THE MAYOR UNDER FIRE : Legal Issues : In Opting for Civil Action, Hahn Chooses to Follow Well-Worn Prosecutorial Path

In deciding to take civil, rather than criminal, action against the mayor for failing to accurately disclose his personal investments, City Atty. James K. Hahn on Wednesday took a relatively well-worn prosecutorial path.

Violations of the California law requiring officials to disclose their economic interests in publicly available documents are almost never the source of criminal action.

In Mayor Tom Bradley’s case, the civil action could lead to fines in excess of $200,000.

Hahn also took a conservative route in deciding not to pursue criminal or civil conflict-of-interest charges against Bradley in the case of Far East Bank, which employed the mayor as its $18,000-a-year special adviser while serving as a repository of city funds.

Hahn said the chief obstacle to a prosecution in the Far East case was that the key witnesses--namely Bradley and City Treasurer Leonard Rittenberg--denied that the mayor brought any pressure to bear on Rittenberg or other city officials on behalf of the bank.

Hahn said “it is apparent” that a telephone call from Bradley “did influence” the treasurer to deposit $2 million with the bank. But he said he could not prove that the mayor “intended that influence”--an element that is required to prove a conflict-of-interest law violation.

The conflict-of-interest law states: “No public official . . . shall in any way attempt to use his official position to influence a governmental decision in which he knows or has reason to know he has a financial interest.”

Violation of the law--part of the same 1974 Political Reform Act that requires officials to disclose their economic interests--places officials at risk of either criminal or civil liability.

Hahn said Bradley clearly had a financial interest within the meaning of the law. But he said the mayor and the treasurer both related in extensive interviews that the mayor had only asked about the treasurer’s relationship with the bank and had not tried to influence the treasurer to place deposits there.

Making a criminal case without direct evidence of the mayor’s intent to influence the treasurer would have been a tough sell to a jury, and one that no prosecutor would relish.

“That is not to say that there is ‘no evidence’ of wrongdoing,” Hahn said in the report, “but it is only to say that, given applicable standards of proof, insufficient evidence exists to prove a violation of law.”

Making a civil case would have been easier because the civil standard of “clear and convincing” proof is less rigorous than the criminal standard of proof beyond a reasonable doubt.

However, Hahn said he concluded that there was insufficient evidence even for a civil suit in the Far East case.

Said an aide, Deputy City Atty. Edmund Fimbres: “It would have been unethical to file charges unless there was a reasonable possibility of conviction. . . . There was no reasonable possibility--criminally or civilly.”

Fimbres, a member of the city attorney’s Bradley investigative team, said this view was held by each of the five lawyers in the group.

Although Hahn’s decision not to file criminal charges against the mayor was earlier reported by The Times and surprised no one, some prosecutors who were not involved in the case said they were taken aback by his decision not to file a civil conflict-of-interest lawsuit in the Far East case.

“In civil cases, you just cock your head and say, ‘something’s not right here,’ ” said one experienced prosecutor, referring to the easier standard of proof in such cases. “It seems to me that the evidence (of a conflict-of-interest law violation) is sufficient--just looking at what I’ve read in the newspaper. I just don’t understand them overlooking what seems so obvious on its face.”

This prosecutor spoke on condition that he not be identified.

Others said they regarded Hahn’s decision as one that might have gone either way.

“I think it’s a close question,” said Robert M. Stern, former general counsel of the state Fair Political Practices Commission.

Still others were reluctant to comment at all. “It’s hard for somebody who is not either there or very well informed . . . to be confident in second-guessing the city attorney,” said UCLA law professor Daniel Lowenstein, principal author of the Political Reform Act.

Lowenstein, Stern and other prosecutors all noted that such cases often turn on nuances.

What is clearest is that a prosecutor has wide discretion in deciding whether to pursue such litigation.

Hahn referred to this when he said, “The mayor clearly stepped into that gray area of the law between factual innocence and a chargeable offense.”

In deciding to pursue a civil suit, rather than a misdemeanor criminal charge against the mayor for failure to disclose all of his investments, standards of proof also came into play.

Fimbres said the office decided that it could not prove that the mayor intended to deceive anyone--a necessary component of the criminal charge.

By proceeding civilly, the city attorney needs to prove only that the mayor omitted six of his substantial investments in stocks and bonds through negligence.

This is expected to be relatively easy to show since it was the mayor’s personal practice to prepare his own disclosure statements.

The mayor amended his statements last August to include the six investments.

Although the amendments came under pressure--they were made in the midst of inquiries from the state Fair Political Practices Commission--prosecutors said they were inclined to view them nonetheless as factors indicating that Bradley lacked criminal intent.

Omissions from economic disclosure statements are routinely referred to the Fair Political Practices Commission, which typically holds administrative proceedings in pursuit of $2,000-per-violation fines, and sometimes files civil suits.

It is unusual, although far from unprecedented, for a city attorney to file a civil suit for non-disclosure, and in doing do, Hahn trod a middle ground.

Rather than cite the section of the law that carries $2,000 fines, Hahn relied on a section that requires the official to pay fines matching the amount of the investments he failed to report.

In Bradley’s case, the Hahn aide said, he did not know what the mayor’s total exposure might be, because Bradley’s investments are disclosed only in dollar ranges, such as $10,000 to $100,000. However, the aide said the mayor could be liable for fines of more than $200,000 for the six omissions cited in the suit.

A Times review of Bradley’s amended statements of economic interest showed more than 100 errors in reporting items that could be worth $2.2 million.

Hahn said that he was referring his report to other agencies--including the district attorney’s office and the state attorney general’s office--that could also file charges in the case.

However, charges by other agencies appear unlikely.

“We’re going to have somebody read the report, but I don’t expect anything to happen,” said a prosecutor in the district attorney’s office, who asked not to be named.

The district attorney’s office has responsibility for filing felony charges. The city attorney’s office handles misdemeanors.