Official Warned About Brookins Loan in ’84 : City Hall: Two city employees alerted an administrator that the bishop allegedly misused federal poverty funds, but criminal investigators were not told until the statute of limitations had run out.

Two Los Angeles city employees warned a high-ranking administrator in 1984 that Bishop H.H. Brookins allegedly misused $26,865 in federal poverty funds, but no one notified criminal investigators until after the statute of limitations for embezzlement had elapsed, according to interviews and newly obtained documents.

One staff member in the city’s Community Development Department, Raul M. Gonzalez, wrote his division chief in July, 1984, that Brookins had committed “a suspected fraudulent act” that had not been “reported to the proper authorities,” according to the memo, which was released to The Times on Thursday.

The division chief, Susan Cleere Flores, said she had no recollection of the memorandum and was not aware of the allegation against Brookins.

City officials filed a complaint with the district attorney’s office in 1987. Prosecutors decided last July to drop the case because the statute of limitations for fraud and embezzlement had run out.

Allen Field, head of the district attorney’s major fraud division, said Thursday that the statute of limitations problem might have been avoided if city officials had referred the Gonzalez memo to prosecutors back in 1984. Field said the memo “suggests that (city officials) were aware there was a crime involved.”

Brookins’ lawyer said this week that the bishop had done nothing illegal when he took the money and used it for mortgage payments on the Crenshaw Boulevard office complex. He said Brookins later replaced the money.

Between 1982 and 1985, the city granted Brookins $336,000 in government loans to renovate the complex that housed various poverty programs.

Government records show that Mayor Tom Bradley and the City Council approved the loans despite being warned by city officials that the subsidy violated city funding policies.

“The mayor’s office wouldn’t (support) the department,” said Douglas S. Ford, the former CDD general manager who notified the mayor’s office in a 1981 letter that his department opposed the loan.

The Gonzalez memo and the Ford letter were among documents uncovered as city employees reviewed the Brookins matter during the last week. The documents shed new light on how Brookins became the subject of a criminal investigation.

In the latest of several inquiries into the Brookins matter, City Controller Rick Tuttle’s staff Tuesday began poring over records and interviewing CDD officials. “We are doing an independent review of the issues raised in the recent news stories,” said Barbara Friedman, Tuttle’s administrative deputy. The Times reported Feb. 3 that Brookins, a respected leader of the African Methodist Episcopal Church and longtime political mentor of Bradley, obtained the renovation loan for what Brookins stated in property documents was a California church corporation. However, state records show that the company has never been incorporated in California.

The loan came from federal funds intended to assist neighborhood projects, including poverty programs. The building housed a program, headed by Brookins, that offered job training and education for poor residents of South Los Angeles. But after a few years, the program moved from the renovated building into a dilapidated office next door. Brookins then leased the renovated office for $10,000 a month to a private trade school.

After missing the first 15 monthly payments on the city loan, the bishop repaid the principal owed and the city forgave $46,824 in back interest, according to city records. Two city administrators told The Times that they were pressured by Bradley aide William Elkins to give Brookins favorable treatment in negotiating the loan settlement. Elkins has denied intervening on the bishop’s behalf.

Today, the bishop personally owns the office complex, which loan records indicate is worth about $1 million.

Brookins’ attorney J. Stanley Sanders said in an interview this week that Brookins did nothing illegal when he used some city funds for mortgage payments, instead of renovations on the property.

“At best, what you have is a violation of the loan agreement,” Sanders said. “That is a little different than embezzlement. There is no intent to defraud, to convert the funds to personal use.”

Brookins was the Los Angeles region bishop for the 2.2-million-member AME Church from 1976 to 1984. He now serves as bishop for the Maryland, Virginia and District of Columbia region.

In 1981, Brookins successfully lobbied City Council members to award a grant to refurbish the three-story building.

Roy Reveilles, a city official who negotiated the contract with Brookins, said Thursday that the grant was converted to a loan when Brookins refused to list the city as a joint-owner of the property to protect the city’s investment in the building.

The loan agreement then was sent for review to the CDD’s community analysis and planning division, which found that the subsidy violated city policy. Analyst Ted Berkowitz concluded that the federal poverty funds were not intended for new projects such as Brookins’ and that the property was not located in a designated low-income area as required by city regulations.

According to a March, 1981, memo obtained this week, then-CDD general manager Ford recommended to Deputy Mayor Grace Davis that the mayor’s office reject the Brookins proposal.

Davis said in an interview that she could not recall the Brookins case, but that she is certain she would have brought such a matter to Bradley’s attention. “I don’t remember if I would have run it by the mayor at that time or later,” Davis said. “I’m sure I would have.”

Bradley spokesman Bill Chandler said the mayor does not recall receiving the 1981 memo. “Grace Davis is no longer with the office,” Chandler said. “You shouldn’t give much credibility to her speculation about what may have happened nine years ago.”

Chandler said the mayor’s office referred the memo to the City Council without comment. Bradley then approved the Brookins project in 1982 after it had been unanimously passed by council members.

The mayor and the council typically ignored CDD recommendations to reject favored contracts, Ford said.

“When it was really something political, which the Brookins thing was, the memo being ignored doesn’t really surprise me,” Ford said in an interview. “. . . I was never able to get the mayor to intercede on behalf of the department.”

Ford said he did not learn of the embezzlement allegation until mid-1986 when city investigators found that Brookins had used $26,865 in government funds to pay off “personal obligations,” according to district attorney’s investigative reports.

Banking records obtained this week show that Brookins withdrew the government renovation funds in November, 1983, to make 10 monthly payments he owed on the Crenshaw property.

CDD analyst Bob Frechman and his supervisor, Arnold C. Garcia, said they reported the alleged misuse of funds to assistant chief grants administrator Roy Reveilles in May, 1984, immediately after learning of the withdrawal.

“I was plenty upset,” Frechman recalled this week. “All of us were at our level because we had never encountered anything like this previously.”

Reveilles said he suggested that Brookins be allowed to return the money. In a May, 1984, memo, Frechman wrote that he advised Brookins not to reimburse the city through his personal checking account because “it would look unusual in the eyes of an audit.”

Bank statements show that Brookins repaid the funds May 31, 1984, through a check drawn on an AME Church account.

Reveilles said he notified Flores, chief of the CDD Human Services Neighborhood Development Division, that Brookins had taken the government funds and that he had directed the staff to let the bishop reimburse the city.

On July 16, 1984, staffer Raul Gonzalez warned Flores in a memo that CDD employees had failed to notify investigators.

The memo, obtained by The Times on Thursday, said, “In May of this year, a staff member unearthed a suspected fraudulent act committed by an influential personage. . . . (The) solution was to simply have the individual reimburse the operating agency for the misappropriated funds. I have yet to receive direction with respect to actions we should take. I am not even aware if this matter had been brought to your attention. In any case, it would seem appropriate that the matter be reported to the proper authorities. . . . I think it has too many important ramifications for us to ignore.”

Flores said she could not recall receiving a briefing from Reveilles or the memo from Gonzalez, although she acknowledged that both may have occurred. The reference to possible fraud in the Gonzalez letter, Flores said, was “buried in a memo on a personnel matter.”

Because the memo was one in a series involving an ongoing dispute between employees, Flores said she may not have read it.

If city employees felt that such a serious matter had been brought to her attention and mishandled, Flores said, there are “serious questions” about why they did not pursue it further.