Jury Subpoenas Bradley Records at Brokerage Firm
A federal grand jury has subpoenaed Mayor Tom Bradley’s personal financial records from a West Coast brokerage firm where a Bradley fund raiser and former Harbor Commission appointee served as the mayor’s stockbroker.
A spokesman for Bateman Eichler, Hill Richards Inc. confirmed Friday that documents were demanded this week by the U.S. attorney’s office, which has intensified its months-long investigation of Bradley’s personal business dealings and conduct in office.
The records involved securities traded for Bradley by Ira Distenfield, who abruptly resigned his Harbor Commission post last May amid inquiries by The Times into his links to the mayor.
“We received a subpoena a couple of days ago,” said Bateman Eichler spokesman Gene Meeker. “They are asking for information about Bradley’s account. That’s all I can tell you.”
Meeker declined to specify the nature of the documents that federal authorities have demanded or provide any details of Bradley’s financial transactions. But he did confirm for the first time that Distenfield was the mayor’s broker and “probably” brought Bradley’s business to Bateman.
Distenfield was one of several brokers at various firms used by Bradley for his financial transactions.
Between 1985 and 1988, Distenfield served as manager of Bateman Eichler’s Century City office, one of the brokerage house’s most lucrative branches. Several former executives of the firm have told The Times that he was hired, in part, because of his political ties to Bradley and the prospect that his mayoral influence could bring the firm city business.
The Bateman spokesman said he did not know why Distenfield was hired or whether political connections played a part.
The subpoena of financial records from Bateman Eichler is part of a broad U.S. Justice Department inquiry of Bradley that has been expanded in recent weeks after officials in Washington determined that the case warranted serious investigation.
“It’s the old saying, ‘Where there’s smoke, there’s fire,’ and there is heavy smoke here,” a federal officials close to the Bradley probe told The Times.
Bradley, through his press secretary, declined to comment on his relationship with Distenfield. But the mayor, in a statement released Friday, reiterated his confidence that “there has been no impropriety on my part.”
He confirmed receiving a grand jury document subpoena on Sept. 11 but discounted its significance, saying it is a “routine procedure” used by the U.S. Justice Department.
“The issuance of a grand jury subpoena does not mean that charges will, thereafter, be brought against anyone,” Bradley said.
He also protested “extraordinarily improper” comments from unnamed federal sources regarding the seriousness of the probe.
Ties to Banks
Besides Distenfield’s connection to the mayor, FBI agents and the U.S. attorney’s office are investigating an array of the mayor’s business ties to banks and investment firms to determine whether he engaged in conflicts of interest or bought securities with the benefit of insider information.
Among the eight financial institutions whose relations with Bradley are under scrutiny by federal authorities are Far East National Bank, which paid Bradley $18,000 in consultant fees at a time when it was seeking and receiving city business, and Columbia Savings & Loan Assn, whose founder and vice chairman is Abraham Spiegel, a personal friend of Bradley who has sought favors from the mayor’s office on development projects.
The deepening federal probe comes at a time when the mayor is struggling to put behind him a scandal that has tarnished an image of high integrity that he cultivated over 16 years.
On Sept. 13, the mayor made a dramatic, 40-minute presentation on live television to declare that City Atty. James K. Hahn had exonerated him of any conflicts of interest and that the controversy was finished, even though his office said Friday that the mayor had received his grand jury subpoena three days before his televised statement.
Hahn concluded that Bradley had shown an “indifference” to ethical concerns and “clearly stepped into the gray area” between innocence and a chargeable crime.
The city attorney also said that his report should not be interpreted as a vindication of the mayor, a statement that was included because Hahn knew of the accelerating federal probe and grand jury subpoenas, his spokesman said Friday.
The Justice Department’s subpoenas revealed for the first time that Distenfield’s relationship with the mayor was of interest to federal agents.
Distenfield is one of Bradley’s biggest contributors. Campaign records show that since 1985, Distenfield has given more than $86,000 to Bradley’s various election efforts and has financed major fund-raisers.
Distenfield resigned his powerful post as Harbor Commission president in May on the same day that The Times sought his comment on sworn statements that Distenfield made in 1987 before a confidential New York Stock Exchange arbitration hearing. In his testimony, Distenfield said he used his influence with Bradley to obtain a hotly contested contract for the brokerage firm of Smith Barney, Harris Upham & Co., which employed him as an executive.
In a separate subpoena this month to the city treasurer, which was revealed Thursday, the grand jury demanded documents that involved three firms that employed Distenfield: Bateman, Smith Barney and ITD Inc.
Bradley has denied that he was influenced by Distenfield.
Smith Barney officials could not be reached for comment on whether the grand jury had subpoenaed records from their firm.
On Wednesday, Distenfield could not be reached for comment. But in an earlier interview with The Times, the ex-commissioner said he has provided the mayor with financial advice, encouraging him to join the boards of directors of companies.
“I have whispered in the mayor’s ear over the past couple years that I would certainly encourage him attempting to make some time available to lend what I think is his image and his love for business,” Distenfield said in June, 1987.
Disclosure of the grand jury’s demand for records came amid a highly unusual, four-day absence from the public eye by Bradley. Since a tour of South-Central Los Angeles on Monday, Bradley has made no public appearances and none were scheduled until Monday.
The last such lull in his appearance schedule was in August when Bradley was preparing for two days of interviews with police and city attorney’s investigators.
Bradley press secretary William Chandler said Friday that Bradley’s low-profile was “absolutely and unequivocally” not related to the expanding federal investigation. He declined to say what the mayor has been working on, other than he needed “office time so he could get through city-related paper work.” Chandler said he knew of no meetings this week between the mayor and his team of defense lawyers.
In another development in the Bradley controversy, lawyers for Juanita St. John filed a new motion in Superior Court seeking to head off a trial of the embattled head of a controversial, city-financed Africa trade task force. St. John, a Bradley business associate who is under investigation for possible misuse of public funds, is charged with failing to produce subpoenaed records showing how she spent $180,000 in unaccounted for task force funds. A pretrial hearing is scheduled Oct. 24.
St. John, who is under criminal investigation by the district attorney’s office major fraud unit and the Los Angeles Police Department, has lost two attempts to get the subpoena charge thrown out on the grounds that the demand for documents made by the city controller was unconstitutional. The motion filed Friday seeks to overturn a Municipal Court ruling last month against St. John.
Times staff writers Henry Weinstein, Tracy Wood and Glenn F. Bunting contributed to this article.