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Mystery Surrounds Suit Against O.C. Consultants : Courts: Sealed documents allege deceptive fund-raising tactics. Lawyers for the pair dismiss the allegations.

November 20, 1994|TRACY WEBER | TIMES STAFF WRITER

For four years, hundreds of pleadings, motions and depositions taken in a politically sensitive civil suit--enough to fill a pair of three-drawer filing cabinets--have been hidden away in an off-limits room in the basement of the Orange County Superior Court in Santa Ana.

No one seems to know who ordered the suit concealed from public view, or why. No one can find the court order declaring it secret. Even the attorneys cannot--or will not--say how it became sealed.

But documents that have surfaced elsewhere reveal that the sealed records contain accusations that millions of dollars collected from civic-minded Californians by political action committees were transferred to another organization that has never publicly disclosed how the money was spent.

Also sealed from public scrutiny are charges that two controversial and powerful Newport Beach political consultants arranged to be paid nearly half the donated millions as their fees. And the files allude to criminal investigations of certain unnamed defendants.

The adversary of these well-connected political consultants is a shy, 45-year-old accountant from Sherman Oaks, determined in his fight to bring certain matters to light, while his legal battle to do so is inexplicably kept in the dark.

The secret case has been reassigned to at least five different judges, and at least once to a special litigation panel of Superior Court judges when the case became overwhelmingly complex.

And decisions in the lawsuit have bounced up to the Court of Appeal so frequently--at least five times--that when the case was sent back to Superior Court last year, the justices wrote, "If we could issue frequent flyer miles, these (lawsuit) parties would qualify for a free trip somewhere."

Despite repeated attempts by the two principal defendants, William Butcher and Arnold Forde, to get the lawsuit thrown out, the long-secret suit is scheduled to go to trial in Orange County Superior Court on Monday before a judge without a jury.

Two judges who have presided over the case acknowledge that all documents relating to the lawsuit have been sealed, even though the California Supreme Court has long held "there can be no doubt that court records are public records, available to the public in general."

"It's extraordinary," said Gary Phillips, the plaintiff's attorney, whose partner accidentally discovered 2 1/2 years ago that the entire case file had been sealed in 1990. "I have no explanation for it. . . . Somebody doesn't want public scrutiny and I don't know who or how this happened."

David Elson, the attorney for Butcher and Forde, said he does not "recall that I filed a motion to seal it." He speculated that the suit might have been sealed because the plaintiff would be gaining access to "all sorts of information not generally available to the public."

But local legal experts say they've never heard of a case involving these types of allegations being totally sealed from the public. Sealed records, they say, are much more routine in civil cases involving such things as children and family disputes, trade secrets and defective products.

While the Superior Court records remain secret, some details of the 6-year-old suit can be gleaned from a nearly three-foot thick appeal file taken in 1992 to the Court of Appeal in Santa Ana, which declined to seal its files.

The appellate court records provide a glimpse into the lucrative world of direct-mail fund raising, where campaign consultants like Butcher and Forde, the architects of Howard Jarvis' Proposition 13 campaign, can charge up to 25 cents for each of the hundreds of thousands of solicitation letters mailed to potential donors during a typical campaign. Other fees can net them millions more.

The files also tell the story of Paul McCauley, the Sherman Oaks accountant who took on Butcher and Forde after he discovered that the California Tax Reduction Movement, the organization they co-founded with Jarvis in the wake of Proposition 13, was not registered with California's secretary of state.

Nor had the group publicly disclosed how it had spent the millions it took in from the political action committees it had spawned--committees such as the one to dump former state Supreme Court Justice Rose Bird, or the committee to Save Prop. 13.

"I was more than a little shocked to find, here they were, the largest political fund-raiser in the state, and they had not filed a campaign statement," McCauley said in an interview. "I certainly think the public would like to know where the money went."

Under the Political Reform Act of 1974, the "receipts and expenditures in election campaigns should be fully and truthfully disclosed in order that the voters may be fully informed and improper practices may be inhibited."

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