Bradley Retains Attorney in Probe of Links to Banks

Mayor Tom Bradley disclosed Wednesday that he has retained a top civil attorney and a politically influential law firm to “protect my interest” in the city attorney’s investigation of his ties with two financial institutions.

Meanwhile, the prospect arose that the City Council may hire special counsel to look into whether Bradley violated conflict-of-interest laws when he received payments for serving on the board of Valley Federal Savings and Loan Assn. and as a member of the Board of Advisors for Far East National Bank, firms that have had dealings with the city. The Times learned that several City Council members are pressing for the hiring of a special counsel.

City Investigation

The mayor’s immediate concern, however, was the investigation by City Atty. James K. Hahn, which Bradley welcomed when it was announced.

Details of the investigation began emerging for the first time. One target of the Hahn staff, The Times learned, was to find out just when the mayor resigned as an adviser to the Far East National Bank.

That is important because Bradley, in March, made a telephone call to the city treasurer asking whether city funds were about to be withdrawn from Far East and other banks. The mayor has said he was no longer employed by Far East when he made the telephone call, but said that his resignation--last December--was done orally.

In pursuing the investigation, Hahn, in a letter to Police Chief Daryl F. Gates, asked for help from the Los Angeles Police Department.

‘Preliminary’ Inquiry

Assistant Police Chief Robert Vernon said two detectives from the bunco and forgery division will meet with Hahn next week to determine what help the city attorney needs. Asked whether this was a criminal investigation, Vernon said, “No, at this point no, nothing criminal has been alleged. At this point I would term it a preliminary inquiry into the facts.”

The most dramatic of the day’s events came in the morning, at a City Hall press conference Bradley had called to announce a new commission to assist the disabled.

Asked whether he had retained his own counsel, Bradley said he had asked for help from Daniel Fogel, a well-known Los Angeles attorney, and the firm of Manatt, Phelps, Rothenberg & Phillips.

“Somebody has to look carefully at every possibility discussed with the city attorney, to be--in essence--working on that matter full time to protect my interest, and I am busy carrying on the work of the city and certainly would not try to divide that attention,” Bradley said.

Asked who was paying the attorney, Bradley said “the city is not paying.” Later, spokesman Bill Chandler said payment would be worked out “between the mayor and his attorneys.”

Role Is Confirmed

Fogel confirmed he was helping the mayor. “I was retained by the mayor to advise him in connection with the city attorney’s inquiry and the Manatt firm is acting as co-counsel,” he said. Fogel declined further comment.

Mickey Kantor of the Manatt firm said “I am not going to comment on anything except to say we have been retained as co-counsel with Dan’s firm.”

Fogel is a partner in Fogel, Feldman, Ostrov, Ringler & Klevens and has been active in local, state and national professional associations. Kantor is a well known Democratic Party strategist who is influential in internal party affairs. Most recently, he directed the unsuccessful campaign to permit oil drilling at the Pacific Palisades, a cause supported by Bradley.

The idea of the special counsel to the City Council is supported by several council members, said Councilman Mike Woo, chairman of the Government Operations Committee, which is concerned with Hahn’s probe.

Council’s Concerns

Sentiment for an independent council inquiry, Woo said, comes from members who have expressed “some concern whether the city attorney will be able to proceed with a truly independent investigation. Some members of the council want an independent investigation” by someone other than an elected official.

One council member said Hahn’s office has a built-in conflict of interest in this situation because the city attorney is both a criminal prosecutor and, under the City Charter, counsel for the mayor.

Council members also questioned whether Hahn’s office, which handles city business and civil matters, has the capacity for a complex conflict-of-interest probe.

Woo, however, said he personally does not “see the need for” special counsel now.

Hahn’s investigation is touching on several areas of the mayor’s involvement with the savings and loan and the bank, sources said.

One key area is to determine whether Bradley was still employed by the bank when he received on March 21 a telephone call from Henry Hwang, chairman of the bank.

Call to Treasurer

After Hwang asked whether the city was going to withdraw its deposits from his and other banks, the mayor said he called City Treasurer Leonard Rittenberg and inquired whether that were true. He also said he asked Rittenberg whether the city had any deposits in that bank.

Rittenberg said the city had deposits in Far East Bank. At that point, Bradley said, he decided to return the $18,000 Far East had paid him for serving on the Board of Advisors. He said he decided at that moment to send Hwang a letter and return the funds.

In the letter, Bradley said: “As you know, I terminated my relationship with” Far East in December. Thus, Bradley said he was not on the Far East payroll when he called Rittenberg.

However, when The Times earlier this month asked Bradley to document his resignation, his aides replied that it was given orally and there was no documentation.

Subsequently, The Times obtained a copy of Far East National Bank’s report for 1988. That report included an independent auditor’s report signed Jan. 20, 1989.

That report still listed Bradley as a member of the Board of Advisors.

Asked about that, press spokesman Chandler said he had no explanation.

Bradley, at his press conference, reiterated his support for Hahn’s investigation. “Let me remind you I encouraged the city attorney to start a full investigation, offered my cooperation and support,” he said.

Bradley called the use of the police, first disclosed by the Los Angeles Herald Examiner, “a routine action taken over and over again.” Chief Vernon said the department has been called in to help in similar investigations, most recently in the well-publicized investigation of a former head of the General Services Administration and in a probe of the Housing Authority.