Report to Urge Fining Bradley : But Hahn Probe Finds No Basis for Criminal Charges, Sources Say

As an unprecedented probe of Mayor Tom Bradley draws to a close, the city attorney has determined that the mayor should be fined for improperly reporting aspects of his personal finances, but city investigators so far have found no evidence of criminal wrongdoing, according to sources.

However, the report by City Atty. James K. Hahn is not expected to be completed until mid-September, sources familiar with the investigation said, and the early findings could be changed.

“At the very least” Bradley will be fined, a source said.

The failure, up to now, to find evidence of a criminal violation by the mayor means that Bradley appears to be surviving a major threat to his political career. But other aspects of his personal finances still are being investigated by the U.S. Justice Department.

Focus of Inquiry

Hahn’s office has been investigating whether Bradley violated conflict-of-interest laws by accepting payments from Far East National Bank and Valley Federal Savings & Loan Assn., both of which had dealings with the city. The inquiry has focused particularly on Bradley’s connection to Far East, which paid Bradley $18,000 a year as a member of its advisory board. Bradley made telephone calls last year to the city treasurer inquiring about city deposits in Far East, and the treasurer subsequently had $2 million deposited with the bank. The mayor said he did not try to pressure Treasurer Leonard Rittenberg into making the deposit, and Rittenberg has denied that he was pressured.

Sources said investigators have at this stage found no evidence of criminal violations by Bradley in connection with the deposits.

Investigators also looked at Bradley’s reports of his outside business interests, required by state conflict-of-interest laws. When those reports appeared to be incomplete and possibly erroneous, the state Fair Political Practices Commission and Hahn asked Bradley to file corrected versions.

When Bradley filed amended reports of his extensive holdings in stocks and property with the city clerk, Hahn’s investigators found that he earlier left out at least four major investments totaling more than $220,000.

And, the investigators learned, he incorrectly reported the amount of interest payments on a loan of more than $10,000 from Far East; neglected to tell of a loan of more than $10,000 from a stock brokerage; gave the wrong names of partnerships and corporations in which he held an interest and misstated the value of several of his investments.

All told, more than 100 errors were found on the amended Bradley reports which covered 1984 through 1988.

Hahn plans to recommend that the city file a lawsuit against the mayor to collect fines for his reporting violations, according to sources familiar with the investigation. Normally such violations are pursued by law enforcement officials through the civil courts, rather than through criminal prosecution.

Sandy Michioku, spokeswoman for the Fair Political Practices Commission, which generally enforces financial disclosure laws, said each violation is subject to a $2,000 fine. If the mayor is penalized for each of his violations, including technical ones, he could face more than $200,000 in fines.

However, such fines are subject to negotiation between the city attorney’s office and Bradley’s legal team.

In a similar case, San Francisco Mayor Art Agnos was fined $7,000 this month for failing to disclose more than $441,500 in real estate income he earned while serving in the Legislature.

In a well known case, dealing with expenditure of campaign funds rather than the reporting of personal investments, Los Angeles City Councilman Richard Alatorre was fined almost $150,000 in 1986 after Hahn filed suit.

Alatorre paid his fine from campaign contributions, as do most other politicians involved in such cases. Alan Ashby, spokesman for the state attorney general’s office, which rules on these cases, said, “in the past, we have approved” such use of campaign funds but “each case is reviewed on its own facts.”

On the more serious matter of criminal violations, a variety of sources close to the Hahn investigation said there is no evidence at this time that Bradley committed a crime.

Any criminal accusations, the sources said, would revolve around possible conflict of interest--specifically use of Bradley’s public office to benefit a company for which he worked. The City Council’s Finance and Revenue Committee and the City Administrative Office, as well as Hahn’s investigators, looked into the phone calls Bradley made to Rittenberg inquiring about the status of city deposits in Far East.

Council committee hearings provided sensational testimony of a reference to Bradley’s name being “whited out” on a city document, but there was no testimony linking Bradley to that act.

One source said investigators still could develop a criminal case against the mayor, but it is unlikely. “You can’t say ‘absolutely’ ” there will be no criminal charges, the source said. “The process still is going on. Anything can happen in two weeks.”

Sources said the scope of Hahn’s investigation, launched in March, is narrow, focusing solely on Bradley’s personal conduct, rather than recommending action on other aspects of the many-faceted controversy that has touched a number of Bradley associates and government officials.

Thus, sources said, the report will not make any recommendations related to Bradley business associate Juanita St. John, who is being investigated for failure to account for $180,000 in city funds allocated to a study-trade promotion group she headed, the Task Force for Africa-American Relations. Final disposition of that case is up to the Los Angeles Police Department and city or county prosecutors.

Nor will the report reach conclusions about another facet of the Bradley affair--whether he violated federal insider trading statutes with his stock dealings, the sources said. That is being investigated by the U.S. Justice Department.

That aspect of the investigations could pose the greatest threat to Bradley, according to legal experts interviewed by The Times. That is because many of his stock investments were with Drexel Burnham Lambert and the indicted head of its junk bond unit, Michael Milken, who recently resigned from the firm.

The Milken connection has resulted in an intensive look at the Bradley portfolio by federal investigators.

Security around the Hahn report has been intense. Investigators have declined to discuss it in detail with reporters, as have Hahn and his top aides.

Times researcher Cecilia Rasmussen contributed to this story

BRADLEY ROAD SHOW--Mayor Tom Bradley has an “area day.” Part II, Page 3.