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Stuart Karl Fined for Illegal Donations

December 06, 1988|CLAUDIA LUTHER | Times Political Writer

SANTA ANA — Stuart Karl Jr., the millionaire producer of the Jane Fonda workout tapes, Monday was fined $60,000 and placed on three years' probation in a federal case that charged him with making $185,000 in illegal campaign contributions to Democratic presidential candidate Gary Hart and other candidates.

"Your honor, I regret doing these things that brought me here today," Karl told U.S. District Judge Alicemarie H. Stotler in a 30-minute hearing in Santa Ana. "No amount of time or energy will get rid of the anguish and embarrassment that I have caused my family."

Standing at the lectern with his lawyer, John W. Vardaman, Karl could not explain why he got involved in making the illegal contributions to Hart and congressional candidates in six states in 1984 and 1986.

"To be honest, I'm not sure why I did these things," said Karl, whose boyish looks and enthusiasm made him a popular figure in Hollywood circles. "You're attracted to the lure of being involved. People begin to make you feel important.

"I should have looked deeper and not done the things I did. I assume responsibility. I'm just looking to put this chapter behind me."

Karl, 35, of Newport Beach, pleaded guilty Aug. 2 to two counts of conspiring to violate federal campaign contribution laws, pledging his cooperation in an FBI investigation of illegal campaign contributions to Hart and others. Karl had been accused of concealing excessive campaign contributions through people who were later reimbursed and making corporate contributions disguised as personal contributions.

Karl also was accused of making direct payment of certain of Hart's campaign bills and disguising them as lawful services to the campaign.

Stotler could have imposed up to $275,000 in fines and five years' probation, as well as requiring community service. A probation report urged, however, that in light of Karl's cooperation with the government and his previous clean record, the fine be set at $20,000.

Karl's attorneys also had asked that the fine be limited, saying he is $1.25 million in debt, including $717,000 owed to the Internal Revenue Service for taxes assessed in 1985 and 1986. According to court documents, Karl has listed his Newport Beach home, valued at $2.2 million, for sale at $1.8 million in order to pay the IRS.

Nancy Wieben Stock, assistant U.S. attorney, did not request the court to impose a specific fine but had asked that it be "substantial." She said that while Karl "presents a financial picture that can at best be described as bleak," he had made millions in the past on his video production firm, Karl Home Video, and had great earning potential.

Judge Stotler said that Karl's "generosity has caught up with him" to cause his current financial problems. But she said she feared that the $20,000 fine recommended in Karl's sentencing report would be viewed as "almost laughable" and would send the wrong message to others regarding the seriousness of his crimes.

Under terms of an agreement reached last August, Karl was spared jail time in return for his cooperation into ongoing investigation of the campaign contribution laundering scheme involving others in the Hart campaign.

There was no indication that Hart himself was involved in the alleged laundering.

The FBI is also investigating the campaign financing activities of Laguna Beach developer David Stein, who was one of Hart's major supporters in his 1984 and 1988 campaigns.

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