THE BRADLEY PROBES
Following are the known investigations concerning Mayor Tom Bradley’s finances, campaign funding and possible conflicts of interest in office:
City Attorney--The Los Angeles city attorney is conducting a comprehensive investigation of all possible conflicts of interest by the mayor. The probe began with a look at the mayor’s relationship with two financial institutions doing business with the city: Far East National Bank, where he served one year as a paid adviser, and Valley Federal Savings & Loan Assn., for which the mayor was a paid director for more the 10 years. Other concerns are the Task Force for Africa/Los Angeles Relations, which received $400,000 in city funding while the mayor maintained lucrative real estate investments with its director, and Drexel Burnham Lambert, the investment firm where Bradley had traded with a junk bond unit run by since-indicted financier Michael Milken. The office is looking at non-insider-trading aspects. City Atty. James K. Hahn independently launched the investigation on March 31. He later asked the Los Angeles Police Department to join the inquiry, and two detectives have been assigned to the case. The investigation is expected to take several more months to complete.
U.S. Department of Justice--The Justice Department’s Public Integrity Section has opened a preliminary criminal investigation into the mayor’s relationship with Drexel Burnham Lambert. The inquiry is believed to focus on whether Bradley received preferential treatment from Drexel and whether Drexel offered investment opportunities with the expectation of receiving favored treatment from the city. In addition, the U.S. attorney in New York has subpoenaed Bradley’s record of transactions
with Drexel as part of a “broad-based” inquiry into the firm’s dealing with politicians.
Securities and Exchange Commission--The SEC is reviewing Bradley’s stock and bond trades for possible evidence of insider trading--the illegal practice of trading securities on non-public information. The SEC opened its inquiry after Bradley’s annual statements of financial interest were forwarded to the federal agency by the city attorney. Since then, the SEC has forwarded copies of the financial interest statements to the U.S. attorney’s office for its investigations.
City Controller--The Los Angeles city controller on April 21 independently launched an audit of the city’s transactions with Far East bank and the annual financial reports of the Africa Task Force. A spokeswoman for City Controller Rick Tuttle said the audits should be completed by June 30, in time to be released with the regular annual audit of the city treasurer.
City Clerk--The Los Angeles city clerk is conducting an audit of Bradley’s most recent campaign fund. The city clerk opened the audit on May 11 at the request of the city attorney. While the audit will attempt to identify and reconcile all campaign contributions, it is known to be focusing on whether firms or individuals, by making several contributions, may have violated the city’s limits on donation amounts. City Clerk Elias Martinez said it is unclear how long the audit will take to complete, as his office is already conducting similar audits on the campaigns of three City Council members.
City Council--The Los Angeles City Council’s Governmental Operations Committee does not have an active investigation under way, but has conducted three hearings, which sought to learn the focus, methods and progress of the
city attorney’s investigation. The committee has also questioned City Treasurer Leonard Rittenberg about city policies on investments in minority-owned banks and, in particular, its relationship with the Far East bank. Several council members have said the council should take a more active investigatory role, and some members say they favor hiring a special counsel to conduct a probe.
Others--The state Fair Political Practices Commission is cooperating with the city attorney’s probe. FPPC spokesmen have said the state agency could open its own case when the city attorney’s inquiry is concluded.
The state attorney general’s office is tentatively planning to conduct an audit of the Africa Task Force to determine whether its public funds were properly spent. The state, however is awaiting the outcome of the city controller’s audit before launching its own.
The federal controller of the currency is conducting an examination of the Far East National Bank. A spokesman for the federal regulatory agency said the audit is routine and coincidental with the other ongoing inquiries.
The Los Angeles County district attorney’s office was asked in April by City Atty. Hahn if it had an interest in investigating Bradley. The district attorney’s special investigations unit initially declined the invitation, but has continued to monitor the case through the newspapers, a spokesman said last week. The federal Urban Mass Transit Agency has conducted a review of its transactions with the city, which were processed through a non-interest-bearing account at Far East bank. A UMTA spokesman said proper procedures were not followed by the bank and city. But the federal agency decided not to require the city to pay it the estimated $12,000 in lost interest.
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