A Newport Beach man's dream of getting rich by selling law enforcement officials on a high-tech device that could end high-speed chases has pulled top advisors to Orange County Sheriff Michael S. Carona into a complex tale of cash, ambition and alleged influence-peddling.
No one involved has said Carona was aware of Charles H. Gabbard's scheme to trade shares in his Mission Viejo company, CHG Technologies, for political contributions. But the growing scandal has evolved into a high-profile embarrassment for the sheriff, one of the state's rising political stars, in part because of his image as a straight-talking cop beyond reproach.
Whether the situation will affect Carona's political ambitions -- he has made no secret of his interest in a Republican run for lieutenant governor in two years -- remains to be seen. But experts believe he can ride out the storm as long as the scandal doesn't grow.
Carona has declined to discuss the case, apart from declaring that he first learned of the questionable donations by reading of them in the newspaper last week. On Friday, he asked state Atty. Gen. Bill Lockyer to investigate the matter and has pledged to give up any contributions that were improper.
Concerns about the contributions developed out of a series of separate controversies involving two of Carona's top administrators.
When Carona was first elected sheriff in 1998, he persuaded the Orange County Board of Supervisors to drop a requirement that assistant sheriffs, who are top administrators in the department, first serve at least two years as captain.
Then Carona appointed to those posts two friends: George Jaramillo -- a lawyer and former Garden Grove police lieutenant who managed Carona's campaign -- and Don Haidl, an entrepreneur who was one of Carona's top campaign fundraisers.
Problems began with the 2002 arrest of Haidl's son Gregory, who is accused with two other youths of rape. They allegedly videotaped themselves having sex with an unconscious girl during a party at his father's Newport Beach home.
As Newport Beach detectives were quizzing the younger Haidl at his mother's Rancho Cucamonga home, Jaramillo, who was second in command of the 4,200-member Sheriff's Department, appeared in uniform to advise the teenager not to speak with investigators, prompting complaints from Newport Beach police.
In October 2003, sheriff's deputies caught the younger Haidl and two friends allegedly in possession of a small amount of marijuana.
Deputies did not arrest him on suspicion of drug possession, which could have led to revocation of his bail, but instead drove him home. That night, in a phone conversation that was recorded, a sheriff's lieutenant woke Jaramillo to tell him what had happened.
Jaramillo and the lieutenant agreed not to record the incident in the activity log in hopes that the news media would not learn about it.
That recording became a key part of a probe by the Orange County Grand Jury, which was asked to determine if Jaramillo and other sheriff's officials obstructed justice by giving Gregory Haidl preferential treatment.
On March 17, Carona, citing no specific reason, fired Jaramillo.
Shortly thereafter, FBI officials acknowledged that they had opened an investigation into political corruption involving Jaramillo; on March 20 agents removed unspecified evidence from his office.
Last week, Gabbard's lawyer added yet another twist, revealing that the inventor's company had paid $25,000 to Jaramillo and his wife for work in 2000 and 2001 as consultants.
Jaramillo agreed to help open doors for the company among law-enforcement officials, lawyer John Gladych said, so long as doing so did not compromise his duties with the Sheriff's Department.
Gladych then disclosed that the company, which hoped to strike it rich with a laser device that officers could use to safely shut down the engine of a speeding car, also contributed heavily to Carona's 2002 reelection campaign using methods that raise both ethical and legal questions.
He said the company asked up to 40 investors to allow $1,000 of their stake in the company to be diverted to the Carona campaign -- in some cases in exchange for shares in the company.
Several investors contacted by The Times confirmed this account, although some said their money was diverted without their knowledge.
The company also paid at least $45,000 for a birthday party and fundraiser for Carona, Gladych said, although no record of this expense on the campaign's behalf is in the sheriff's contribution reports.
Although many, if not all, of the individual campaign investors' donations were reported, the company's expense for the birthday party was not.
Gabbard, 67, and his live-in partner, Toni Van Schultze, met with an FBI agent in February and discussed their business association with Jaramillo, said CHG attorney Michael C. Olson.
In addition to Gabbard, the key figures in the controversy include Jaramillo's wife, fundraiser Lisa Jaramillo, and Robert Levy, an Orange County lobbyist.