The video wizard who marketed Jane Fonda's workout tapes was charged Thursday with illegally funneling money to the campaigns of presidential hopeful Gary Hart and other candidates.
A federal grand jury indictment accuses Stuart Karl of conspiracy, false statement-concealment in a matter before a government agency, making an illegal corporate contribution to a federal candidate, making excessive contributions to a candidate and making a campaign contribution in the name of another.Karl, 34, of Newport Beach, induced others to make political contributions supporting candidates he favored in 1984 and 1986, then reimbursed the donors to elude federal limits on such contributions, the 12-count indictment alleges.
The government alleges Karl solicited the small contributions and that treasurers of the political committees involved declared them small and lawful contributions made by people other than Karl.
"There is no evidence that Mr. Hart or the other senatorial candidates were aware of the illegal contributions," U.S. Attorney Robert Bonner said at a news conference to reveal details of the indictment.
Thirteen of Karl's former employees, used as conduits for the alleged contributions, were not indicted because most cooperated in the investigation and have been given limited immunity from prosecution, Bonner said.
"Generally, we are more interested in the person causing the contributions to be made," he said.
The indictment alleges Karl also used his corporation, Karl-Lorimar Home Video, to give an illegal $25,000 contribution to a fund-raiser entitled "An Evening With Barbra Streisand and Robin Williams."
The fund-raiser benefited various candidates including Timothy Wirth of Colorado, Tom Daschle of South Dakota, Bob Edgar of Pennsylvania, Patrick Leahy of Vermont, and Alan Cranston of California.
Bonner and Assistant U.S. Attorney Nancy Stock said a further grand jury presentation will be made in the case involving other possible participants in the conspiracy.
They said members of Hart's political campaign who encouraged the contributions were still under investigation and Ms. Stock said that unidentified members of the Hart campaign are cooperating with the government.
The indictment contends Karl made $200,000 in illegal campaign contributions to Hart and other candidates, $38,300 to congressional and Senate candidates and $159,500 to Hart's 1984 campaign.
If convicted, Karl faces 36 years in prison and fines totaling at least $930,000. Karl, who once described himself as a "humble little guy with the torn tennis shoes," became a millionaire because of his foresight in the magazine and video markets.
He started Karl Video in 1979. It was responsible for Miss Fonda's first "Workout" video, which has sold millions of copies.
After selling his company to Lorimar in 1984 for an undisclosed amount, Karl became president and chief executive of Karl-Lorimar Home Video division.