King County Prosecutor Norm Maleng yesterday called for tougher campaign-finance laws to combat "political money laundering" outlined in charges against strip-club magnate Frank Colacurcio Sr., his son Frank Colacurcio Jr. and two associates.

The four defendants were accused of illegally funneling campaign contributions to three Seattle City Council incumbents during the 2003 election.

They were charged under a broad false-document law that does not specifically mention campaign contributions. But prosecutors used the statute to allege that the defendants caused phony campaign-finance reports to be filed with the state and city.

"Political money laundering is a crime, and it will not be tolerated," Maleng said at a news conference.

Defense lawyers said their clients would plead not guilty and vowed to dispute the charges, including the use of the false-document statute.

Maleng said the state's campaign-reporting laws, which carry civil sanctions for filing false finance reports, should be strengthened with criminal penalties.

He urged state legislators to add such penalties to the 1972 Public Disclosure Act, saying, "modifying the act will better ensure our history and culture of fairness and integrity in our public offices and institutions."

Kate Lykins Brown, a spokeswoman for Gov. Christine Gregoire, said the governor's staff had been in contact with Maleng's office and would "look at the Public Disclosure Act to do what's needed to strengthen it."

The charges filed yesterday accuse the Colacurcios, along with the two associates, Gil Conte and Marsha Furfaro, of giving thousands of dollars in cash to friends, relatives and associates to contribute to three City Council incumbents, often at the legal limit of $650 per donor.

The purpose, Maleng said, was to cover up the source of the contributions and circumvent the contribution cap.

The contributions were made shortly before the council, in a 5-4 vote, approved a rezone that allowed Colacurcio Jr.'s Lake City strip club, Rick's, to expand its parking lot.

"Our public policy is not for sale to the highest bidder," Maleng said, "nor should our public officials ever be in a position where they owe their office to one or two large contributors with special interests."

John Wolfe, a Seattle attorney who represents Frank Colacurcio Jr., 43; and Irwin Schwartz, who represents Frank Colacurcio Sr., 88, issued a written statement saying their clients intend to plead not guilty.

"We anticipate the filing of extensive pretrial motions challenging the charges and, if necessary, a lengthy trial where we will challenge the evidence offered by the state in order to enforce and protect our clients' right to be presumed innocent and to receive a fair trial," the statement said.

Furfaro's attorney, Allen Ressler, said she will plead not guilty. "She is distraught," Ressler added, because the charges involve her two grown daughters, who have told investigators their mother reimbursed them for making contributions.

Furfaro, 65, was identified in court papers as an office manager for the Colacurcios.

Conte, 71, a former lounge singer and longtime friend of the Colacurcios, could not be reached for comment.

Each defendant was charged with one count of conspiring to violate the false-reporting law, a gross misdemeanor. Prosecutors also filed eight felony charges alleging individual violations of the law.

If convicted, each defendant could face up to a year in jail and up to a $15,000 fine. Maleng said if the case went to trial his office could ask for exceptional sentences to boost those penalties.

At least $39,000 in Colacurcio-related contributions were made to the 2003 re-election campaigns of Judy Nicastro, Heidi Wills and Jim Compton.

Nicastro and Wills were defeated in the election, while Compton was re-elected.

But the charges include new allegations that could push the total to nearly $50,000.

Maleng said his office found no evidence that the three council members were aware of the alleged conspiracy.

Compton declined to comment yesterday, saying it was "not my habit to comment when charges are filed in a court."

Nicastro also declined comment. Wills did not return a phone call seeking comment.

The prosecutors' case is focused on the alleged architects of the funneling scheme and not the individuals who were allegedly reimbursed for their contributions. Prosecutors said the people reimbursed in the alleged scheme ranged from a contractor who worked on Colacurcio Jr.'s house to an auto-repair-shop owner and grocery-store manager in Pierce County.

Former Washington Gov. Albert Rosellini, who delivered some Colacurcio-related contributions to at least one council member, was not charged with any crime.

Maleng said there was no evidence that Rosellini, 95, was aware of an illegal scheme to funnel donations.

Some of the people who were allegedly reimbursed were called to testify before a secret-inquiry-court judge, Maleng said. Some were granted immunity in exchange for testimony.

Walt Dauber, a retired Yakima attorney who has previously represented Colacurcio Sr., admitted in a sworn statement that he received cash from Colacurcio Sr. to reimburse him for $3,250 in contributions to the Nicastro campaign, according to the charging papers filed by prosecutors.

The contributions were made in the names of Dauber, his wife, and his former law partners, Howard Schwartz and his wife and Rick Bartheld, who all were reimbursed in the scheme, prosecutors allege.

Dauber hung up when asked for comment yesterday. A message left at Schwartz and Bartheld's law firm was not returned.

In another instance outlined by prosecutors, an elderly woman living in publicly subsidized housing who subsists primarily on a $400-a-month Social Security check, gave $650 to the Nicastro campaign the same day someone deposited $650 in her bank account.

The woman is related to Steve Fueston, a longtime business partner of the Colacurcios.

The Colacurcios and others could also face separate civil penalties from the Seattle Ethics and Elections Commission, which initially launched the investigation of Colacurcio-related money two years ago before referring the case to the prosecutor's office.

The commission's investigator, Harley Anders, a former FBI agent, also worked for Maleng's office on its criminal probe.

Tim Burgess, a former chairman of the ethics commission, has pushed publicly for action against the Colacurcios. He said he was glad Maleng's office had filed charges.

"This is not about nude dancing. It's not about the parking spots. It's about whether or not the rule of law is going to be followed and whether or not we want maliciously motivated players to interfere with our local governments," Burgess said.

Steve Miletich: 206-464-3302 or smiletich@seattletimes.com

Jim Brunner: 206-515-5628 or jbrunner@seattletimes.com