Donors’ Business Ties to City : Mayor’s Way of Financing Legal Fund Fans Concerns

On a sweltering Saturday morning three weeks back, Mayor Tom Bradley invited more than two dozen supporters to the mayoral mansion and asked them to raise $300,000 for the lawyers battling to salvage his political career.

It was a group bound together by more than affection for the mayor.

In his hour of need as he battles conflict-of-interest allegations, Bradley reached out to people who have established extensive business ties to the city during his 16-year mayoral reign and who very much want to see him weather the storm over the ethics of his Administration.

Among the guests were:

--Lobbyists who represent companies seeking lucrative city contracts and a way to slash red tape. Two are former Bradley appointees to city commissions who are quickly transforming their cachet as City Hall insiders into cash.

--Developers whose multimillion-dollar projects have been subsidized by the Community Redevelopment Agency or who have proposals plodding through other realms of the city bureaucracy. One is trying to lease office space to the city in a building on which he is losing money.

--A Westside Chamber of Commerce leader who has vowed to raise tens of thousands of dollars for Bradley’s defense, but whose own organization owes the city more than $50,000.

--A San Pedro businessmen who, five days after Bradley’s summit, was awarded a controversial contract worth $600,000 by the mayorally appointed Harbor Commission. The businessman, citing the contract, has decided not to contribute to the Bradley fund.

--A former Public Works commissioner who was part of a politically connected consortium that recently won the mayor’s backing for a multimillion-dollar development in Little Tokyo.

--The president of an insurance firm that has received nearly $2 million in business from the city’s Housing Authority. In some cases, the contracts were awarded without mandated competitive bids. (See chart on Page 28.)

“I think the mayor is making a terrible mistake,” said City Councilman Ernani Bernardi, a leading advocate of campaign finance reform. “He is just compounding his problems. . . . Right now, he should be going overboard to avoid any appearance of a conflict.”

Bernardi, who was elected to the council 28 years ago when Bradley was still a Los Angeles policeman, added that the mayor’s solicitation of money from people with city business only “reinforces the feeling that politicians are going to do what they want, no matter what the public thinks.”

But Deputy Mayor Michael Gage, who has been struggling to contain the political damage to his boss, emphasized that there is nothing unlawful or unusual about soliciting funds from people who have--or want--city business.

“There are rules governing from whom you can raise money and how much. And clearly, we have complied with all the rules,” Gage said, adding that “historically, people who do business with the city frequently are the contributors” to politicians.

Many of those who were invited to Getty House have contributed generously in the past and were considered a safe bet to pitch in again. Some, of course, have been with Bradley for years and could be expected to answer his call for help without thoughts of personal enrichment, despite the city business they have landed during his tenure.

Bradley’s fund-raising effort is, in a sense, indicative of the symbiotic relationship between politicians and business interests that often leaves the public wondering whether governmental decisions are based on merit or money.

Last May, in a brief statement to the City Council, Bradley conceded that even the appearance of a conflict must be avoided. He apologized for accepting outside jobs with two banks that did business with the city “because of the perceptions it created.”

But when it comes to raising money, be it for legal fees or election campaigns, the issue of how things look is often swept aside. And in this regard, Bradley has company.

Virtually every elected official accepts or solicits contributions from people who want something in return. They have become the principal financiers of a political system in which candidates must amass huge sums to gain office and stay there.

“The mayor is not doing anything much different from what every other government official does and has to do,” said Walter Zelman, executive director of California Common Cause. “He has major expenses, and it is almost impossible to raise that money from people who aren’t involved in city politics.

“We believe that it is a fundamentally unhealthy situation.”

Zelman, along with most other political observers, argue that until taxpayers agree to finance political campaigns, those with money will continue to have an edge through their contributions--or at least appear to have one.

Even the people Bradley summoned to his city-owned residence Aug. 5 cannot agree among themselves whether their participation raises questions of pay-backs and quid pro quo.

Take, for example, former Planning Commission chief Dan Garcia, who has made the lucrative leap from public service to private advocacy.

Since April, Garcia has registered as the attorney and lobbyist for eight companies, according to city records. His clients have development projects throughout the city that are either under construction or consideration.

Garcia emerged from Getty House as one of the mayor’s most vocal defenders.

“I don’t think there is an appearance problem,” he told a Times reporter, “unless you make one.”

Attorney Johnnie L. Cochran Jr., on the other hand, said he believes that there is a “perception problem” with seeking money from people who have financial links to Los Angeles government, himself included.

Cochran, a high-profile airport commissioner appointed by Bradley, received city legal business, sought contracts and used Bradley as a reference in obtaining clients for his law practice. And for that reason, he said, he is not personally donating to the mayor’s legal defense fund.

“In this scenario,” he said, “it raises less questions.”

He added, however, that he is raising money from others, most of whom are neither public officials nor people with city business.

To date, the mayor’s fund-raisers have refused to disclose how much has been collected for Bradley’s legal bills, which are said to be running $100,000 a month. Three pricey law firms are helping the mayor grapple with at least six inquiries into whether he used his office to help business associates and relied on insider information to buy various stocks and bonds.

Bradley has denied any wrongdoing but has yet to provide a detailed public accounting of his actions. He said he will do so after the investigations are completed.

Participants at the meeting were asked by the mayor to personally contribute $1,000 to his newly formed “officeholder committee” and to raise an additional $9,000 apiece from others.

When the group finished its hourlong session, Westside Chamber of Commerce official Dori Pye was particularly enthusiastic. She said she was going to collect twice the amount expected of her.

“It’ll be very easy,” declared Pye, a Bradley appointee to the city Housing Authority who has extensive contacts among developers and once bragged that “no chamber leader in the country has the relationship with city government that I do.”

As of last week, Pye said, she had raised $7,000 from an assortment of people in “corporate life.” Said Pye: “I call and say, ‘I’m raising funds for Mayor Bradley’s legal fees. I’d like a $1,000 check.’ They don’t really ask any questions.”

Asked whether she is soliciting money from individuals with business ties to the city, Pye promptly responded, “Of course. That’s a stupid question.”

Pye’s eagerness to raise funds for Bradley, however, stands in contrast to the commitment her Westside business organization has shown in coming up with money to pay an outstanding $53,000 debt to the city’s Department of Transportation.

“I refuse to get into that issue,” Pye snapped.

The Los Angeles Business Council, of which Pye is president, has failed consistently to turn over thousands of dollars it has collected while managing a city-owned parking lot in Westwood.

A few months ago, the city attorney’s office initiated collection proceedings against the Business Council because of its delinquency in forwarding money. City officials said they have not received a satisfactory explanation of the failure to pay and have terminated the city’s parking lot agreement with the Business Council.

The Business Council’s lawyer, Howard Blumenthal, said the entire sum will soon be repaid, but declined to discuss the dispute in detail.

Driving Force

A driving force behind Bradley’s current fund-raising effort is longtime confidante Maureen Kindel, who was the first to arrive at the summit and the last to leave. Kindel is a former president of the powerful Board of Public Works, whose mayorally appointed members control of millions of dollars in taxpayer funds.

Today, two years after resigning her post, Kindel is one of the city’s most active lobbyists. City records show that this year alone she has registered as a “legislative advocate” for 10 corporations.

In only the first three months of this year, according to the latest available records, Kindel collected $82,500 from her clients, some of whom have business ventures pending before city departments that she once oversaw.

Kindel said in an interview that she did not volunteer to help bankroll Bradley’s legal bills as a way to curry favor for herself or her clients. “I would give him money if I was a lobbyist or the head of a nonprofit foundation,” she said.

“As far as perception is concerned, I don’t think the perception (of Bradley) could get much worse,” she said, citing the stream of critical news stories about the mayor that “make his enemies rejoice and his friends very sad.”

Kindel acknowledged that “it is very distasteful” to solicit funds from people who contribute out of self-interest, but “we are trying to do it in the best way we can. . . . Sometimes we make mistakes.”

She said a “screening committee” has been established to determine when, or if, money should be returned to contributors who have controversial matters pending before the city. Already, she said, one of the men whom Bradley called for help has withdrawn from the fund-raising drive.

$30,000 in Contributions

He is Richard Holdaway, president of Kaiser International Corp., which operates a coal exporting business on land leased from the Harbor Department. Holdaway and his company have contributed nearly $30,000 to Bradley campaign coffers since 1985.

“If I raise money for Mayor Bradley right now,” he said, “people will say it’s a payoff.”

Holdaway’s fear is rooted in the fact that Kaiser International won a controversial contract from the mayorally appointed Harbor Commission only five days after the Bradley meeting.

The Harbor Commission voted to use Kaiser as a middleman to purchase coal-handling equipment from the Port of Portland and later assemble it on a yet-to-be-approved cite on Terminal Island.

For doing so, Kaiser will receive a fee of $600,000.

Councilwoman Joan Milke Flores, whoses district includes the harbor, has criticized the pact as “highly irregular,” one that “certainly gives all the appearance of being a deal put together to benefit Kaiser.”

Flores and other critics contend that the Harbor Department itself should have bought the so-called bulk loader, eliminating the “middleman profit.”

“Are we all such socialists that we can’t use the word ‘profit?,’ ” Holdaway countered. “Aren’t you allowed to be paid for your services?”

Port officials deny that Kaiser has received special treatment. They say the company negotiated a good purchase price from Portland and spared the harbor the cost of preparing an environmental impact report for the new Terminal Island coal facility, which would have been required had the equipment been purchased directly.

While there is no evidence that the mayor intervened on Kaiser’s behalf this time, he has in the past.

In 1987, Bradley went to bat for Holdaway’s firm with regional air quality officials who had denied operating permits to the company out of a concern that black dust from the facility was polluting the air and damaging boats.

Kaiser got its permits. Bradley, who had argued that Kaiser’s closure would bring economic harm to the region, was accused by boaters of selling out to a contributor.

“I think you have to allow people to donate to politicians without them coming under a cloud,” Holdaway said. “Not every politician is dishonest, and not every contributor is trying to gain influence.”

Hands down, the best-represented on Bradley’s guest list were developers. In all, there were six--not including the dozen others represented by lobbyists Bradley invited.

A Bradley-appointed commission is now drafting an ethics code that will address issues such as those raised by the mayor’s request for money from people with a financial stake in Los Angeles government.

“I think this is the kind of situation where officeholders have to . . . create some method to avoid conflicts where the public could reasonably feel that decisions are made on some basis other than there merits,” Commission Chairman Geoffrey Cowan said.

“In a way,” he said, “everybody is a victim--the public, the businesses that feel contributions are the only way to get business and the politicians who are put in the position of having to raise money from these people.”