City Treasurer and Aides Draw Sharp Criticism

Los Angeles City Atty. James K. Hahn, in some of the most blistering passages of his report on the Tom Bradley investigation, accused the city treasurer and his top aides Wednesday of repeatedly lying to investigators and concealing crucial documents that linked the mayor to efforts by Far East National Bank to obtain city deposits.

“Much of the evidence of evasiveness, falsehoods, fabrication and efforts to suppress evidence,” the report concluded, “are extremely damaging and appear to taint everyone and everything that is associated with the events of March 22, 1989.”

Funds Deposited

It was on that date that $2 million in taxpayer funds was deposited with Far East after Bradley had a telephone conversation with City Treasurer Leonard Rittenberg about the city’s relationship with Far East.

Hahn’s report, however, said there was no evidence that Bradley played a role in what the city attorney described as “the convoluted and deceptive behavior of some of the treasurer’s office personnel.” He did not speculate on what motivated their actions.

Hahn alleged that Rittenberg himself failed to disclose the existence of two documents that represented important evidence in the city attorney’s probe of whether the mayor had used his official position to assist Far East.

One of them was a January, 1988, letter from Far East President Henry Hwang to Bradley--only weeks after the mayor became a paid adviser to the bank--asking for help in obtaining city deposits. Bearing the notation “RUSH,” the letter was sent to Rittenberg by a Bradley aide. The letter directed that a response be prepared for the mayor.

The Hahn report said that Rittenberg also withheld from city attorney’s officials his own response to the letter, which stated that a treasurer’s office employee would “personally” assist the bank with required paper work to seek city deposits.

A month later, Far East received a $1-million deposit from the city--even though it did not offer the greatest rate of return among other banks competing for the funds.

Silent on Letters

Although Rittenberg was aware of the two letters, he did not reveal their existence when first interviewed by the city attorney’s office in early April, 1989, Hahn’s report said. Rittenberg claimed nonetheless that he was providing investigators with all records pertaining to Far East maintained in his office, according to the report.

“When asked to explain his non-disclosure of and failure to provide copies of Far East National Bank documents, Rittenberg gave no less than five separate and contradictory explanations,” the report said.

One one occasion, it recounted, the treasurer said, “I didn’t think it (one of the letters) was germane.” On another, he said, “You didn’t ask about it.” And he volunteered this: “I’m not trying to hide anything from you. I mean, I’m hoping that you’re on my side. Now maybe that’s an illusion that I have. I don’t think we’re supposed to be opponents here.”

Questioner’s Concerns

While questioning Rittenberg, Deputy City Atty. Kevin T. Ryan expressed concerns he had about the treasurer’s failure to reveal the existence of the response he had prepared for the mayor to the Far East letter:

“One, that it impaired our investigation. Two, it causes me to be suspect and critical of other documents we’re getting from the (treasurer’s) department. And the last part is . . . your explanation of why that letter wasn’t revealed to us doesn’t hold up.”

Rittenberg: “I understand.”

Ryan: “And I assume what happened was that you spoke to somebody and they said, bury that or sit on that for a while.”

Although Rittenberg did not respond directly to Ryan’s scenario, he later explained: “Just let it be said that I’m in a very funny position on this whole thing. I’m damned from the moment this happened and I have to live with that. . . . I’m sorry you’re finding some inconsistencies with me.”

Rittenberg further contradicted himself on the issue of whether he found the letters in his office files before or after he was first interviewed by the city attorney’s office.

In fact, according to Hahn’s report, he found them on the day he ordered that $2 million be deposited in Far East--and after he was questioned by a reporter about the mayor’s relationship to the bank.

Gage Shown Documents

Rittenberg told investigators that he showed the documents to Deputy Mayor Michael Gage, who had requested that Rittenberg provide him with a history of the city’s dealings with Far East.

Gage, in interviews with reporters, has said only that Rittenberg provided him with a chronology of city deposits with Far East. He never mentioned that the treasurer also provided him with the two critical letters.

In all, Rittenberg was interviewed on five separate occasions for a total of more than 10 hours.

Hahn’s report also blasted efforts by the treasurer’s office to cover up circumstances surrounding the Far East deposits on March 22, which included doctoring documents and obscuring with white correction fluid a notation that the money had been deposited “per the mayor.”

Hahn characterized the statements of Rittenberg and two subordinates--William Hoss and George Sehlmeyer--as “evasive, deceptive and/or false.”

Bid Sheet Falsified

It was disclosed recently that a so-called “bid sheet” was falsified to make it appear as though the Far East deposit had been made through a required competitive bidding process, when in fact none had occurred. Other banks were listed on the document after the deposit already had been awarded to Far East.

When Rittenberg was first questioned about the falsified document, he claimed that he had never seen it before and had no idea what had been “whited out.” In later interviews, however, Rittenberg admitted that he not only was familiar with the document, but had directed his subordinate Hoss to list the other banks on it. He also conceded that he knew that the phrase “per the mayor” had been obscured.

Hahn’s assessment of the treasurer’s office was harsh.

“Evidence of the treasurer office’s general operation and some of its claimed policies show an operation, in some respects, in poor working order: co-workers who hate one another operating for years in close proximity while performing interrelated functions . . . the doctoring of the bid sheet by adding ostensible competitive bids after-the-fact . . . the attempt to conceal and suppress evidence by the application of white-out and black ink to the bid sheet . . . and a pattern of false and evasive statements to investigators, done at the direction of and/or acquiescence of the department head, Treasurer Rittenberg.”

Under Probe

At Bradley’s direction, the city Personnel Department is investigating Rittenberg. Hahn disclosed Wednesday that the treasurer’s office also is under investigation by the Los Angeles Police Department.

Hand-picked by the mayor, Rittenberg has been the city’s treasurer for two years, overseeing 54 employees who control the investment of nearly $2 billion in taxpayer money. As of last January, he earned an annual salary of $83,416.

The treasurer serves at the pleasure of the mayor and City Council.

Efforts to contact him Wednesday were unsuccessful.