Guilty Plea Made in Capitol Sting : Corruption: Republican legislative aide also agrees to cooperate in the continuing investigation. It marks a significant advance in the 3-year-old probe.

SACRAMENTO —  A Republican legislative aide, whose refusal to become an FBI informant in 1988 triggered a raid of Capitol offices, pleaded guilty Tuesday to extorting $12,500 in payments from an undercover agent on behalf of GOP Assembly members.

Appearing in U.S. District Court, the aide, 42-year-old Karin Watson, formally agreed to cooperate with federal prosecutors in their continuing political corruption investigation in exchange for reduced charges and a recommendation of leniency in sentencing.

The names of the Republican legislators who received the money solicited by Watson were not included in a brief court statement describing her offense.

However, the amount and timing of the payments described in court filings correspond to $10,000 in campaign contributions that former Assembly Republican Leader Pat Nolan of Glendale reported receiving June 29, 1988, and a $2,500 honorarium that Assemblyman Frank Hill of Whittier reported accepting June 27, 1988.

Neither Hill nor Nolan could be reached for comment Tuesday. However, Nolan’s office issued a statement quoting Nolan as saying that Watson’s guilty plea came “as a total and complete surprise.” Nolan said, “I have always demanded the highest ethical and moral standards of my staff and in my work with Karin I have never seen her engage in an unethical act.”

Watson is a $58,428-a-year legislative consultant who last year worked closely with Nolan and Hill, both leaders of the Assembly Republican caucus at the time.

Her decision to cooperate with prosecutors represents a significant advance in the political corruption probe that began in 1986.

Following Watson’s guilty plea, U.S. Atty. David F. Levi said the legislative aide had already provided prosecutors with a detailed statement of her activities on behalf of lawmakers. And he acknowledged that Watson’s cooperation has been valuable to investigators, hinting that it could lead to future indictments before she is scheduled for sentencing in six months.

“You have to assume we only enter into (plea-bargain) agreements if we believe they are of value to us,” Levi said.

He said prosecutors deliberately omitted the names of legislators. “There is no reason to name people and injure careers until a formal charge is filed,” Levi said.

However, Hill and Nolan have been repeatedly identified by those familiar with the federal corruption probe as targets of the investigation.

As a Republican legislative consultant and a one-time key confidante of Assembly GOP leaders, Watson is in a position to describe in detail efforts to raise funds for political campaigns and to garner honorariums, such as speaking fees.

Federal authorities first confronted Watson with their case against her on Aug. 24, 1988, according to several sources familiar with the investigation.

In a meeting lasting several hours, FBI agents told Watson of a Capitol sting operation that had begun in 1986. In the sting, agents posing as Southern businessmen tried to win support for special interest bills that supposedly would help their phony companies set up a shrimp processing plant near Sacramento.

In that 1988 meeting, the FBI urged Watson to become an undercover informant in the sting.

But Watson repeatedly denied that she had done anything wrong and refused to cooperate with federal authorities, the sources said.

Since Watson then knew of the sting, the prosecutors decided to bring the undercover phase of the corruption probe to an abrupt end. Armed with search warrants, about 30 agents swept through the Capitol and searched the offices of Watson, Hill and Nolan, as well as Sen. Joseph B. Montoya (D-Whittier), Assemblywoman Gwen Moore (D-Los Angeles) and a Moore aide, Tyrone Netters. Former Sen. Paul Carpenter (D-Cypress), now a member of the State Board of Equalization, has also been named as a sting target. And sources close to the investigation say federal investigators continue to look at the activities of Sen. Alan Robbins (D-Tarzana).

However, until Watson’s guilty plea, the only Capitol figures to have been charged were Montoya and his ex-aide, Amiel A. Jaramillo. Both have pleaded innocent. Montoya is scheduled to go on trial Monday.

According to a statement attested to in court by Watson, beginning in April of 1988 she met frequently with another legislative aide--apparently Senate Democratic staffer John Shahabian--to discuss “how much money would be needed in order to have the assemblymen support the proposed legislation. . . . Ms. Watson indicated on several occasions that approximately $10,000 would be divided among certain assemblymen for their support.”

Shahabian had begun cooperating with federal authorities after he was confronted with evidence that he had extorted money from undercover FBI agents.

After meeting with Shahabian, Watson arranged the meetings--on June 27 and June 29--during which the Republican legislators she worked for received a total of $12,500 in campaign contributions or honorariums from the “businessmen.”

The court documents also state that she made false statements to law enforcement authorities at the August, 1988, meeting when she was first confronted with the evidence against her.

However, prosecutors agreed not to charge Watson with making the false statement as part of the plea-bargaining agreement.

Under the terms of that agreement, prosecutors will recommend that she serve no prison time but instead be sentenced to no more than six months in a half-way house. The maximum penalty for extortion is 20 years in prison and a fine of $250,000.

U.S. District Judge Edward J. Garcia is free to decide on a more severe sentence. In that case, Watson would be able to withdraw her guilty plea and any statements she made to federal investigators could not be used against her in court.