A long and complex investigation by the FBI into the financial affairs of certain California legislators has become absorbed with what lobbyists here call "the Howard Hughes connection."
Though not the top priority of the investigation, which is expected to result in indictments of at least a half-dozen present and former legislators, the trail of hundreds of thousands of dollars from the Hughes financial empire into the coffers of California politicians has intrigued and perplexed federal investigators.
Last week, as a special federal grand jury began sifting the results of the year-long investigation, federal sources told The Washington Post that information about the Hughes connection will be presented "well before the end" of the jury's 18-month term.
It is known that Hughes interests poured what one legislator called "a wheelbarrow of money" into a political system which has a high reputation for integrity. It is unclear what Hughes expected to buy for this, if anything. No known big-money Hughes bills have been placed before the California Legislature, though organizations formed by the late financier own hundreds of millions of dollars worth of businesses and property throughout the state that are affected by the zoning and planning decisions of local government.
Though the stated purpose of the investigation is "official corruption" in California, the inquiry has national implications.
Already it has three times delayed anouncement of the appointment of Los Angeles lawyer-banker Charles T. Manatt as national finance chairman of the Democratic Party. In an hour-long interview Manatt, who unofficaally is performing the finance chairman's duties, acknowledged that the announcement had been scheduled and postponed but said he expected to be named when the Democratic National Committee meets June 9.
Manatt said his name had been mentioned in connection with the investigation because of his long friendship with Donald Kent BrOwn, a $96,000-a-year lobbyist who represents Hughes interests Summa Corp. and Hughes Airwest in Sacramento.
BrOwn - who capitalizes the "O" because he was mistakenly arrested in a rape case involving another Don Brown - is a target of the investigation, according to federal sources. He was hired as Hughes' lobbyist in 1972 by Washington, D.C., publicist Robert F. Bennett, who until early this year worked for Summa Corp.
"I know of no reason to believe Mr. BrOwn's going to be indicted," said Vigo (Chip) Neilsen, his attorney. "I do know that everybody thinks he's going to be indicted."
Stung by the investigation, which has reportedly cost him the lobbying business of Standard Oil of Ohio (Sohio) and perhaps other clients, BrOwn refuses to discuss it with reporters. He recently hired a well-known Sacramento criminal lawyer, Michael Sands.
Federal investigators long have been interested in the campaign money trail of Hughes, who gave huge sums to Richard Nixon and other presidential candidates. In 1975, former top aide Robert A. Maheu testified that Hughes often boasted that he could buy various politicians.
That same year a new campaign spending law in California outlawed the long-standing practice of lobbyists' contributions to political candidates. For the previous year, Hughes filed a personal statement in which campaign donations of $105,550 were listed to "Donald Kent BrOwn Committee." BrOwn distributed the mony to 88 candidates and political committees, usually in contributions of $1,000.
This largesse bothered some of the recipient legislators, though not so much that they refused it.
"I could never find out why he was donating the money," a Democratic legislator said. "There were no Hughes bills that I knew of before the legislature."
Since Hughes' death in 1976, contributions have been made by the Hughes Organization Political Action Committee (HOPAC).
Manatt's name came up early in the investigation because of his friendship with BrOwn, who was involved with him in the chartering of two southern California banks. Over the years, Manatt said BrOwn referred between five and ten clients to him for representation in bank charters.
This is no inconsiderable amount of business. Manatt has been known to charge as much as $25,000 merely for initial consulting services in bank charters. He is considered one of the top bank-charter attorneys in the state and the one with the best political connections.
Without apparent bitterness, Manatt discussed in detail what he said had become "a self-fulfilling prophecy" in the FBI investigation. He said FBI sources told him a month ago that he was not a target in the probe. Sacramento Bee reporter John Berthelsen's "conspiracy theory" that Hughes bought politicians in California has sparked the investigation, Manatt said, and his acknowledged friendship with BrOwn did the rest.
"You can't undo a relationship of 15 years," Manatt said in an interview in his Century City office suite. He expressed confidence that he would be vindicated by the grand jury.
A smilar expression of confidence came from another friend of BrOwn, Los Angeles political publicist Joe Cerrell, whose name has been mentioned frequently in the investigation.
Cerrell, whose accounts include a former consultancy to the Hughes organization, said he had "nothing to hide" and would welcome any inquiry. Both Manatt and Cerrell said they had not been questioned by the FBI.
But the FBI did talk to virtually every major lobbyist in Sacramento, and to many legislators. More than a score of these lobbyists and legislators discussed the FBI interviews with The Washington Post on condition that their names not be used.
All the lobbyists and legislators said they had been questioned extensively about Donald Kent BrOwn. A number said they also were asked about Manatt and Cerrell, though in less detail.
The account painted by many legislators and lobbyists of the investigation is not a flattering one. The most recurring complaint: federal agents were ignorant of what was legal under California law.
For example, an FBI agent thought a legislator was admitting a crime when he freely acknowledge campaign contributions from corporations. These contributions are legal for state officeholders although prohibited in federal campaigns.
The FBI has investigated under authority of the Racketerring-Influenced Corrupt Organizations (RICO) section of the Safe Streets Act of 1970, which makes commission of two or more state felonies involving the same enterprise a federal crime. In some cases this authorizes federal prosecution of crimes as much as 20 years old - beyond the state statute of limitations for the same offenses.