New Probe to Audit ‘Sister Cities’ Project St. John Headed

City auditors will probe a Los Angeles “sister cities” program headed by Juanita St. John, a business partner of Mayor Tom Bradley already under investigation for possible misuse of city funds, it was announced Thursday.

Citing St. John’s “dismal track record in accounting for city money,” Controller Rick Tuttle said his office will audit the sister cities program, which St. John has overseen at Bradley’s behest in recent years. The audit will focus on a $35,500 city appropriation last year that went to pay off a July, 1986, debt in connection with a large reception St. John staged at a sister cities conference in Universal City.

The announcement came amid a swirl of developments in the controversy surrounding St. John.

The 58-year-old St. John stepped down as head of the sister cities program, issuing a statement Thursday that she was forced out by the mayor because of a “political decision” and “vicious and untrue” reports in the press. A spokesman for Bradley confirmed that St. John had resigned but would not elaborate.

At the same time, there was a collapse in negotiations Thursday between St. John’s attorneys and city auditors over the release of financial records in a separate probe of an Africa trade task force headed by St. John. She now will face criminal charges next Friday in that case for failing to produce subpoenaed records.

‘Hiding Documents’

“Juanita St. John is hiding documents that would explain how she spent approximately $180,000 of city taxpayers’ money,” Tuttle said. “She won’t answer questions that need to be answered. She’s continuing her pattern of non-cooperation.”

Auditors have said St. John, who has a long history of personal financial troubles, withdrew the $180,000 in cash and checks made out to herself. They also allege that she commingled task force and personal funds in family checking accounts in violation of her city contract.

But St. John’s attorney, Richard Hirsch, charged that Tuttle’s office was “playing politics” and had made “totally unacceptable” demands for personal records that “severely violate” St. John’s rights.

Hirsch said he was told that Tuttle would release a long-awaited audit of the Task Force for Africa/Los Angeles Relations as early as today, but that could not be confirmed.

The task force, which Bradley helped create and keep alive by pushing for $400,000 in city funds since 1985, is under investigation by city and state agencies. The city attorney’s office is investigating Bradley’s relationship with the task force because St. John is one of the mayor’s partners in a Riverside land investment and Bradley’s daughter went to work for the group when it received city funds.

The new audit of the sister cities program, which is intended to foster cultural and business ties between Los Angeles and 14 cities around the globe, will begin after the task force audit is released, Tuttle said.

City officials said most of the activities of the sister cities program are privately funded, and St. John served as Bradley’s unpaid executive chairman of the program.

Debt Paid Off

But the city, in a controversial and convoluted bailout initiated last year by Bradley, paid off a $35,550 debt that St. John and her group ran up in hosting an international sister cities conference at Universal City. Serious questions about the legality of the bailout were raised by city officials. There is no record that the city ever received a detailed accounting of how the funds were spent.

The $35,550 in expenditures, which had not been approved in advance by the city, were incurred by St. John’s group when it staged a departing party for the 1,500 delegates on the back lot of Universal Studios.

When funds for the event ran short, St. John personally guaranteed a loan from the Bank of America to cover the costs, according to Julian Montoya, one of the planners of the event.

But the loan went unpaid, and the bank complained to Bradley, according to the mayor’s chief administrative assistant, Anton Calleia. Bradley sought the bailout because “I think (he) felt it was a legitimate obligation,” Calleia said.

But the city attorney’s office said it would be illegal to appropriate funds for unauthorized debts after they had been incurred, Calleia said.

Cultural Programs

In the end, the funds were officially appropriated to the city’s Mexico Sister City Committee for various educational and cultural programs but were actually funneled immediately to the bank to pay off the conference debt. Montoya, the head of the Mexico City committee who applied for the funds, acknowledged that the money went to pay off the debt and was not used for the purposes outlined in his application.

“We didn’t get the money. We just transferred the money,” he said, adding that he merely followed St. John’s instructions in the matter. “I only know they needed my cooperation so we could get these papers through so we could get the money.”

Montoya said the bank loan was only for the conference costs and did not involve personal expenses by St. John.

The City Council appeared to understand that the appropriation would pay off the conference debt. Councilman Ernani Bernardi, the only council member to oppose the bailout, told his colleagues at the time that it was a “classic example of money laundering.”

Bradley Allies

The two Bradley allies on the council who presented the motion for the bailout--Robert Farrell and Richard Alatorre--said Thursday that they did not recall who drafted it.

Bradley’s press secretary, Bill Chandler, said the council debate shows the true purpose of appropriation was clear to council members when they approved it.

St. John and her attorneys declined to comment on the new audit or the $35,550 bailout.