Gates’ Dismay Forces 2 Aides to Sell Stocks

At the urging of Chief Daryl F. Gates, two officials of the Los Angeles Police Department--one a civilian computer manager and the other the department’s chief spokesman--have sold their stock in a company that will provide the city with an electronic stolen-car recovery system.

The stock sale followed a meeting of top LAPD officials last week at which Gates expressed dismay that any of his top aides would have purchased stock in LoJack Corp., the Massachusetts firm involved in the project.

“We are concerned about this. I would hope the top staff of this department wouldn’t buy any LoJack stock,” Gates said. “Given the sensitivity of the project, I wish no one had bought any stock.”

Bought Stock Last Year

Gates spoke out after learning that Charles Drescher, civilian commanding officer of LAPD’s information resource division, and Cmdr. William Booth, the department’s chief spokesman since 1977, both had purchased LoJack stock last year.

At the time, LoJack Corp. was lobbying for passage of state legislation that would have permitted it to set up operations throughout California. The legislation was dropped, however, after an amendment was introduced that would have forced the firm to share its technology with rival companies.

LoJack and the LAPD then began talks that led in March to unanimous passage by the City Council of a contract in which the firm will provide the city with $1.5 million in computers and electronic tracking devices in exchange for the right to sell car security transponders to the public.

With the LoJack system, police can track stolen cars using small transmitting devices hidden in the vehicles and tracking devices in patrol cars that can monitor the movements of the stolen vehicles.

In urging his top officials to avoid buying stock in LoJack, Gates stressed that he saw no conflict of interest in the actions of Drescher and Booth. But, he said, the LAPD views its contract with LoJack as sensitive because the company holds a temporary monopoly on the technology required to plug into its recovery system.

While Gates avoided any rebuke of Booth for buying 400 shares of LoJack stock last year, he singled out Drescher for criticism, calling his purchase of 500 shares a “very unfortunate” decision.

Booth, Gates said, “certainly doesn’t make decisions about this issue. As for Drescher, he’s not in the line (of command on LoJack), but he does have department computer and information systems. I think it was very poor taste and very poor judgement.”

Responding to the comments from Gates, at a meeting with The Times and five top LAPD commanders last Wednesday, Booth immediately sold his stock, which he had purchased for about $3 a share, making a profit of about $500.

“I suffer no feelings of conflict or anything wrong, but I do wish I had never bought it,” Booth said.

Drescher, who purchased his shares at $5 last July, sold his shares Monday at a slight loss. He said he saw no conflict at the time he bought the stock, but had begun to wonder about the issue and was happy to dispose of the stock in view of Gates’ comments.

Contract Defended

Gates defended LAPD’s contract with LoJack, a firm that so far operates in Massachusetts and Florida. In an earlier controversy, a Massachusetts State Police officer drew criticism for profiting from LoJack stock.

“All I want to do is solve the damn auto theft problem and this seems to be a way to do it,” Gates said. “I don’t see how we can lose. They are giving us the equipment. They are also giving us a contract that says it can be broken if somebody else comes along.”

City Councilman Zev Yaroslavsky, who introduced the proposed contract with LoJack in the City Council, first uncovered Drescher’s purchase of stock and criticized LAPD officials for not keeping Gates and the City Council better informed of any possible controversies relating to LoJack.

“I do think the higher-ups need to be sensitive to the problems being presented,” Yaroslavsky said. “This is an issue of public trust.”

The LAPD said that all its employees directly involved with LoJack have promised not to purchase stock in the company.

According to LoJack officials, the company’s earlier stock controversy involved a Massachusetts police official who allegedly made a profit in LoJack stock while involved in testing the system.

LoJack President C. Michael Daley said the firm, after a management reorganization three years ago, has been expanding its sales and has launched an aggressive national marketing program.