Reluctant Council Edges Toward Probe of Bradley

The Los Angeles City Council is edging warily toward an unfamiliar and uncomfortable role--the investigation of a sitting mayor.

A committee headed by one of the council’s more reflective, least combative members, Michael Woo, today begins the task of monitoring the progress of a probe, already under way by the office of City Atty. James K. Hahn, of Mayor Tom Bradley’s relationship with two financial institutions that have done business with the city.

With Woo’s Governmental Operations Committee testing the waters, the City Council is going to have to decide whether it wants to become a participant in the conflict-of-interest investigation--a role it has not played since a 1973 inquiry into former Mayor Sam Yorty’s ties to Occidental Petroleum Corp.--or whether it wants to act mainly as a “watchdog,” the term Woo used to describe his committee’s initial function.

Woo said Tuesday that the job of his committee is to determine whether the scope of the city attorney’s probe is broad enough and whether the city attorney has enough resources and legal authority.

Many Options Available

If the council decides that the city attorney is lacking in any of these areas, it can take a variety of actions--issue subpoenas, take sworn testimony or even hire its own legal counsel. In other words, the City Council can become a partner in the investigation, a prospect that most of the members apparently do not relish.

A council committee lacks the power to prosecute, but the publicity it could generate during a series of hearings into the mayor’s conduct could have an impact more harmful to a political career than the comparatively minor penalties that can be imposed for violating either the city’s code of ethics or the state’s Political Reform Act.

The code of ethics forbids a city official from encouraging the city to do business with anyone with whom the official has a financial interest. But the code has no penalty provisions.

The state law prohibits public officials from using or attempting to use their positions to influence government decisions in areas where they have a financial interest.

Under the act, fines of $2,000 per violation can be assessed. If someone makes money from violating the law, a fine up to three times the benefit can be imposed. If the violation involves a failure to report political contributions, an amount equal to the illegal contributions is subject to forfeiture in addition to a fine.

Three years ago, Los Angeles City Councilman Richard Alatorre agreed to pay $141,966 to settle an action brought by the city attorney for violating the Political Reform Act.

Record Settlement

The settlement, which grew out of accusations that Alatorre failed to disclose the source of campaign funds, was the largest amount ever paid in California for a violation of campaign laws. But today, Alatorre remains an influential member of the council, his brush with the law apparently having little effect on his political career.

Asked whether any members of the council were eager to take a lead in the investigation of Bradley, Woo pulled a curtain across his face, laughed and said, “To the contrary, I don’t sense there is a real eagerness, with the exception of one or two who may have reasons to want the mayor to look bad.”

Another member of the three-person committee, Councilwoman Joan Milke Flores, said she found it difficult to believe that Bradley set out to do something wrong.

“I don’t think he intentionally did anything to hurt the city,” Flores said earlier this week. “I don’t think he went into any of these things for personal gain. . . . I may be wrong, but I just don’t believe that Tom Bradley made a decision to be on someone’s payroll in return for which he would ensure that large deposits would be placed in their hands.”

The questions about Bradley focus on his role as a paid adviser to Valley Federal Savings and Loan Assn. and to Far East National Bank. Bradley paid back the $18,000 he received from Far East and insisted he was not aware that the bank was receiving large deposits from the city while he was working for Far East. But official documents indicated that Bradley’s office made inquiries last year to the city treasurer’s office and to the the Los Angeles Community Development Agency on behalf of Far East, during the time the mayor was being paid by the bank.

Woo said his committee will have a series of questions to ask the city attorney when they meet today.

“We’re going to ask whether the city should terminate its deposits with Far East. We’re interested in whether the mayor’s job is considered to be a full-time job, and whether it is legal to accept outside compensation.”

Woo said he will ask whether the city attorney plans to look into Bradley’s association with Drexel Burnham Lambert and its junk bond operation headed by Michael Milken, now under indictment for insider trading and securities fraud.

Stocks, Bonds

A Times study shows that Bradley built a personal investment portfolio, in part, based on trades in stocks and bonds involved in at least three corporate financial transactions handled by Drexel. Bradley has received political contributions from Drexel and from Milken’s brother, Lowell Milken. Bradley was instrumental in launching a congressional lobbying campaign to persuade the Securities and Exchange Commission to permit Drexel to keep its junk bond operation in Beverly Hills.

Moreover, Woo said he will ask the city attorney whether he plans to look into Bradley’s role in a nonprofit trade group, the Task Force for Africa/Los Angeles Relations, which has been funded at Bradley’s request and whose director is in partnership with Bradley in a real estate trust.

But Woo stopped short of saying that he thought the city attorney ought to broaden the investigation to include the trade group and the Drexel association.

“We want to make sure that all issues of public concern are properly dealt with,” Woo said.

Meanwhile, a spokesman for the city attorney’s office said that office was not prepared to tell the committee much about the investigation.

Won’t Say Much

“We’re basically not going to say much at all,” said Chief Deputy John Emerson. “I mean you can’t. You can’t get into the substance of the investigation. You know, ‘Oh boy, we have this document. Wonder what they’re going to say about that.’ It’s not fair. It’s certainly not professional. . . . Even in terms of where we’re going to expand (the investigation). That’s inappropriate.”

City Treasurer Leonard Rittenberg also is scheduled to testify today.

For the time being, Woo has said he is prepared to trust the city attorney’s judgment.

If it does not ask the council to issue subpoenas, the council will not, Woo said. Sources in the city attorney’s office say that, so far, their investigation has received the cooperation of everyone it has attempted to interview.

Moreover, Woo said that while there has been some discussion among council members about hiring a lawyer to work with the committee, he thinks such an action is premature.

Walter Zelman, executive director of California Common Cause, was critical of the way the city attorney’s office handled the Alatorre case, despite the record settlement. Zelman complained in a recent interview that Alatorre was “let off pretty easy,” but he predicted that both Hahn and Charles Goldenberg, who is heading up the city attorney’s probe, will be tougher on Bradley.

“Whatever internal tendencies the city attorney’s office might have, they are going to be ignored, given the visibility of the matter at hand,” Zelman said. “I don’t think the city attorney’s office can do anything but have the most comprehensive, thorough and objective evaluation. And I think that is what we will get.”