issue, the appellate court went even further than the U.S. Supreme Court, which had applied the tougher standard for an extortion case only to political campaign contributions.
“The three-judge panel ruled that the requirement of an explicit quid pro quo also applies to honorariums, saying there was ‘no rational distinction’ between campaign contributions — which can only be used for political purposes — and honorariums, which go directly into the lawmakers’ pockets,” according to the Times article.
A Nov. 20, 1991 New York Times article titled “State Senator From California Facing Racketeering Charges” reported, “A long-standing federal inquiry into corruption among California officials led to the filing of racketeering charges against a powerful state senator, who immediately issued a letter of resignation in which he admitted breaking the law.
“In a complaint filed by United States Attorney George O’Connell, state Sen. Alan Robbins was charged with allegedly extorting money from special interests, engaging in obstruction of justice and filing a false tax return.
The New York Times article continued, “Mr. Robbins, a 48-year-old Democrat from Van Nuys, became the third current or former member of the State Senate to face federal charges in the last two-and-a-half years. Joseph Montoya, who was chairman of the Senate Business and Professions Committee when he was convicted in April 1990 of racketeering, extortion and money laundering, is now serving a sentence of six-and-a-half years at a federal prison camp.
“And former state Sen. Paul Carpenter is free pending appeal of his racketeering, extortion and conspiracy convictions. Before his resignation today, Mr. [Alan] Robbins was chairman of the Insurance Committee, one of the most powerful panels in the State Senate and a lever for campaign contributions from such special interests as insurers and lawyers,” according to the New York Times article.
“The federal complaint charged that Mr. Robbins had taken legislative action in return for money on three occasions and, in a separate episode, had used his office from 1987 to 1989 ‘to extort for himself and another public official more than $200,000 from a California developer.’ Neither the other official nor the developer was identified.”
The New York Times article continues, “The government said Mr. Robbins had also tried to obstruct justice by asking a grand-jury witness to lie and had failed to report $52,800 in income on his federal income tax return.
“Mr. O’Connell, the United States attorney, said the defendant had cooperated with investigators and intended to plead guilty. Prosecutors said charges against other officials were likely.
“In his letter of resignation from the Senate, Mr. Robbins said, ‘After practicing both self-denial and public denial, I came to the conclusion that it was time to drop the shield of pretense and recognize that a number of actions I had taken as senator failed to meet the standards of law,’” reported the New York Times article.
In a Dec. 10, 1991 Los Angeles Times article titled, “Capitol Probe Shifts to Coastal Commissioner,” reporters Paul Jacobs and Mark Gladstone (with contributions by staff writer Robert W. Stewart) wrote, “The political corruption investigation that led to the resignation of Sen. Alan Robbins last month is now focused on one of the most influential non-elected public officials in the state, Mark L. Nathanson, a tough, combative member of the California Coastal Commission with strong ties to Assembly Speaker Willie Brown.
“A Beverly Hills real estate broker and business consultant, Nathanson is the unnamed ‘public official’ cited in charges against Robbins in the extortion of more than $200,000 from a San Diego hotel developer, sources familiar with the investigation told The Times.
“Nathanson has not been charged and through his attorney, has denied any impropriety. Nathanson is unique among those targeted by federal authorities — the first political appointee to undergo FBI scrutiny since the investigation began in the Capitol six years ago.
“The targeting of Nathanson, as well as the recent search of a prominent lobbyist’s office, signals that investigators have moved beyond their original objective of exposing and prosecuting corrupt lawmakers and legislative aides,” stated the Times article.
“U.S. Attorney George O’Connell and his investigators are following the probe wherever it leads them — even if it takes them outside Capitol corridors to the offices of lobbyists or the meeting rooms of appointed boards and commissions.
“In this instance, the investigation has led authorities to a man never elected to office, a brash, gun-toting political fundraiser who owes his public career to friends in high places,” reported the Times.
“Appointed to a series of state and local positions, Nathanson has been dogged periodically with questions about his conduct in office in a public career that spans almost three decades.
“It was the speaker of the Assembly, a liberal San Francisco Democrat, who placed Republican Nathanson on the Coastal Commission in 1986 — despite the fact that Nathanson had pleaded no contest to a misdemeanor attempt theft charge after being accused of taking a cash bribe in a West Hollywood parking lot 12 years earlier,” stated the Times article.
“Brown has said he was unaware of the incident at the time of the appointment and, when it was called to his attention, he dismissed it as too long ago to be relevant.
“Nathanson is one of four Brown appointees on the 12-member coastal panel, which regulates real estate development along 1,100 miles of California shoreline — a job of potentially enormous environmental and economic consequence.”