Federal prosecutors have obtained dozens of subpoenas -- many of them directed at state officials and records -- for an investigation of political corruption involving insurance contracts and election campaign activities in Louisiana.
In Houston, state, local and labor union officials have been subpoenaed to appear beginning Tuesday in a similar investigation there.
U.S. Attorney John Volz told reporters here that the exact number of subpoenas was "insignificant" in comparison with what will come in the weeks ahead.
A federal grand jury will convene here Thursday to begin sifting the evidence compiled in an eight-month FBI undercover investigation known as Brilab, for bribery-labor.
Much of the material gathered in the probe so far reportedly has come from FBI agents who had ingratiated themselves with reputed Mafia chieftain Carlos Marcello. Their association with Marcello over the past eight months or so was said to be one of the deepest penetrations the FBI has ever made at the top levels of organized crime.
Marcello is a 70-year-old Jefferson Parish resident whom the government has been trying to deport for the past 27 years. He reportedly became friendly with the FBI agents when they were introduced to him along with convicted insurance schemer Joseph Hauser as people looking to do business in Louisiana.
More than 12 public officials in Louisiana, including two unsuccessful Democratic candidates in last fall's gubernatorial election, are among those who have been directed to appear before the grand jury here.
Volz has also obtained subpoenas for various state campaign financing reports dating back to 1976 as well as for the records of the board of trustees that was set up last year to administer a troubled health, accident and life insurance program for Louisiana state employes.
The life insurance contract alone is said to be worth $3.5 million a year. The program is currently being handled by self-insurance.
Also subpoenaed here were outgoing Gov. Edwin Edwards, Lt. Gov. Jimmy Fitzmorris, and the chairman of the state Public Service Commission, Louis Lambert. Lambert and Fitzmorris are each said to have received $10,000 for federal undercover agents in the "sting" operation.
Fitzmorris told reporters he has never taken money in return for favorable treatment in contract awards. Lambert issued a statement saying he has violated no laws, but declining to comment further on the advice of his attorneys.
Both men were unsuccessful candidates in the governor's race last fall, which was won by U.S. Rep. David C. Treen (R-La.). Treen is to take office next month.
U.S. Attorney Volz said he called the news conference to emphasize the importance of maintaining the presumption of innocence.
"While it is true that this investigation involves possible political corruption," he said, "inferences of guilty or illicit involvement should not be made until such time as the grand jury has considered the matter and any persons charged are afforded due process of law."
Votz said he expects that other grand juries will have to be convened in addition to those in New Orleans and Houston. He estimated that the grand jury inquiry here will take several weeks.
According to the New Orleans Times Picayune, the campaign financing reports that have been subpoenaed include those of a number of political committees in New Orleans that reported getting less than some of the gubernatorial candidates said they gave those committees.
In one instance, the Southern Organization for Unified Leadership (SOUL) reported getting only $25,000 from Lambert while Lambert reported giving $55,000 to it. SOUL, which has yet to file a third and final report that was due in mid-January, also reported getting $29,000 from Lt. Gov. elect Richard Freeman while Freeman reported giving $39,000 to it.
Volz said the campaign contributions subpoenas "may well be related" to the Brilab investigation.
The government prosecutor refused to say whether any FBI money was used for purported election campaign bribes. Flanked at the news conference by L. Eades Hogue, the head of the Justice Department's New Orleans Strike Force, and by FBI agent Harold Helterhoff, he insisted however, that the government had not been out to get anyone in the investigation.
Louisiana Administration Commissioner Charles E. Roemer III, whose division set up the self-insurance program for state employes several years ago, told reporters in Baton Rouge that he met last fall with Hauser, the key FBI informant in Operation Brilab.
Roemer said that Hauser and two other men with him wanted to talk about getting the state employes' contract for the Prudential Insurance Co. According to Roemer, Hauser and the two men said they were interested in political contributions, but Roemer did not elaborate.
He said he notified the board of trustees of the proposal, but did not hear from Hauser or his associates again.
Meanwhile, in Oklahoma City, Gene C. Howard, president pro-tem of the Oklahoma Senate, said he was paid $5,000 in cash by Hauser when the convicted businessman visited his office on Nov. 21 with three associates.
Hauser was seeking his help in getting the Oklahoma state employes' health insurance plan switched to Prudential, Howard said yesterday in a telephone interview.
Howard said Hauser and the three others promised to shave the current premiums from 37 cents per month for each state employe to 81 cents.
In addition to the $5,000, which Hauser pulled from his briefcase and put on the state senator's desk, the four also offered him on $8,000-a-month kickback if Prudential got the state business, Howard said.
"I was shocked," recalled Howard. "I pushed the money into my desk and told them goodbye."
Howard said he doesn't recall who arranged the meeting with Hauser and the others. "I'm racking my brain trying to remember," he said "All I remember is someone called and wanted to talk about saving the state some money."
Howard said one of the four visitors was from Oklahoma, but he would not name that person. The other three, including Hauser, were strangers to him, he said.
After they left, Howard said he called the counsel to the state Senate Donald McFarland, and described what happened.
On Monday, after the long Thanksgiving holiday weekend, Howard said he wrote out a personal check for the $5,000 to the State Employes Group Health and Accident Board. He then sent the board a check along with a letter describing Hauser's offer to cut the premiums and kick back $8,000 a month, he said.
"I felt like a rape victim," Howard recalled. "I was angry, but I was afraid to make it public because I thought I'd get spattered with the mud."
Howard is a Democratic candidate for the U.S. Senate seat now occupied by Republican Henry L. Bellmon, who is retiring.
Howard said the state board turned down the Hauser offer. It returned the $5,000 to Fidelity Financial Consultants, in Beverly Hills, the Hauser firm that supposedly was representing Prudential Insurance Co.