Vallen Contributions Tied to Pro-Israel Supporters

It appeared to be a classic example of indirect politics--giving to a minor party candidate to drain votes away from a major contender.

A group of more than 40 contributors, many of them members of orthodox Jewish congregations in Los Angeles, gave $120,000 in the last two weeks of the campaign to an American Independent Party candidate for the U.S. Senate in California who now says he would never have taken the money had he known where it came from.

The candidate, Edward B. Vallen, was avowedly “against the Zionists” and his campaign manager, Iris Shidler, said neither she nor Vallen wanted to have anything to do with Jewish support. They said they were told by an intermediary the money came from “conservative, patriotic Christians.”

The Jews among Vallen’s list of contributors, according to a few who have talked to The Times, were especially interested in Israel and Jewish causes. Those interviewed said their purpose in giving to Vallen was to aid the election efforts of incumbent Democratic Sen. Alan Cranston, and undercut the campaign of his Republican challenger, Rep. Ed Zschau, who was viewed as iffy on Israel and Middle East issues.

The American Independent candidate used the money to go on television and try to win conservative Republican votes away from Zschau, claiming he was not conservative enough and saying that Vallen and Cranston were the only men of integrity in the race.

Not Decisive

The effort in the last days of the tight Cranston-Zschau contest was not decisive. Vallen ended up getting 107,405 votes statewide, about 1.5% of the total, and Cranston’s victory margin over Zschau was 116,622. So even if all of Vallen’s votes had gone to Zschau, Cranston still would have won.

But the contributions remain a mysterious and potentially controversial development in the hard-fought Senate campaign. It still is not known who arranged to raise the money or who organized the effort to aid Vallen to defeat Zschau.

There may have been significant legal violations in the way the contributions were made and reported.

Most of the gifts listed with federal and state election authorities appear to exceed the legal limits on individual giving to candidates for federal office.

Federal law limits individuals to giving $1,000 to a candidate during a primary election and another $1,000 during the general.

Federal Election Commission officials in Washington say that a person is not permitted to give $2,000 to a candidate at the end of a general election campaign, as was done in the Vallen campaign, unless it can be shown that $1,000 of it would be used to defray debts incurred in the primary. But Vallen’s campaign manager, Iris Shidler, said that Vallen had no outstanding debts left over from the primary.

So far, all of the 11th-hour contributions reported to Vallen’s campaign were for at least $2,000, and eight were for $4,000.

One $4,000 contributor, Rene Lang Burg of Sherman Oaks, said that the contribution should have been reported as coming from both her and her husband. That would be legal if it could be shown that half of the money had been used to defray primary election debts.

Although most of the contributors contacted by The Times appeared to have the means to make such contributions, relatives of two of the donors say that their family members could never have afforded the $2,000 contributions listed for them. The relatives speculate that the money must have come from some unidentified third party. If so, the contributions would constitute illegal laundering of money. Finally, some of the contributions were not reported to the secretary of the U.S. Senate within 48 hours as required.

No One Willing to Talk

Direct or indirect contacts with as many of the donors as could be reached--about half of them--found not a single one willing to tell who had collected the money from them, or who had solicited them for it. Several of these persons promised to return telephone calls and then did not do so. Others canceled interview appointments after checking with parties they would not identify.

Mark Barnes, the conservative Republican Los Angeles political consultant who delivered the list of contributions to Vallen, likewise refused to identify the man who he said had passed the donations to him. Barnes said on two occasions that he had sought permission from this person to divulge his name, but the individual insisted on remaining anonymous.

There are some indications, however, that San Fernando Valley businessman Michael Goland--a fervently pro-Israel activist who spent $1.1 million of what he said was his own money to defeat Israel skeptic Sen. Charles Percy (R-Ill.) in 1984--may be behind the contributions to Vallen.

Two executives of Goland-controlled companies, David Hultquist and Maury M. White, were listed as giving to the Vallen campaign. Hultquist was credited in reports filed by the Vallen campaign with giving $4,000 and White, $2,000. Another contributor, Jerry Hanrahan, is listed in the Vallen reports as living in an expensive Malibu home records show is owned by Goland. Yet another donor, Richard M. Horowitz, is described as a Goland friend, although neither Horowitz nor Goland would discuss the matter.

In addition, another minor party candidate in the Senate race, Libertarian Breck McKinley, has said that Barnes approached him last summer saying he represented individuals who could make contributions to McKinley’s campaign for the purpose of undercutting Zschau. McKinley said he asked Barnes who the individuals were, and Barnes said he represented Goland among others.

Barnes, however, denies naming Goland in his conversations with McKinley, who ended up getting no such donations. “I’ve never met with Mr. Goland,” he said. “I’ve talked to him over the phone.”

He said the man who handed over a check encompassing all of the $120,000 in donations for Vallen’s campaign “certainly wasn’t” Goland. “Quite honestly,” Barnes said, “the only thing I know for certain is the name of the person who contacted me and the names on the checks.”

Barnes, who had described the contributors as conservatives and fundamentalists, later expressed surprise when told by The Times that most of them apparently were Jewish.

No Comment

Goland did not respond to telephone inquiries. But his attorney, Marshall Grossman, said he told Goland of the questions concerning the Vallen contributions, and Goland had decided to make no comment.

“Michael (Goland) has a policy of not commenting on anything that appears in the media about him,” Grossman said.

Sources in the Jewish community said that one reason Goland may have decided to stop commenting is that he has been warned that his political activities could backfire. The warning came as a result of Goland’s campaign against Percy two years ago and his well-publicized visit to the Senate cloakroom in Washington last May to lobby against the sale of American arms to Saudi Arabia.

One source, who spoke on condition that he not be identified, said that earlier this year an official of the American Israel Public Affairs Committee (AIPAC), the chief pro-Israel lobby in the United States, had met with Goland to specifically ask him not to do anything in the Cranston-Zschau race out of just such a fear that publicity about an anti-Zschau effort by him would end up by hurting Cranston, a longtime backer of Israel.

Helping Cranston

Persons who were among the contributors of the $120,000 to Vallen told The Times that they were trying to help Cranston.

For instance, Judy Altman, a Sherman Oaks insurance agent, listed with her husband, Michael Altman, for a $4,000 contribution to Vallen, said, “I was very much for Cranston, and I’m so excited he won. We weren’t for this man (Vallen). . . . We obviously weren’t giving to help this man.”

The Altmans also gave $4,000 to Cranston during the year, $2,000 in the primary and $2,000 in the general election campaign.

A few insisted, however, that they were sincere in the gifts to Vallen. Zvi Sperling, interviewed at his lighting business in South Los Angeles, said of his $4,000 contribution, “I gave because I believe in him--the Libertarian.” Informed that Vallen was an American Independent, not a Libertarian, Sperling responded, “I give to everyone.”

Several associates of contributors expressed amazement at the news that persons they knew had given to Vallen.

For instance, Wendy Gordon, secretary to $2,000-contributor David S. Weisman, a Sherman Oaks attorney, said Weisman was a strong believer in both Israel and Cranston and abhorred American Independent positions.

No Interview

When Weisman came in, he first agreed to an interview several hours later. But a short time later, he had Gordon call to say this was a political matter and he would not submit to an interview.

Associates described several of the other givers as essentially non-political, quiet members of orthodox Jewish congregations and supporters of Israel.

Meanwhile, the candidate they gave to, Vallen, emphatically said he would not have taken the money had he realized it came from “Zionists.” He said he had been assured by Barnes, the consultant, that it was primarily from conservative Christians and that Jews had never been mentioned.

“I wouldn’t have cared if a Polack had given it, as long as it was honest,” said Vallen. “If it were pro-Israel though, hell no, we would not have taken it. We feel that Israel is a friend and we should befriend it, but what has happened in that country is that the Zionists run it.”

Vallen’s campaign manager, Shidler, said that she and Vallen feel, in fact, that “it’s time to cut welfare off to Israel and let them do what their ethnic background allows them to do, which is make money for themselves.”

‘I’m Not Racist’

Asked if that wasn’t an anti-Semitic remark, Shidler responded, “I’m not a racist. I have a black daughter-in-law. . . . I work in a Jewish environment. I’m not a racist, but I do think there is a time when we have to call a halt to burdening the taxpayer of America with payments to the Third World and also to Israel, when we know they won’t repay it.”

The American Independent party, founded by Alabama Gov. George C. Wallace to support his candidacy for President, has been on the California ballot since 1968, but has never gotten any substantial percentage of the vote. Its candidates frequently have used racial issues and allusions in their campaigns.

The television commercials Vallen did with the $120,000 he received were the only ones he put on in his entire campaign. He said he otherwise had only $5,000 in his campaign treasury and would have been able to afford no advertisements.

The Cranston campaign, meanwhile, has denied any involvement in or knowledge of the contributions to Vallen. The senator’s manager, Darry Sragow, said, “That’s the kind of thing we wouldn’t want to touch. If there was any kind of scheme like that, that just runs contrary to everything we’ve done in the campaign. It’s the last thing on earth that we would have gotten involved in.”

Zschau’s campaign manager, Ron Smith, called the donations a “subversion of the whole election process.”

“They’ve clearly violated the spirit, and we believe the letter of the law, and it makes a mockery of the rules that we all operate under,” he said.

Possible Violations

Smith’s reference to violations pertained to the apparent bypassing of individual contribution limits of $1,000 per candidate in a primary election campaign, and a like amount in the general election campaign, as well as to the delays in reporting the gifts to authorities and to the suggestions of laundering of funds.

Officials at the Federal Election Commission in Washington say that enforcement proceedings relating to violations can either be undertaken by the commission staff or initiated through public complaint to the commission.

However, spokeswoman Karen Finucan said that under federal law, the commission has no authority to fine or otherwise penalize violators on its own. She said it can attempt to convince violators to pay and even take them to court. But the court would decide whether a fine should be imposed. Most fines have been small.

When former Illinois Sen. Percy complained about Goland’s activities against him two years ago, the commission dismissed the complaint.