City Attorney Sues St. John to Recover Missing Task Force Funds

City Atty. James K. Hahn, accusing Juanita St. John of “fraud and deceit,” filed a lawsuit Thursday to recover $388,920 in city funds paid to the African trade task force that she headed.

The suit, filed in Superior Court, alleges that St. John and unnamed task force members breached four contracts with the city dating back to 1985 by using city funds for improper purposes, failing to maintain accurate books and records, and failing to account to the city for any of the expenditures.

St. John and the others never intended to honor the terms of the contracts, the suit alleges, but instead “had a secret intent to use the funds for their own purposes or in violation of the contracts.”

St. John, a friend and business associate of Mayor Tom Bradley, is the subject of a number of investigations and legal proceedings for her handling of the city funds, which the mayor helped secure for the task force. Bradley, who helped create the task force and was a member of its advisory board, was not named in the lawsuit.

The lawsuit was aimed specifically at St. John because she signed the contracts and was the principal officer and agent of the task force throughout its relationship with the city, said Deputy City Atty. Lauren Arky.

If attorneys for the city determine during the course of the lawsuit that others involved with the task force have legal liability for the money, their names will be added as defendants, Arky said.

Contacted for comment, Richard Hirsch, one of St. John’s lawyers, said Thursday he had not been given a copy of the lawsuit. He said he had advised St. John not to make any statements about the task force while a criminal investigation is pending.

Under its contracts with the city, the task force was to promote trade between selected African countries and small to medium-size firms throughout the United States and provide assistance and information about the developing foreign markets. A total of $388,920 was appropriated for the task force, a nonprofit organization, from 1985 to 1989.

In return, the group was supposed to keep the funds in a separate account, submit to the city clerk’s office a final statement of costs and expenses at the end of each contract term, and return any unspent money to the city. The task force also agreed to submit on demand documentation for its expenditures, according to the suit.

The task force breached the contracts by failing to abide by any of the accounting and bookkeeping provisions, the suit alleges.

“The true facts were the defendants have never turned in the reports, have never created a separate account for the funds and have never given the city an accounting of the monies,” the suit alleges.

Earlier this year, an audit by City Controller Rick Tuttle showed that St. John had written $178,812 worth of task force checks to herself or to “cash” and that she commingled task force funds with her personal bank accounts and those of her family members. In all, the task force owes the city $260,000, according to the audit.

St. John has a long history of personal financial problems, including two bankruptcies.

On Thursday Hahn sued for the full $388,920 paid to the task force since 1985, saying that the group had never properly accounted for any of the money. The lawsuit also asks for an order forcing St. John to make a full accounting for the group’s funds and for an unspecified amount of damages.

St. John has told city investigators that she has documentation to show how the funds were spent, but she has consistently failed to surrender it. In an October hearing before a City Council committee, she invoked the Fifth Amendment more than 60 times, refusing to answer any questions about the task force.

St. John has been charged with a criminal misdemeanor for refusing to comply with a subpoena for documents requested by the city controller. She also has been sued by the state attorney general’s office for refusing to disclose how the nonprofit corporation has spent its money.

Los Angeles police and the district attorney’s office are conducting a criminal investigation of the task force’s finances.