Posted Online: March 29, 2007, 12:00 am

Iowa state senator arraigned on extortion charge

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DES MOINES, Iowa (AP) -- State Sen. Matt McCoy stood before a federal magistrate Thursday and pleaded not guilty to a charge of attempted extortion.

"Today was the first step in a process that we hope will reveal all of the facts and we can be vindicated in every way," McCoy said after the hearing. "I'm looking forward to getting this behind me and I'm looking forward to my day in court."

A federal grand jury indicted McCoy on March 14 on one count of attempted extortion for allegedly threatening to use his influence as a legislator to force a former business partner to pay him $2,000.

McCoy, a Des Moines Democrat, faces a maximum prison sentence of up to 20 years and a potential fine of $250,000 if convicted.

U.S. Attorney Matt Whitaker said McCoy attempted to extort money from Reid Schultz, owner of a home security business in Des Moines, and an employee, Tom Vasquez.

Whitaker said the business was planning on selling security systems for elderly adults throughout Iowa. McCoy is alleged to have demanded money from Schultz and Vasquez and threatened to have their status as a Medicaid vendor pulled if they didn't pay.

McCoy accepted $2,000 in payments between Dec. 29, 2005, and March 24, 2006, Whitaker said. The money was provided by the FBI as part of an undercover investigation.

The charge relates to the Hobbs Act, a federal law enacted in 1946 to fight racketeering in labor-management disputes but that also includes a section on extortion involving public officials.

McCoy said the charges stem from a business relationship and contractual disagreement that soured, and former partners who turned against him and cooperated with federal authorities.

U.S. Magistrate Celeste Bremer set a trial for June 4.

She ordered McCoy to remain in Iowa unless he makes arrangements with probation officials. He also was instructed to turn in his passport.

McCoy served two terms in the Iowa House before being elected to the Senate. He was elected to his third term in November.

He said he plans to remain in office. Fellow Democratic lawmakers have not pressured him to step down or remove himself from committee assignments, he said.

"I've found my colleagues to be very understanding," he said. I've found my colleagues to be very committed to the principal of innocent until proven guilty."