U.S. Atty.’s Office in L.A. Reorganizes for Drive Against Political Corruption

In preparation for an increased federal assault on political corruption in Southern California, the U.S. attorney’s office in Los Angeles has been reorganized in recent weeks to include a public corruption and government fraud section.

Members of a special force of 13 federal prosecutors, working closely with the public corruption squad of the FBI’s Los Angeles office, already are investigating corruption charges against an undisclosed number of Los Angeles city officials, officials said Wednesday.

U.S. Atty. Robert C. Bonner established the new unit--composed of a fourth of all criminal prosecutors in his office--in a major reorganization last month that coincided with creation of a new white-collar crime division composed of almost 100 agents in the FBI’s Los Angeles office.

The new FBI unit, while focusing primarily on defense industry kickbacks and other major frauds, incorporates the existing public corruption squad, which is expected to be bolstered by additional manpower in coming months, according to government sources.

Both Bonner and Richard T. Bretzing, special agent in charge of the FBI’s Los Angeles office, made it clear in interviews that they believe political corruption in Southern California is a significant problem.

They said the continuing W. Patrick Moriarty corruption case and other scandals in the last three years in Bell and the City of Industry involving public officials have convinced federal authorities of the probability of political corruption elsewhere in the area.

“I think we have public corruption in the Southland, something that many people have always assumed not to exist in Southern California,” Bretzing said. “There is corruption here.”

Bonner said creation of the new unit in his office is “more than symbolic” and reflects his view that the U.S. attorney’s office is the best equipped law enforcement agency to investigate political corruption.

“The cases we have already prosecuted demonstrate to me there is a level of political corruption beyond what we would like to believe exists in California,” he said. “There’s enough exposed so far to suggest at least some level of official corruption that still exists.

“The U.S. attorney’s office has a special responsibility in this area because political corruption is very difficult to expose and root out,” Bonner added. “Nonetheless, it’s extremely important that every effort be made to do so.”

The new corruption and fraud unit will also be responsible for prosecuting both espionage, illegal export and defense industry fraud cases, Bonner said. He said defense industry kickbacks and political corruption are equally high priorities of his office.

The new unit is one of four criminal investigative units in the U.S. attorney’s office. The others are major narcotics, major fraud and major crimes.

Heading the unit is Assistant U.S. Atty. William F. Fahey, who disclosed that one investigation has already begun into allegations of misconduct by some Los Angeles city officials.

“We have an investigation dealing with allegations of corruption within the Los Angeles city government,” said Fahey, declining to identify the officials under investigation or say if they were elected or appointed.

“We have also had some allegations about some federal officials that we will be looking into. It’s going to be some time down the road before there are any prosecutive decisions.”

Fahey, who said the allegations are not related to the Moriarty case or any other previous corruption prosecutions, said the corruption section is now in an early stage of coordinating its efforts with the FBI and other federal agencies.

The continuing Moriarty probe is being run separately under the direction of Chief Assistant U.S. Atty. Richard E. Drooyan. Moriarity, a former Orange County fireworks manufacturer, is serving a federal prison sentence for political corruption.

“We really want to get pro-active in the government corruption area and get the agencies involved,” Fahey said. “In terms of the number of cases, the defense fraud cases will take the most attorney time in this section. But in terms of public interest, government corruption is clearly the most important part of the unit.

“I don’t think our city is as corrupt as New York, Chicago or Detroit are supposed to be, but our view is that there is corruption here,” he added. “It often takes a sophisticated form, as in the various real estate transactions involved in some of the Moriarty cases.”

While the reorganization of the FBI’s Los Angeles office was made independently, Bretzing said it followed “a lot of conversation” with Bonner about the overall problem of white-collar crime in Los Angeles, including political corruption.

Bretzing said the white-collar crime division will be headed by William Stolhans, former assistant chief of the FBI’s national white-collar crime section in Washington. Stolhans, who arrived in Los Angeles this week, is now one of four assistant agents in charge of the Los Angeles office under Bretzing.