Council Holds Off on Its Own Probe of Mayor’s Affairs

One day after Mayor Tom Bradley launched an extraordinary televised defense of his personal financial dealings, City Council members indicated Thursday that they are reluctant to mount a full-scale investigation of their own into Bradley’s conduct.

An ad hoc council ethics committee, in the first official opportunity to act on City Atty. James K. Hahn’s voluminous and critical review of Bradley’s personal finances, rejected a proposal to hire legal advisers to review the report.

But in a signal that the long political drama is far from over, the Los Angeles Police Department on Thursday served search warrants on several financial institutions as it pressed ahead with its investigation of Bradley business partner Juanita St. John.

Trade Group Probe

The Police Department and the district attorney’s major fraud unit are trying to determine if St. John, the head of an Africa trade group, misused some of the $400,000 in city funding the group received since 1985 with the mayor’s help. Nearly $180,000 in withdrawals by St. John have not been accounted for, city auditors said.

On Wednesday, Hahn concluded a nearly six-month investigation by filing suit against the mayor for failing to disclose major stock holdings, but he said he found insufficient evidence to bring criminal charges.

However, Hahn said he intended “no vindication” of the mayor, who Hahn said had shown “indifference” to ethical concerns.

On the larger question of Bradley and his political future, elected officials and the surrounding political community issued few ringing endorsements Thursday of the 40-minute address given by Bradley Wednesday night in response to the Hahn report. In it, Bradley ignored Hahn’s strong criticism and declared that he had been exonerated.

The mayor was secluded in private meetings Thursday and made no public appearances except for a luncheon arrival at the annual meeting of the Los Angeles Convention and Visitors Bureau.

The council’s three-member ethics panel decided, without a vote, against hiring advisers to aid the council in an independent review of the Hahn report. That action contrasted with attempts by some council members earlier this year to have an independent counsel appointed to investigate Bradley.

The committee also balked at forming a special panel of legal and financial experts who may serve on a pro bono, or free, basis despite Councilman Michael Woo’s entreaties to fellow committee members Gloria Molina and Ruth Galanter. Galanter said she thought formation of a panel was “premature” and suggested that the committee get a briefing from Hahn before seeking any outside help. The panel will hold public hearings on the Hahn report sometime next week, Woo said.

Further, Woo and council President John Ferraro have reached an agreement under which sole responsibility for reviewing the Hahn report will stay with the ad hoc ethics committee and will not spread to other members.

“Let’s let this thing cool off after (Wednesday’s) performance,” Ferraro said in an interview.

Councilman Zev Yaroslavsky, chairman of the council’s Budget and Finance Committee, said there was a “reluctance” on the part of the council to spend hundreds of thousands of dollars on consulting attorneys fees on an issue to which the city attorney’s staff devoted more than five months.

“The time to have done that would have been in April and May at the outset of the investigation,” he said. Yaroslavsky characterized Hahn’s decision not to press criminal charges against the mayor as “a judgment call.”

“He wasn’t right; he wasn’t wrong,” said Yaroslavsky, who had widely telegraphed his intention to run against Bradley earlier this year before dropping out months before the mayor’s race. “I’m not going to second-guess Jimmy Hahn’s judgment and I’m certainly not inclined to spend half a million (in consulting fees).”

In serving Thursday’s search warrants, Los Angeles Police Lt. Fred Nixon said detectives are looking for “any records that might shed light on the handling of the finances of the Africa task force” headed by St. John.

Sandi Gibbons, a spokeswoman for Dist. Atty. Ira Reiner, said that the initial warrants sought bank records of the task force and St. John but that additional search warrants could be issued. Gibbons declined to name the banks involved or the specific records sought, but some of the search warrants were served outside of the county. St. John’s San Marino home was not searched.

Nixon declined to characterize the possible crimes being investigated or how long the “important and quite likely complex” criminal investigation of the task force’s affairs would take.

One focus of the investigation, sources have said, is the transfer of more than $5,000 from the task force to accounts of the land partnership involving St. John and Bradley.

St. John’s attorney, Richard Hirsch, criticized the police action, saying it “seems like overkill” because St. John has authorized the task force’s bank to provide records to city auditors.

In addition to the police investigation, at least three local, state and federal agencies opened preliminary reviews Thursday of Hahn’s hefty 1,600-page investigative report. They included the criminal division of the state attorney general’s office, which enforces laws governing nonprofit groups such as the task force; the Los Angeles district attorney’s special investigation unit, which handles political corruption cases, and the U.S. Treasury Department’s comptroller of the currency office, which regulates firms such as Far East National Bank. Payments the bank made to Bradley as an adviser figured centrally in Hahn’s investigation.

Spokesmen for all three agencies said they did not know how long it will be before they determine if further action is warranted.

Meanwhile, a source familiar with the FBI’s investigation of Bradley’s financial dealings with Drexel Burnham Lambert Inc. said “there is no resolution in sight” of the case. Agents from the FBI’s Los Angeles office are conducting the investigation under the direction of the Justice Department’s public integrity section in Washington.

“I do not sense that it’s even at the halfway point,” said another source who declined to be identified. All sources agreed that the case involving Bradley probably will have to wait until a pending criminal case against junk bond specialist Michael Milken is wrapped up.

Across the political landscape on Thursday, reverberations continued to be felt after the landmark Hahn and Bradley events. Bradley particularly came in for criticism.

“I don’t think he put to rest all of the questions that have been dogging him for six months,” Yaroslavsky said in a statement echoed by others. “He did not seem contrite in any way about what he had done. . . . It reflected a continued lack of understanding about why this is such a big deal ethically.”

But few were willing to write off the five-term mayor, who after losing a gubernatorial bid two years ago strengthened his hold on the city and forestalled a Yaroslavsky challenge this year. Most suggested that Bradley could help himself by aggressively pursuing a domestic agenda that could shift public attention from his difficulties.

“If he has something good to offer, he will be effective,” Ferraro said. “If he has nothing good, then he won’t be effective.

“This is a very resilient politician,” Yaroslavsky added. “He’s been down before and come back.”

But others were skeptical whether Bradley’s renewed focus on problems like gang warfare, smog and traffic--issues he said Wednesday night that he would emphasize in the future--would serve to ingratiate him with the public.

“What the mayor really needs is, sadly, for there to be some other crisis in Los Angeles to provide leadership,” political pollster Arnold Steinberg said. Asked whether a Bradley-led assault on gang warfare would qualify as a crisis, Steinberg responded: “An earthquake would be better.”

Steinberg, like others, suggested that a spurt of activity by Bradley could strike the public as politically motivated. He noted that Bradley’s offer to mediate in the recent Los Angeles teachers’ strike was roundly ignored.

“He hasn’t immersed himself in teachers and gangs--it’s a little late but he might well try to do that,” Steinberg said.

But Bradley may also benefit from a reluctance by council members to actively take him on on ethical matters--either because they do not want to alienate his supporters or because they do not want to risk criticism of their own ethics, officials said.

Times staff writers Rich Connell, Frederick M. Muir and Ron Ostrow contributed to this story.