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Businessman Tells of Paying $20,000 for Montoya's Help

June 19, 1989|From United Press International

SACRAMENTO — A Colorado businessman said Sunday he had to pay $20,000 to win passage of a bill authored by state Sen. Joseph Montoya (D-Whittier) and also to pay for lavish lunches and a hotel room for a Montoya aide and a "lady friend."

Robin Kerns of Ft. Collins said he later ran out of money and refused to pay a $1,500 monthly retainer to Fred Shanbour, a lobbyist recommended by Montoya. As a result, he said, the law he wanted passed is now due to expire in the next two or three years.

Kerns and his business partner, C.H. Carter, were flown to Sacramento at government expense and interviewed for more than three hours Friday by an FBI agent and federal prosecutor investigating Montoya and his relationship to various lobbyists.

The Internal Revenue Service is also participating in the investigation.

Montoya, chairman of the Senate Business and Professions Committee, and a former top aide, Amiel Jaramillo, were indicted May 17 on 12 counts of racketeering, extortion and money laundering.

They have pleaded innocent. Their attorneys were unavailable Sunday.

"It's quite a game out there," Kerns said in a telephone interview from his home. "It stinks. I thought we were doing what we had to do legally. We were told we had to do things for people to show some token of good faith. I didn't think it was right to hold a gun to our head."

Assistant U.S. Atty. John Panneton, who is working on the investigation, declined to comment. "We don't talk about matters until they are in court," he said.

At one point, Kerns said, he attended a legislative hearing on his bill in San Francisco. Shanbour "suggested highly we pick up the tab for lunch as good will" for Montoya and his staff, he said, adding that he was shocked by a bill that came to several hundred dollars, as his seven luncheon guests ordered lavishly.

Kerns also said he paid, at Shanbour's suggestion, for a room at a swank San Francisco hotel for a Montoya aide and what he called a "lady friend."

Kerns and Carter were among a group that operated International Hair Runner Inc., which wanted to sell motor homes converted to beauty shops to serve elderly and handicapped customers unable to travel to a conventional shop.

Advice From Board

The state Board of Cosmetology told him he needed a law to allow his mobile beauty shops to operate in California.

He said he wrote to every legislator seeking an author.

Jaramillo responded in a phone call, Kerns said, and he flew to Sacramento to meet Montoya, who immediately told him to hire a lobbyist.

"The next thing I knew this lobbyist was sitting in the office," Kerns said, describing his introduction to Shanbour.

He said Shanbour told him over coffee in the Capitol cafeteria he was the only lobbyist who could guarantee passage of the bill. Later, at a cosmetology board meeting in Monterey, Shanbour asked him for $25,000 for his services, he said.

Money for Contributions

Kerns said he later negotiated a $15,000 fee. He said Shanbour also wanted $5,000 in cash to be distributed in campaign contributions.

Kerns said he balked at paying cash. He wrote $3,900 in checks, which was distributed to 13 lawmakers, including Montoya, as campaign contributions and paid Shanbour another $1,100 in currency for what Shanbour called "extra expenses."

"I don't know what happened to that money, or who got it," Kerns said.

Shanbour, reached at his Fountain Valley home, corroborated the amounts stated by Kerns, but he insisted everything was handled legally.

"I never, never, never took any cash, period," he said.

He said he did not remember suggesting that Kerns pay for a hotel room for a Montoya aide.

List of Lobbyists

Shanbour also said he understood that Montoya had given Kerns a list of three lobbyists from which to choose, including himself and David Kim. He said he met Kerns during his initial trip to Sacramento because he happened to be in Montoya's office on another matter.

The $1,100, Shanbour said, was given to him in the form of a check and was to pay his son for "leg work" on Kerns' bill.

Kerns said his bill sailed smoothly through the Senate without a negative vote, but ran into some trouble in the Assembly. It finally won passage with an amendment.

In the meantime, Kerns said, he and his partners had run out of money, largely because of the expense of winning passage of the bill.

He said he refused Shanbour's request for a $1,500 monthly retainer to watch legislative activity that might affect his business.

Later, he learned his motor home beauty salon law, won with $20,000 in lobbying fees and campaign contributions, will expire under what legislators call a sunset provision.

Kerns said he helped with passage of laws and regulations in 13 states "without any hassles.

"I got the law amended in Colorado and I didn't need no senator and I didn't need no lobbyist," Kerns said. "They realized it was the correct thing to do."

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