FBI agents in Washington and other cities yesterday began closing in on targets of a second undercover "sting" operation, one involving attempts by organized crime to influence the recent Louisiana gubernatorial election and the alleged bribery of public officials and union leaders in at least four states.
The Los Angeles Times reported in today's editions that among those alleged to be taking bribes were the lieutenant governor of Louisiana, who ran for governor last year; a second unsuccessful Democratic gubernatorial candidate in that election, and the speaker of the House in the Texas legislature.
The developments stem from a year-long Justice Department strike force operation working out of Los Angeles and ranging into Louisiana, Texas, Oklahoma and Arkansas and perhaps other states.
They follow closely on last Saturday's revelation that the FBI, through an elaborate ruse, had netted seven congressmen and one U.S. senator allegedly accepting bribes or agreeing to trade legislative favors for cash.
In the ensuing days, that investigation, code-named ABSCAM, has been revealed as one of 50 major FBI undercover operations nationwide. All represent a striking departure from traditional FBI methods of coping with organized crime and political corruption.
Law enforcement sources familiar with the investigation that surfaced yesterday said it involved the highest-level infiltration of organized crime by the FBI ever, and included the use of court-approved microphone "bugs," wiretaps and videotapes in several locations.
One of the major targets in the probe is Carlos Marcello, reputed head of organized crime in Louisiana. Through contacts with Marcello, the agents were able to determine he had "enormous" influence in a number of Louisiana agencies, one Justice Department source said.
As has been the case in a number of these undercover investigations, the FBI was able initially to penetrate the alleged criminal organizations by the use of an informant. In this probe -- code-named "Brilab" for bribery-labor -- the informant was said to be Joseph Hauser, who was convicted in 1977 in Los Angeles for a bribery-kickback scheme involving union locals and his insurance company there.
Hauser, who was free on bond pending appeal after his conviction, led the undercover agents to Marcello and others through middlemen in several cities, including Washington, sources said.
It was through Marcello that the agents reportedly were successful in discovering organized-crime influence in December's Louisiana gubernatorial race, sources said. Posing as insurance peddlers with organized-crime ties, agents were able to make payments to at least two candidates -- identified in the Times as Lt. Gov. Jimmy Fitzmorris and Louis Lambert -- in return for promising to secure state government insurance contracts if elected, according to sources.
The Los Angeles Times reported that FBI agents posed as officials of a firm affiliated with the Prudential Insurance Co. in setting up the scheme. Originally the goal was to uncover corruption in labor union insurance plans. But soon the suspect union officials led the way to Marcello and a number of political leaders in Texas, Oklahoma and Arkansas as well as Louisiana, the paper said.
As the investigation unfolded, it led to the following, according to the Times:
Payments to William Clayton, speaker of the House in Texas, in return for specifications on a state employe health insurance plan so that the firm set up by the FBI could bid successfully. Besides a $10,000 payment, Clayton was to receive regular monthly payments as long as the Prudential-affiliated firm held the contract. Prudential Insurance cooperated with the FBI in the plan.
Similar $10,000 payments to Fitzmorris and Lambert during the recent Louisiana governor's race in return for promises for future state insurance contracts.
Clayton, Fitzmorris and Lambert could not be reached for comment last night.
Payments to two Houston city officials and an official of the operating engineers union there for promised assistance in getting that city's employe insurance program.
Much of the information about the investigation surfaced in Los Angeles yesterday when U.S. District Judge Harry Pregerson announced he was removing himself from a case he had been handling because it had become enmeshed in the undercover probe.
According to a Justice Department source, the defendants in the case had asked undercover FBI agents who had infiltrated organized crime to approach the judge with a bribe. The judge was never approached in that manner, the source said, but became angered when he learned the FBI operatives had attempted to imply to the defendants that he had taken actions favorable to the defendants.
"He was upset about the way they were throwing his name around and felt it was time for it to end," the source said.
Yesterday, the judge also released documents in connection with the probe that showed thousands of dollars were spent by the FBI in the operation to pay out bribes. He did not release any names.