Gift to City Allegedly Detoured by Farrell

Councilman Robert Farrell used his influence to steer a corporate real estate gift intended for the City of Los Angeles to a small social service agency run by his former wife, sources said.

Six months after the Improvement Assn. of the 8th District acquired the former bank office and parking lot in 1984, Farrell received city approval to move his own district office and staff into the building located in South-Central Los Angeles, according to city documents. The property, donated to the city by the Security Pacific National Bank, was valued at an estimated $225,000.

The records show that for the last two years, the city has paid $57,600 in rent for space occupied by Farrell’s staff to the improvement association, whose executive director is Essiebea Farrell. Before the city began paying Essiebea Farrell’s agency for her ex-husband’s office space, the councilman received free rent for his district office at another location.

The transactions, which have amounted to a combined loss to the city of $282,600 in real estate and rent, represent a portion of the financial support that Farrell has given to the improvement association. These include $56,000 in contributions by Farrell’s political committees since 1983 and a $53,105 federal grant approved last December by the City Council. Farrell is chairman of the council’s Grants Committee and voted with the majority in the full council to approve the grant.

The improvement association, which runs a small literacy and food distribution program, has received nearly $400,000 in real estate, rental payments, contributions and grants with Farrell’s help over the last four years.

The district attorney’s office special investigations unit is reviewing “reports of possible improprieties” to determine whether Farrell has violated any criminal laws, spokesman Al Albergate said.

Farrell, 51, a councilman for 13 years who is facing a possible recall election, declined to be interviewed. His attorney, Johnnie L. Cochran Jr., read a prepared statement Wednesday defending his client.

“He has never intentionally violated any conflict-of-interest laws or any other laws and has always been open and above board about his relationship to the improvement association . . . ,” Cochran said. “The councilman is confident that he has done nothing wrong and that any investigation will demonstrate his innocence and affirm the fact that he has at all times been motivated only by a desire to help the people in his district.”

Farrell’s activities raise questions of conflict of interest and improper use of political campaign funds because the councilman’s support of the agency that he and Essiebea Farrell founded in 1980 dates back to the period when the couple were still married. The Farrells separated in April, 1984, and were divorced in September, 1986, according to court records.

Essiebea Farrell and Pierpont Laidley, president of the improvement association, could not be reached for comment.

Laidley returned to the city $8,400 in rent money on Dec. 4 that the improvement association had collected on property it no longer owned. Even though the property, which had served as a parking lot for Farrell’s field office, was sold and developed into an apartment building, the improvement association continued collecting rent for it for 21 months. The city is demanding that the improvement association pay $1,432 in back interest.

The adjacent office building at 8475 S. Vermont Ave. was formerly a Security Pacific National Bank branch office. When Security Pacific executives decided in 1984 to merge the bank with a nearby branch, they approached Mayor Tom Bradley’s office about the possibility of donating the building to the city.

Bradford Crowe, director of the mayor’s Office of Economic Development, said he met with bank officials to discuss using the building to kick off the city’s plans to revitalize the neighborhood in Farrell’s district. The gift “was like the gold mine at the end of the rainbow,” said Crowe, who arranged a meeting on June 7, 1984, between Security Pacific officials and Farrell to iron out the details.

At that meeting, Crowe said, he urged that the parties precisely follow a similar agreement worked out between Sears, Roebuck & Co. and the city involving the donation of a vacant Sears store.

Toward the end of 1984, Crowe said, he tried to arrange a press conference to announce the gift and publicize the revitalization project. Bradley and Security Pacific wanted the press conference, but Farrell refused because he said he did not want to draw attention to a business closing in his district, Crowe said.

City Hall sources said they believe that Farrell did not want to publicize his efforts to turn over the building to his wife’s agency.

On Dec. 27, 1984, Security Pacific transferred the properties to the improvement association instead of the city as originally planned by the bank and agreed to by the mayor’s office.

Sue Taha, director of corporate communications at Security Pacific, said that the bank received a phone call from a city official who directed the bank to transfer the deed to the improvement association. The bank does not have a record identifying the city official who placed the call.

Both Crowe and Taha said the bank dealt exclusively with the mayor’s office and Farrell’s office in its discussions on the property. Crowe said the call did not come from the mayor’s office. Taha said that it is “not unlikely” that someone in Farrell’s office made the call.

According to City Hall sources, Farrell indicated from the moment he learned of the gift to the city that he planned to have the property ownership transferred to the improvement association.

Cochran, Farrell’s attorney, said that the councilman put bank officials in touch with the improvement association to discuss taking over the property but did not “twist anybody’s arms.”

But Security Pacific officials, according to Taha, were unaware that the property was being given to an organization managed by Farrell’s wife.

“We did not question where the city told us to transfer the deed,” Taha said. “We just accepted their decision. We didn’t even look into the organization.”

The mayor’s office was also unaware until recently that the property had been turned over to the improvement association.

“My assumption always had been that the building was to come to the city and it did in fact come to the city,” Crowe said. “I was astonished to find that the building went to a nonprofit agency.”

The only stipulation that Security Pacific officials included in the transfer was that the Los Angeles Urban League continue to occupy 1,300 square feet of office space at no charge to conduct job-training classes for the poor and unemployed, Taha said.

But last year, Essiebea Farrell demanded that the Urban League begin paying rent and the organization was forced to move out, said John Mack, Urban League president.