Mayor Says He Expects Complete Exoneration : Bradley Intentionally Refusing to Defend His Financial Dealings, Instead Relying on Probes

Facing what he acknowledged as the toughest test of his career, Mayor Tom Bradley said Tuesday that he has intentionally embarked on the politically dangerous tactic of refusing to defend his controversial financial transactions in the expectation that he will be exonerated by the formal investigations now under way.

But while Bradley portrayed the city and himself as moving steadily ahead despite the state of crisis, the toll of the mounting debate over his behavior was clear.

Asked, for example, what he hoped to accomplish in the remainder of his four-year elective term, the mayor replied: “A speedy conclusion of this inquiry.”

Supports Hahn Investigation

Referring to the burgeoning controversy over his finances during a luncheon with Times reporters and editors, Bradley said he objects to private calls by high-ranking city officials for appointment of an independent counsel to investigate the case. He said he fully supports the inquiry now under way by City Atty. James K. Hahn.

Despite his self-invoked silence, however, Bradley also illuminated aspects of his financial history and his views on the furor that has cast a shadow over his 16-year tenure as the city’s political leader and provoked unprecedented questioning at City Hall.

--Bradley acknowledged that he has stock accounts at Drexel Burnham Lambert and other investment firms, but said he had never discussed transactions with Drexel’s former junk bond chief, Michael Milken, a prominent Bradley supporter who is under indictment for insider trading and securities violations. Bradley also said he did not consider it a conflict of interest to take mayoral actions benefitting the firm that held his personal accounts.

--The mayor held firmly to his position that he did not involve himself in conflicts of interest with regard to his holdings. He said he did not consider it a mistake to have taken money to act as an adviser to local financial institutions while serving as mayor.

But if he could relive events, Bradley said, he would have shown “even greater caution than I felt I had exhibited.”

--The mayor added that throughout his administration he has relied on himself, and not on the city attorney, to determine whether specific circumstances pose conflict-of-interest problems. Likewise, he said, he alone made the decision to refuse to discuss specifics about the pending investigations. But he said that move came not because his attorneys asked him to remain silent but because he does not believe that his side will receive an accurate airing.

Bradley insisted that he has “the perfect answer” to the myriad and persistent questions raised about his personal finances, but he refused to give it.

“The truth as I see it will come out,” Bradley said.

In more than one hour of give-and-take, Bradley also sought to downplay the potential political impact of lengthy investigations on what has been perceived as a career marked by personal integrity. Bradley’s refusal to answer questions about his finances has raised eyebrows even among long-time defenders, and the mayor acknowledged the potential danger of his strategy.

“I made the judgment I made, right or wrong,” he said. “Whether it is harmful or helpful, time will tell.”

The mayor said he does not expect ambitious City Council members to “look for ways of trying to attack me personally,” but he asserted that he will aggressively press his agenda in disputes with the council over the city’s upcoming budget. A battle over the budget, centered on conflicting approaches backed by Bradley and the council’s Finance Committee chairman, Zev Yaroslavsky, looms next week.

“I will not back away,” the mayor vowed.

Only weeks after he won an unprecedented fifth term as mayor, Bradley faces three separate investigations. City Atty. Hahn’s inquiry, which is expected to continue for months, centers on Bradley’s financial relationships with two local institutions. Far East National Bank last year awarded Bradley $18,000 to serve as the only paid member of its advisory board. The second firm, Valley Federal Savings & Loan, paid Bradley up to $24,000 a year since 1978 to serve as a director.

Bradley initially denied knowing that the firms were active with the city, but documents released in recent weeks have indicated that Bradley knew that Far East held city accounts. Bradley also approved city measures affecting Valley Federal subsidiaries before he left the board earlier this year.

The mayor also faces inquiries by the Securities and Exchange Commission, which is looking into his investments with Drexel Burnham Lambert, and the Fair Political Practices Commission, which has launched two investigations of the mayor.

Not Taking His Time

Bradley said he has not yet been questioned by Hahn’s aides, but said members of his staff have been interviewed in recent days. The investigation, he said, is taking “practically none” of his time.

The mayor’s own attorneys, Bradley indicated, have yet to receive a full package of materials relating to his financial transactions.

“I don’t know that they have all that,” he said. “ . . . When they’re ready, they will get anything of that nature that they want.”

Bradley turned aside private suggestions by council members that the investigation be taken over by an independent lawyer. Council members are known to question the breadth of Hahn’s investigation and have expressed concerns that it will not be forceful enough.

“The city attorney is independently elected, he’s answerable to the people, not to the mayor or to the City Council,” Bradley said. “ . . . He is the appropriate person to conduct such an inquiry.”

The mayor swatted down Councilman Michael Woo’s current consideration of recommending appointment of a special counsel. “I don’t know that Mr. Woo carefully thought it through,” Bradley declared brusquely. “I don’t know that anybody has given him legal advice on it.”

“I for one want to get the thing over,” he added. “And I certainly would not want to have at this point of the game, after the city attorney has conducted as much of the inquiry as he can, somebody else . . . brought in to carry on and duplicate all that he has done.”

The mayor also said that he has launched his own informal inquiry into the activities of his business associates, but he said he had turned up no information pertinent to his case.

While he refused to delve into specifics about his ties to Far East and Valley Federal, Bradley on Tuesday did defend the general notion of working for outside concerns while serving as mayor.

“I don’t see it as a big prohibition,” he said. “It’s a question of what you do in that position.”

Documents related to the case have indicated that Bradley both approved measures relating to his business contacts, and, in his dealings with city officials, spoke about them. But he defended the overall practice of speaking for his allies.

“I was there as a service agent,” he said, referring to his mayoral role.

The mayor, citing his self-imposed ban on specifics, refused even to concur with City Treasurer Leonard Rittenberg’s statement that Bradley, in discussing Far East with Rittenberg, had not applied untoward pressure to deposit city accounts in the bank.

“I have the perfect answer. Let me just leave it at that,” Bradley said. Pressed on whether Rittenberg’s comment was “the perfect answer,” the mayor replied: “It’s one of the perfect answers.”

Offering more detail than he has in the past about his financial holdings, Bradley said that he has had “several accounts” at Drexel Burnham and other brokerages, but insisted that controversial junk bond chief Milken did not, to Bradley’s knowledge, involve himself in the mayor’s portfolio.

“I don’t ever recall talking to Michael Milken about stock,” the mayor said. “I don’t recall ever talking to him about any stock.”

The mayor said he was also “not aware” that he had ever been allowed to purchase stock that was not available to the general public.

Bradley also indicated that he had no records specifying the dates of his stock purchases and sales, although records such as that are required by the Internal Revenue Service. The mayor had previously promised to make the dates available to Times reporters if he could determine them.

Asked whether he had considered it a conflict of interest to weigh in on matters involving Drexel while having accounts with the firm, the mayor replied simply: “No.” Drexel officials have said that the mayor intervened at their behest when SEC officials were considering shifting the firm’s junk bond accounts out of the Beverly Hills office. Bradley called Rep. Tony Coelho (D-Merced) and asked him to lobby for the firm’s continued presence in Beverly Hills, officials said.

Shows Some Impatience

Despite his decision not to speak openly about his side of the case, Bradley indicated a certain impatience with the recent turn of events and what is expected to be months of investigations into his administration.

“If there is any No. 1 thing that I’m most proud of, it is that record of honest integrity, prudent management of the city,” he said. “And that’s the reason that I have been pained and concerned about the . . . press coverage that has taken place in the last several weeks.

“As soon as that inquiry is finished, I’ll be prepared to talk to the whole world, and nobody could want it to be finished faster and more fully than I, because I’m the one who’s had to suffer the battering.”