Payments to Bradley Ex-Aide Investigated : Finances: Reiner orders probe 2 years after questions were raised about Art Gastelum’s links to a massage parlor owner.

Dist. Atty. Ira Reiner, after a two-year delay, ordered an investigation Tuesday of $125,000 in payments from a onetime massage-parlor owner to a former top aide to Mayor Tom Bradley and to the aide’s wife.

Reiner announced the investigation after The Times made inquiries about the financial relationship between Art Gastelum and Hal Mintz, a former college instructor and real estate investor who pleaded no contest in 1988 to maintaining a West Hollywood house of prostitution.

Prosecutors working under Reiner in June, 1988, had recommended an investigation of the payments to Gastelum, but no action was taken until Tuesday, according to interviews and investigative documents.

After learning of the district attorney’s investigation, Gastelum vehemently denied any wrongdoing, promised to cooperate fully with investigators and declared he would be vindicated.

“I have nothing to hide,” Gastelum said. “I’m going to come out of it, legally, fine.”

He voluntarily met with investigators Tuesday evening, answered questions and presented documentation that he says shows that the payments were from real estate transactions and personal loans. Roger Gunson, head of the Reiner’s special investigations unit, said later that the investigation might be wrapped up in a matter of days.

Last week, Gastelum resigned from his $73,000-a-year post as the mayor’s head of economic development to take a job as an executive with a water-bed manufacturing company.

Reiner said the probe will determine “the source of the money and the nature of the relationship between Gastelum and Mintz.”

Reiner’s staff late Tuesday said they also were looking at possible violation of state conflict-of-interest laws that require city officials to disclose their income and investments. Gastelum initially did not report the payments from Mintz, but included part of the payments in an amended statement of his economic interests in 1988, according to records.

During the 1988 investigation of Mintz, three prosecutors had recommended that the district attorney’s office or the grand jury investigate the payments to the Gastelum and his wife, but no action was taken, according to interviews and documents.

Deputy Dist. Atty. Gil Garcetti said Reiner failed to make a decision on the matter.

“To my recollection, and the apparent recollection of others, he (Reiner) never got back to me or anyone else with any direction on how to handle that particular investigation,” Garcetti said Tuesday. “It is easy and perhaps unfortunate that the district attorney would now like to place total responsibility on my shoulders.”

In a telephone interview from Sacramento, Reiner--who is preparing to announce his candidacy for state attorney general later this week--said the Gastelum matter should have been investigated after the requests were made by prosecutors in 1988.

Reiner blamed Garcetti for “not following through. What happened is somebody sent Gil a memo and he didn’t follow up on it.”

Garcetti, a veteran of more than 20 years with the district attorney’s office, was Reiner’s chief deputy until September, 1988, when Reiner demoted him for reasons unrelated to the Mintzcase. Garcetti now heads the district attorney’s Torrance office.

Gastelum, 40, served 17 years in the mayor’s office in a variety of positions, including liaison to East Los Angeles.

He said that none of the $125,000 he received was in any way connected to the operation of a massage parlor. He said most of the money came from a legitimate real estate transaction in Los Angeles, but he declined to disclose the parties involved or the precise location.

Mintz, 59, said the bulk of the money--a $108,000 check drawn on the account of Hal Mintz & Associates Inc. in 1986--was a consulting fee he split with Gastelum’s wife, Lillian, a real estate broker who helped him put together a $12-million commercial development deal.

The check, drawn on Mintz’s consulting-firm account, was endorsed by both Gastelums.

Mintz, citing confidentiality and fear of lawsuits, refused to discuss details of the real estate transaction.

Art Gastelum said he and Mintz have been friends since Gastelum’s days as a student leader at East Los Angeles College two decades ago. At that time, Mintz was one of his teachers. They remained friends over the years and were partners in one small real estate deal 10 years ago, Gastelum said.

Gastelum’s name surfaced during the Mintz investigation when a search warrant for Mintz properties turned up four checks, totaling $125,500, made out to Gastelum and his wife.

In May, 1988, Mintz pleaded no contest to conspiracy to maintain a house of prostitution and state income-tax evasion in connection with the West Hollywood massage parlor he operated for several years.

Mintz said the Gastelums had no role in or knowledge of his massage parlor until the controversy over it appeared in newspapers in late 1987. Prosecutors said they have no evidence that the Gastelums were involved.

Prosecutors became interested in Gastelum, however, because large sums of money had gone to him from Mintz for unknown reasons and he failed to disclose them on his state-mandated conflict-of-interest statements.

On March 16, 1988, three prosecutors met with Reiner to discuss the Mintz case and what should be done about investigating Gastelum.

Elden S. Fox, the prosecutor in charge of the Mintz case, told The Times this week that the payments to Gastelum were discussed, and that Reiner gave him a copy of Gastelum’s 1986 financial disclosure form, which failed to note the Mintz payments.

Fox said he later recommended an investigation of the payments. “My suspicions were just that being a public servant, there was some possibility of some kind of conflict of interest and (Gastelum’s) public disclosure forms did not mention these sums, which over time were quite subtantial.”

About a week after the meeting with Reiner, Fox drafted a memo dated March 23 to Reiner, outlining the case against Mintz. “An inquiry was made regarding the nature of checks issued to Lillian Gastelum and Art Gastelum by the suspect (Mintz),” the memo said in part. “Because of the large amounts of money involved, this matter might properly be the subject of a criminal investigation.”

A memo from Fox to his supervisor, Deputy Dist. Atty. Denis Petty, on June 7 included copies of the four checks written on Mintz’s business and personal accounts to Lillian and Art Gastelum.

“It is recommended that further inquiry be made into the reason or reasons for these payments,” Fox wrote. “Such an investigation could require the utilization of the Grand Jury if other means fail.”

One day earlier, on June 6, Gastelum filed an amended financial interest statement that included some of the Mintz payments. He said he learned inadvertently that he might not have properly reported his assets.

Reiner, Gastelum and a spokesman for Mayor Bradley said there were no communications between the district attorney’s office and the mayor’s office about Gastelum’s reporting problem.

On June 10, 1988, Petty forwarded the second Fox memo to Garcetti and noted: “The matter needs further investigation. Would you like me to direct this matter to SID (Special Investigations Division) or another unit?”

Garcetti said he showed the latest Fox-Petty memos to Reiner and discussed it with him “more than one time.”

Reiner said he never saw the June memos until other staff members showed them to him on Tuesday. He said Garcetti’s version of events is “just an alibi on (Garcetti’s) part for not taking any action.”

Petty, the third prosecutor, said he could not recall details of the matter. “I’m letting the memos speak for themselves,” he said. “It was a very strange case . . . that’s why it went up through me to Garcetti (and) Reiner.”