THE MAYOR UNDER FIRE : The City Inquiry : City Attorney Widens Scope of Investigation

The city attorney’s investigation into Mayor Tom Bradley’s financial holdings has widened to include a comprehensive look at all potential conflicts of interest involving the mayor, senior officials indicated Wednesday.

The indication came when Councilman Michael Woo, in a meeting of the council’s Governmental Operations Committee, asked Assistant City Atty. Charles Goldenberg whether the investigation he is directing will look at the relationship between city officials and the troubled investment firm of Drexel Burnham Lambert.

Bradley has acknowledged that he had an account at the Beverly Hills office of Drexel Burnham Lambert and has an interest in a Drexel real estate partnership. He also interceded on the firm’s behalf when federal officials sought to move its troubled “junk bonds” department from Beverly Hills to New York. The mayor has said he has done nothing illegal.

“We are looking at everything that we believe bears on possible conflict of interest arising from the mayor’s outside financial interests,” Goldenberg said in response to Woo’s query. “To repeat, it’s the conflict of interest, outside financial interests. And I believe that that would answer the issues that you brought up.”

Assistant City Atty. Anthony Alperin later added, “The investigation is a broad investigation into all conflict-of-interest matters relating to the mayor’s financial dealings.”

Inquiry’s Range

The statements were the first public indication of a wide-ranging probe by the city attorney’s office. In earlier statements, City Atty. James K. Hahn said the effort centered on the initial aspect of the Bradley controversy, the mayor’s receipt of salaries from two local lending institutions, Far East National Bank and Valley Federal Savings and Loan Assn.

Far East National Bank, in which the city had deposited money, paid Bradley $18,000 in 1988 for services as a consultant. Valley Federal Savings & Loan paid Bradley up to $24,000 a year for serving on its board of directors. A Valley Federal subsidiary has received favorable land-use decisions from the council and the mayor.

The mayor has since resigned from the paid positions, returned the $18,000 from Far East and, in a speech to the council, labeled his acceptance of outside income a mistake in judgment.

The city attorney’s office was known also to be investigating a task force formed to drum up business for Los Angeles firms doing business in Africa. It has also forwarded to the Securities and Exchange Commission Bradley’s statements of economic interest, which included stock purchases in companies that later became part of a federal investigation of Drexel Burham Lambert and Michael Milken, the firm’s former high-yield, or junk, bond chief and a prominent Bradley supporter. Milken is under indictment on charges of ssecurities fraud and insider trading Goldenberg and Alperin on Wednesday refused repeatedly to discuss the specific areas under investigation. But Goldenberg said they did not include the issue of insider trading, which is under the purview of the SEC.

Rebuke From Molina

Their refusal--which the attorneys said was required to ensure the independence of their investigation--drew a sharp rebuke from Councilwoman Gloria Molina, who expressed reservations about the breadth of their effort.

“You’re going to come back, and you’re going to say, ‘This is what we investigated’ . . . but let’s say my list is longer. At that point what do we do? Send you back?” she asked.

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“People have been asking me what do we know? Nothing. Who is being interviewed? We don’t know,” she added later. “I feel a tremendous discomfort not knowing what allegations you are pursuing, a tremendous discomfort because I don’t know that at the end of your investigation you are going to create a (report) that is going to really clear this whole thing up, that everything is going to be pursued.”

Molina and Woo said later that they will probably forward to the city attorney’s office a list of inquiries they would like to see covered in the investigation. Councilwoman Joan Milke Flores, the third member of the committee that is heading the council’s review of the Bradley controversy, said she has no plans to issue such a list.

Besides featuring repeated volleys between Molina and Goldenberg, the committee hearing also provided an update of the city attorney’s investigation.

According to Goldenberg, attorneys and investigators looking into Bradley’s finances have completed about 30 interviews and have obtained or requested thousands of pages of documents. But, he said, it will still take several months before the team reaches its conclusions.

‘Thorough and Complete’

“Our goal remains . . . to do a thorough and complete and fair investigation,” he said. “And we’re going to follow every lead and try to be as competent as we can possibly be.”

Committee Chairman Woo, meanwhile, said he has not ruled out two options he has previously discussed--calling Bradley to testify before the committee or asking the city attorney to appoint an independent counsel in the case.

But the councilman said he did not believe it is necessary “at this point” to call for an independent counsel, nor has the committee made “specific plans about either inviting or not inviting” Bradley.

In addition to the city attorney and council inquiries, Bradley faces separate SEC and Justice Department investigations and an unrelated probe by the Fair Political Practices Commission.