Franchetti says he sued to bare plot; $1 million slander suit against Dymally is linked to alleged Masry conspiracy

SACRAMENTO — State Finance Director Michael Franchetti says he filed a $1 million slander suit against Rep. Mervyn Dymally in part to uncover a possible “conspiracy” to help an associate of the congressman evade conviction on a grand theft charge.

Franchetti, in his first public comments on the litigation, stopped short of asserting such a “conspiracy” took place but said he has been led to believe it has by attorneys who are prosecuting the Dymally associate.

Ron Orduna, chief of staff for the Los Angeles congressman, and the associate in question, Los Angeles attorney Edward Masry, promptly labeled Franchetti’s statements “ludicrous.”

Dymally was unavailable for comment.

Meanwhile, Franchetti also charged that Senate Democrats, whom he did not identify, offered to confirm him for the Cabinet-level post if Gov. Deukmejian pledged in return to remain neutral on a legislative reform initiative due to appear on the June ballot.

The initiative would place strict new controls on Democratic legislative leaders and cut the budget of the Senate and Assembly by 30 percent. Bud Lembke, a spokesman for Senate President Pro Tempore David Roberti, denied any offer of a deal. “The Democrats are certainly aware that any such attempt to make a deal would leak out and reflect poorly on them,” Lembke said.

The budget director said he was told of the offer of a deal by other Deukmejian aides and did not know who among Senate Democrats was involved.

Franchetti said he understands his confirmation might also have been assured if he agreed to drop the lawsuit against Dymally.

The new controversy has surfaced just as a yearlong battle by the administration to win Senate confirmation for Franchetti nears a climax. If he does not win the Senate nod the day the upper house reconvenes — Jan. 3 — the finance director will automatically lose his position.

Although Franchetti said he plans to leave the job sometime next year anyway to engage in a private legal practice, he said does not want to leave as soon as Jan. 3 and wants to be confirmed.

Now, it appears, his confirmation is deeply entwined in a bizarre political and legal feud dating back five years. The players include Franchetti, former Attorneys General Evelle Younger and George Deukmejian (now governor), Dymally, Masry, and the Escondido-based religious group Morningland. Its controversial doctrines relate to astrology, astronomy, telepathy and mysticism.

Originally, Masry was charged along with Morningland leader Sri Patricia Sperato with attempting to bribe then-Lt. Gov. Dymally. In exchange for $10,000 from the church, Dymally allegedly was to set up a rigged legislative inquiry that would create pressure to halt law enforcement investigations of the religious group.

Masry, then Morningland’s attorney, was acquitted of the bribery charge. A separate charge of conspiracy to bribe an executive officer of the state was dismissed.

Masry was convicted on still another charge of grand theft by false pretenses in taking $10,000 from Morningland. But a San Diego Superior Court judge ordered a new trial on the theft charge, citing juror misconduct.

Tomorrow, the court is to rule on Masry’s motion to dismiss that final charge, based on a claim that he has been denied a speedy trial. If his motion fails, the retrial is scheduled to begin Dec. 27.

Franchetti was a deputy state attorney general when the Morningland case was investigated by that office in 1978. Allegations that Dymally and his campaign finance chairman, Hugh Pike, were involved in a Morningland bribery scheme surfaced in news accounts that year amid Dymally’s bid for re-election as lieutenant governor.

Dymally (since elected congressman) in a published interview and in often-emotional testimony earlier this year before the state Senate Rules Committee, claimed Franchetti engineered his 1978 defeat by leaking false information about the case to the press and “inviting” the FBI to investigate him. Dymally, who has never been charged with any crime, called Franchetti “a dangerous man” in a wire service interview.

Shortly before Deukmejian appointed Franchetti state finance director, Pike dropped a libel suit he brought against Franchetti after receiving a letter from him expressing “sincere regret” for the release of false information.

Dymally filed a $1 million libel suit against him last May. Franchetti, in an interview this week with The San Diego Union, noted that Masry is acting as Dymally’s attorney in the case. He also said that in September the lawsuit was broadened to name as additional defendants Gov. Deukmejian, Younger, and the agents and attorneys in the attorney general’s office handling the prosecution of Masry.

“Some of the attorneys that are handling that (prosecution of Masry) and the attorneys that are handling the Dymally lawsuit against me … believe that much of this whole issue has been raised to help Masry, to try to frame a defense for Masry that he is a victim of a political attack,” said Franchetti.

“If that’s true, if there was a conspiracy going on to try to protect Masry, I’d really like as a personal matter to find it out,” he said. “The lawsuit is one way.

“The aim of the lawsuit, which I intend to bring to trial, is to factually show that Mervyn Dymally’s allegations about me are untrue. Those allegations that I used the job of chief deputy, to misuse the process to have the FBI investigate him, to have Masry prosecuted, all these things, they’re just false. I was outraged that someone would say things about me like that.”

Franchetti said he planned to hold off filing suit because it might complicate his Senate confirmation as finance director. “But when Dymally’s lawsuit was amended to sue these special agents, civil servants, the prosecutors of Masry, to try to bring what appeared to me undue pressure on them, I got pretty upset,” he said.

Franchetti said that action and the one-year statutory limit on filing libel suits prompted him to bring his $1 million slander case against Dymally earlier this month.

Masry replied that the Dymally lawsuit against Franchetti is not a ploy to bring undue pressure on Masry’s prosecutors.

“This is really ludicrous,” said Masry. “Franchetti commits a felony, he violates the Business and Professions Code and releases documents illegally to the news media, and now he turns around and says somehow I have (conspired)? …

“I’m not remotely concerned about being tried by a jury. I’m going to be found not guilty. I’m absolutely confident that when all the smoke clears I’ll be vindicated,” said Masry.

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