Bradley Discloses New Details on Investments : Preferential Treatment by S&L; Indicated; City Attorney Plans Lengthy Interview of Mayor

Providing a new, corrected account of his controversial financial portfolio, Mayor Tom Bradley on Friday reported six previously undisclosed investments, and provided details about a pair of hot initial stock offerings--each sold the same day it was acquired--that were difficult for the average investor to obtain.

Documents released by the mayor’s office also indicate that Bradley received special treatment when he made an unusual investment in Gibraltar Financial Corp. “junk bonds” at a time when they were not available to the general public, according to financial analysts.

Meanwhile, it was learned, the city attorney’s office has arranged to interview Bradley for three days next week as part of its wide-ranging investigation into Bradley’s financial dealings, particularly his ties with firms or individuals doing business with the city.

3 Days Set Aside

Sources told The Times that Wednesday, Thursday and Friday have been set aside for the interviews. Neither City Atty. James K. Hahn nor his spokesman could be reached for comment Friday.

The new disclosures, contained in amended statements of economic interest for the years 1984 through 1988, show that Bradley made dozens of errors and omissions in filling out the financial disclosure statements, which California’s politicians are required to file each year.

Bradley blamed the mistakes on his passion for protecting his family’s privacy.

“When the time came each year to summarize my private financial affairs . . . I took on the job myself,” Bradley said in a prepared statement. “Delegating the task to my staff and accountant would, I believed, have been an unnecessary intrusion into my family’s private affairs.”

The result was a series of misidentified securities, missing or inaccurate dates of transactions, erroneous names of investments, miscalculated percentages of ownership in partnerships and contradictions that heightened the suspicions and intrigue surrounding Bradley’s investments, which are the subject of a federal inquiry into whether the mayor was given access to inside information.

In Washington, David Runkel, a Justice Department spokesman, described the federal investigation of Bradley as “ongoing.” He declined, however, to describe what actions by Bradley were under study by FBI agents. Another source familiar with the investigation said no actions were imminent and that investigators have “a long way to go” before concluding the inquiry. Some of Bradley’s dealings came to the attention of the federal government during its probes of the investment firm of Drexel Burnham Lambert and associates.

A source close the mayor and familiar with the investment details insisted that “most of the questions regarding insider trading are cleared up” with the new reports. “There’s no foundation to it,” he said.

The long-promised release of the 66 pages of documents, accompanied by a 25-page personal narrative, comes after months of work by a team of private lawyers, who are representing Bradley.

In addition to the city attorney’s office, several city agencies are conducting probes of possible conflicts of interest by the mayor. The state Fair Political Practices Commission and the U.S. Justice Department and Securities and Exchange Commission are also investigating some aspects of the mayor’s financial dealings.

Within minutes after the amended financial disclosure statements, requested by the FPPC, were filed, reporters lined up for copies.

Shed New Light

Bradley said Friday that the amended forms shed new light on his complex investment portfolio. And he played down the many errors as mostly “highly technical” or as relatively insignificant mistakes and omissions.

“I welcome the opportunity to set the record straight,” Bradley said in the prepared statement.

He added that the documents, “combined with a variety of other information, offer a far more comprehensive view of my financial transactions than the one I had when I completed the original statements of economic interests.” Bradley, in line with a policy he has been following since shortly after the controversies over his finances began erupting in late March, declined to meet with reporters or answer questions.

The documents released Friday confirmed a Times report that he made an unusual investment in Gibraltar Financial Corp. junk bonds at a time when they were not available to the average investor. Bradley indicated that his $100,000 investment was earning him interest in 1986, before the bonds were even registered for public trading with the Securities and Exchange Commission.

“For an individual, that’s very unusual,” said Irv Einhorn, former Los Angeles area regional administrator for the SEC. “The average person would not be offered non-registered bonds.”

“He knew someone who had access to this, either at the company, or investment bankers,” Einhorn said.

There was nothing improper about Bradley’s access to the bonds, a source in the mayor’s office said, because the mayor was properly qualified to participate in the private placement, which was handled exclusively by Drexel Burnham’s high-yield bond department, then headed by Michael Milken. Milken has been indicted on charges of insider trading and other securities violations.

The source, who asked not to be named, said the mayor’s broker at Drexel, whom he declined to identify, was “participating in the private placement” and made the offering available to Bradley. “It would have been available to anyone similarly situated.”

Bradley had erroneously reported the Gibraltar junk bond as “common stock.”

Earned Quick Profit

While the mayor lost most of his investment in Gibraltar, he apparently earned a quick profit on two stocks, Worlds of Wonder and L.A. Gear. Both were hot, hard-to-get new issues of stock that the mayor sold on the same days he acquired them. He made profits of about $1,000 on each.

In addition, Bradley disclosed on Friday other stocks that he had failed to report in past years. These were investments in Cadence Design Systems, Inc., CVN Companies, American Insured Mortgage Investors and Columbia Savings & Loan.

Additional information about the mayor’s relationship with Far East National Bank, which figures prominently in the investigation, also was revealed Friday. Bradley held a certificate of deposit at the bank, which he used as collateral to get an 8.2% interest rate loan in 1988, the same year Bradley was paid $18,000 to serve as an adviser to Far East.

In March, he returned the $18,000, saying he had not realized that the bank did business with the city. The controversy was fanned when it was learned that the day the mayor called the city treasurer about Far East’s status, the bank got $2 million in city deposits. The circumstances have become a central part of the city attorney’s probe and precipitated a dramatic City Council hearing last month on the treasurer’s office practices. Bradley denied trying to influence the treasurer.

The mayor also reported for the first time a loan of an undisclosed amount from Columbia to a Riverside County real estate partnership, KSTJ II. One of Bradley’s partners in that deal is Juanita St. John, another figure in the investigations. She headed the mayor’s controversial city-funded Task Force for Africa/Los Angeles Relations. St. John has been charged by the city attorney for failing to produce subpoenaed records involving use of $180,000 of tax funds.

The previously undisclosed Columbia investments involve junk bonds and warrants that Bradley held in 1985 and sold in 1986. Previously, the mayor had reported only owning between $10,000 and $100,000 in common stock in Columbia, whose vice chairman is Abraham Spiegel, a close friend and political supporter of the mayor.

The Times earlier reported that the mayor’s lawyers were attempting to determine what role Spiegel may have played in Bradley’s personal investment activities. A source close to the mayor said that Spiegel’s office served as a conduit to the mayor on his investment of common stock in Columbia.

An aide to the mayor could not immediately provide details on the Columbia investments and declined to discuss any of Bradley’s dealings with Spiegel.

Unusual Purchase

Columbia Chairman Thomas Spiegel, Abraham Spiegel’s son, has said he recommended and helped finance an unusual purchase for former Assistant House Majority Leader Tony Coelho of a $100,000 junk bond issued by Drexel Burnham Lambert. Rep. Coelho, a Merced Democrat, later resigned over the flap regarding his purchase of a junk bond in BCI Holdings.

Bradley disclosed Friday that he, too, had acquired a BCI junk bond used to finance the takeover of Beatrice Foods. But this was a different sort of transaction from Coelho’s, the documents show. Previously, the mayor had incorrectly listed the junk bond investment as “BCI Holdings common stock.”

Columbia and its top officers are being investigated in connection with Milken, who recently resigned from Drexel.

The report of new Columbia investments raises as many questions as it answers.

Bradley did not reveal Friday when he purchased the junk bonds and warrants or the series of bonds he acquired, making it impossible to determine how much he earned on the investments. On the original 1985 report, Bradley listed the value of his Columbia stock as between $10,000 and $100,000. With the addition of the junk bonds and warrants, his Columbia investments exceeded $100,000.

Previously, the mayor reported that he obtained the Columbia common stock in 1979 and 1984. Unlike other investments in which he provided specific dates, the mayor failed to report when he purchased the Columbia stock as requested by the FPPC in June.

Spokeswoman Sandra Michioku said that the FPPC asked Bradley to provide specific dates for all of his investments dating back to 1984.

“We’ll just have to take a look to see whether what they submitted is adequate,” Michioku said. “We haven’t received the statements yet.”

Times staff writers Ronald Ostrow, Scot J. Paltrow and Tracy Wood and researcher Tom Lutgen contributed to this story.