Stinging Surprise : 2 Who Passed $12,000 to Campaigns From Phony FBI Firm Deny Knowing of Operation

SACRAMENTO — An FBI dummy corporation funneled nearly $12,000 in campaign contributions to Assembly Speaker Willie Brown and two others through a pair of intermediaries who said Wednesday they were unaware they were participating in a federal sting operation.

Peter Lauwerys, director of a Sacramento consulting firm called Northern California Research Associates, said he wrote checks to Brown, Assemblywoman Gwen Moore (D-Los Angeles) and her aide, Tyrone Netters, at the direction of Darryl Freeman, a lobbyist for a bogus company set up by the FBI.

“I trusted he (Freeman) knew what he was doing,” Lauwerys said. “He had the political contacts. He had credibility. It seems now, in retrospect, that the FBI was buying credibility through him. He was getting used, I see, and we were getting used. . . . I was naive. I will never do that again.

“Clearly, we were used and misused.”

State law requires campaign donors to report the true source of a political contribution. According to state records, none of the donors nor recipients ever reported that the money contributed by Lauwerys’ firm came from Gulf Shrimp Fisheries Inc., a dummy company set up by the FBI. In the case of the lawmakers and legislative aide, there is no indication that they knew it came from Gulf Shrimp.

Freeman, breaking a weeklong silence on his role in the sting, acknowledged Wednesday that he lobbied for the dummy company--and even helped it get a $100,000 loan. But he said he did not know he was taking part in an FBI operation aimed at exposing political corruption in the state Legislature.

Moore, who ultimately carried two bills for the FBI’s bogus companies, is under investigation along with Netters, federal sources say. Moore, who reported receiving $3,500 from Northern California Research, has denied any wrongdoing in the case. Netters has refused to comment.

Brown, who has not been implicated in the sting, had no idea that Gulf Shrimp Fisheries was the source of $6,500 he accepted from the research company, said Susan Jetton, a spokeswoman for the San Francisco Democrat.

In May, the Speaker received $4,000 from another FBI dummy firm, Peach State Capitol Inc. at a $1,000-a-plate fund-raising dinner in San Francisco, Jetton said. Netters made the reservation for Peach State’s four seats at the dinner.

In all, Lauwerys said, he received more than $34,000 as part of a consulting agreement with Freeman, who was lobbying in 1986 for the FBI dummy firm Gulf Shrimp Fisheries.

At Freeman’s direction, Lauwerys said, he gave $10,000 in campaign contributions to Brown and Moore and a $1,900 contribution to Netters. He lent Netters’ campaign fund $4,200 and paid him consulting fees twice.

He also paid back $10,000 to Freeman and kept about $4,000 in payment for Freeman’s office expenses. Freeman, a former legislative aide, was an associate of Lauwerys’ firm and used the office in 1986.

“I felt awkward at the time,” Lauwerys said. “But I trusted Darryl knew what he was doing. He was moving in the halls of the Capitol, not me. It seemed like very large sums of money.”

Lauwerys said that if he had known Gulf Shrimp was an FBI dummy corporation, “I wouldn’t have dealt with it.”

Freeman said in a brief interview that he also knew nothing of the investigation until he learned that FBI agents had raided the Capitol offices of Moore and three other legislators last week.

“I was as shocked as everybody else,” Freeman said. “I hadn’t heard from them (Gulf Shrimp “executives”) in two years.”

Freeman said he was hired in 1986 by Gulf Shrimp to promote a bill that would have benefited the “firm” by allowing it to raise money through the sale of industrial development bonds. He also helped the “company” obtain a $100,000 loan.

Federal sources confirmed that Freeman was not an FBI informant but said he could be a subject of the investigation.

Freeman said he has not been contacted by federal agents since the sting became public.

Freeman’s role in the sting has been a mystery, particularly since the revelation that John Shahabian, a Senate Elections Committee consultant, worked under cover for two years assisting the FBI. Shahabian himself was “stung” by the FBI, according to his attorney, Donald Heller.

One source familiar with the early days of the Gulf Shrimp operation identified Sacramento developer Marvin Levin as the intermediary who introduced undercover FBI agents to both Freeman and Shahabian.

Levin, manager of the Lighthouse Marina project in West Sacramento, said he “vaguely knew some of the people several years back,” including Freeman. But he said, “As far as I know, I didn’t have a role.”

Freeman first had dealings with the undercover FBI operation in late 1985 or early 1986 when he helped the front “company” obtain the $100,000 loan. At the time, he headed Superior Valley Small Business Development Corp., a state-funded corporation established to guarantee loans to help small businesses start up or expand.

“They came up with all of the paper work they needed, so we guaranteed the loan,” Freeman said.

Under Freeman’s leadership, Superior Valley became involved in so many bad investments that its board of directors sought Freeman’s resignation. Contributing to this story were Times staff writers Paul Jacobs, Glenn Bunting, Ralph Frammolino and Daniel M. Weintraub.