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Justice Department Seeks Probe of Producer's Donations to Hart

January 27, 1988|KIM MURPHY | Times Staff Writer

The Justice Department said Tuesday that the FBI has been asked to investigate allegations that Orange County video producer Stuart Karl improperly funneled campaign contributions to Democratic presidential candidate Gary Hart in 1984 and 1988.

John Russell, a department spokesman, said Justice Department officials contacted FBI agents in Los Angeles on Monday to discuss the probe, launched in the wake of news reports that Karl secretly reimbursed his employees for contributions to Hart and put a Hart aide on his payroll in 1986 and early 1987.

Federal election law limits individual contributions to $1,000 per election and also establishes criminal penalties for hiding the true source of campaign contributions.

Reportedly Pressured Staff

Rama Middell, a former senior executive assistant at Karl's now-defunct video company, Karl-Lorimar Home Video, has told reporters that Karl asked her and other employees to donate to Hart's 1984 campaign in order to get around the $1,000 contribution limit. Other former Karl employees told reporters last week that Karl pressured workers into making contributions and then reimbursed them.

"That's illegal, if that's what in fact took place," said one Justice Department official who asked not to be identified. "That would be a violation that we would be very interested in."

However, Hart could not be held criminally liable for any of the purported contributions unless it could be established that he knew the money had been secretly funneled from an unreported source, officials said.

Russell said the investigation, requested by U.S. Atty. Robert C. Bonner in Los Angeles, is a "preliminary" probe that will focus "on whether these contributions that the employees made violated federal criminal statutes."

'No Laws Were Violated'

Bernie Schneider, general counsel for Hart's 1988 campaign, said "no laws were violated by the campaign, to my knowledge. We're looking at it, and Gary's made it very, very clear that he wants his campaigns to be conducted in not only a legal way, but at a standard that exceeds legality."

Campaign officials said they have already returned a total of $3,000 in contributions made by Karl employees, including contributions from two employees who have reportedly denied that they were reimbursed by Karl.

"We have no independent information that any of these people were reimbursed, but just to avoid the hint of impropriety, Gary said send 'em back," Schneider said.

The Federal Elections Commission has already approved a settlement Hart reached with Karl over $96,000 in services provided by Karl's company during the 1984 campaign in which Karl agreed to be reimbursed 10 cents on the dollar.

Staff writer David Lauter contributed to this story.

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