A federal grand jury in Houston charged the speaker of the Texas House and three other men with fraud, conspiracy and racketeering yesterday. The indictments were the first to be handed down as a result of major FBI undercover operation under way across the country.
Billy Wayne Clayton, the powerful Democratic House speaker, was accused of helping undercover FBI operatives posing as Prudential insurance agents get a state contract in return for $5,000 in cash and a promise of $600,000 more. A union official and two attorneys also were indicted in the so-called Brilab -- for bribery-labor -- investigation, which is continuing in Louisiana, Oklahoma, Los Angeles and Washington, D.C.
Brilab was disclosed in press account in February, just a week after similar disclosures about another undercover operation, Abscam, implicated eight members of Congress in alleged bribery schemes.
Souces said then that the Brilab investigation used a convicted insurance swindler, Joseph Hauser, and two undercover FBI agents to masquarade as agents representing Prudential through a fictitious Beverly Hills, Calif., firm called Fidelity Financial Consultants.
The investigation started in Louisiana, where a chief target was a reputed organized crime figure, Carlos Marcello. That probe there led to union officials and public officials in several states, sources said.
Grand juries in New Orleans, Oklahoma City, Los Angeles and Washington are expected to reach decisions of further Brilab indictments in the rear future, sources said.
The Texas House speaker acknowledged at the time of the first press accounts that he met with Hauser and L. G. Moore, an official of the Operating Engineers International Union, last Nov. 8 and accepted a "campaign contribution" from Moore.
He didn't refuse the cash gift at the time, he said, because he didn't want to embarrass Moore in front of his business associates. Instead, he told an aide to put the money in "a safe, locked place" to be returned to Moore later, Clayton said.
Clayton's attorney, Charles Burton, told reporters four months ago that his client never really accepted the cash. Acceptance, he said means "taking the money with an intent to appropriate it to his use. The fact you keep something doesn't mean you meant to keep it.
According to the indictment, Moore sand the two attorneys, Randall B. Wood and Donald W. Ray, of Austin, conspired to approach Clayton to influence Bob Johnson, his appointee to the board of the Employes Retirement System of Texas, to get bids on the state employe's health plan reopened so the purported Predential agents could bid.
Apparently none of the targets in the entire year-long Brilab investigation ever checked the offices of Prudential Insurance to verify the status of Hauser or the undercover agents. Prudential has said it never gave the FBI permission to use its names in the case.
Each of the four defendants was charged with two counts of wire fraud, conspiracy, conspiracy to commit extortion and racketeering. Clayton was charged with extortion and the others with aiding int he offense.
None of the defendents could be reached immediately for commit.
The Brilab investigation has been described as the FBI's highest level infiltration of organized crime because of alleged meetings between Marcello and the undercover agents. Marcello was introduced to Hauser and the agents by Washington businessman I. Irvin Davidson, who also is a target of the New Orleans grand jury investigation, according to sources.