No Evidence RTD Board Was Bribed, D.A. Concludes

The Los Angeles County district attorney’s office, after conducting an investigation, has found no evidence that any member of the RTD board was bribed to influence the award of a $1.4-million insurance contract, The Times has learned.

The office’s Special Investigations Division, which looks into allegations of official corruption, is preparing a memorandum outlining its findings, sources familiar with the investigation said. The memorandum is expected to be made public within a few weeks.

The office’s investigation centered on whether some or all of a $5,000 bonus payment by Leonard J. Russo Insurance Services Inc. to its lobbyists in 1984 to secure the workers’ compensation claims-handling contract had been passed on to members of the board of the Southern California Rapid Transit District, sources familiar with the case have said.

Chief Deputy Dist. Atty. Gilbert I. Garcetti, the office’s second-in-command, Thursday refused to say what the investigation had disclosed. But he said the office is still examining the RTD case and that, “hopefully, we’ll have it resolved in the next few weeks.”

Barring the discovery of any new evidence, the memorandum is expected to summarize the information gathered in the months-long probe and state why the office believes it does not warrant any criminal prosecution.

While the investigation of possible payoffs is ending, the district attorney’s office still is looking into allegations that former Russo employees worked with attorneys and chiropractors to pay off phony personal injury claims against the transit agency. RTD officials have acknowledged that the scam may have involved hundreds of thousands of dollars in payments, although Russo’s insurance firm is expected to reimburse the district for the loss.

Disclosures of bribery allegations were among the most damaging in a din of recent charges of poor management, high spending and safety problems at the RTD.

The bribery investigation, an outgrowth of the phony-claims investigation, involved events surrounding a closed-door action by an RTD board committee in August, 1984. The committee members--all of whom Russo’s lobbyists have said they contacted--unexpectedly rejected a staff recommendation to choose a higher-ranked firm and awarded the contract to Russo.

According to those interviewed by investigators, the district attorney’s office focused on comments made at downtown celebrations where Leonard J. Russo, some of his top staff and his lobbyists gathered after two crucial RTD board votes.

RTD board members, Russo and his lobbyists--Marty Carr and James Kernodle--denied any payoffs were made or that there was any wrongdoing in connection with the contract. Charles Murry, a former Russo executive who attended both gatherings, recalled Kernodle saying that winning the contract was “worth $5,000” to the lobbyists, but said he had no evidence of payoffs.

RTD President Jan Hall welcomed the news, saying the investigation had been a “very unfortunate cloud” hanging over the board as it struggled to deal with the district’s long list of problems. “That’s good news. . . . I never felt there was any validity to that charge,” Hall said.

Russo, who has aggressively proclaimed his innocence in a series of media interviews, could not be reached for comment. But his attorney, Richard Hughes, said, “We are certainly pleased to know that they are moving in that direction.”