Panel Votes to Fire Treasurer Rittenberg

A city panel has voted to fire Treasurer Leonard Rittenberg for his handling of controversial city deposits in a bank that had employed Mayor Tom Bradley, sources said Tuesday.

The Board of Referred Powers, composed of five City Council members, has been conducting private hearings on Rittenberg’s performance since last December. The mayor normally would handle such personnel matters, but Bradley asked to be removed because of a potential conflict of interest.

The panel concluded that Rittenberg misled city investigators, lied to the council, created false records and damaged the credibility of the treasurer’s office, a source said.

Rittenberg did not return phone calls on Tuesday.

The Board of Referred Powers’ vote is the key action in the disciplinary process. Rittenberg can accept the decision, or he can request an automatic hearing under Civil Service rules. It was not known whether he has requested a hearing.

However, one source familiar with the inquiry said Rittenberg is considering resigning rather than face firing.

Handpicked by the mayor, Rittenberg has served as treasurer for more than 2 1/2 years and makes $83,416. A veteran of two decades with the city, he oversees 54 employees who control the investment of nearly $2 billion in taxpayer money.

The mayor’s office had no comment on the board’s action.

Bradley requested a Personnel Department investigation of Rittenberg last July after a series of disclosures about possible irregularities concerning city deposits placed in Far East National Bank, for which Bradley was a paid consultant in 1988.

After a phone call from Bradley, Rittenberg decided on March 22, 1989, to invest $2 million in Far East without competitive bidding. That decision thrust him into the middle of a controversy over Bradley’s relationship with the bank.

Rittenberg and Bradley both say that the mayor did not attempt to influence the decision. Bradley returned his $18,000 fee from the bank in early 1989.

The board’s action against Rittenberg has not been announced because it is a personnel matter.

The Times has learned that Board of Referred Powers upheld eight offenses by Rittenberg, generally involving the Far East deposits. The decision to recommend firing was unanimous, sources said.

Sources said the allegations include:

* Violation of the office’s competitive bidding process in the handling of the Far East deposits.

* Authorizing an employee to solicit bids after the funds were deposited in Far East.

* Preparation of a misleading record, namely a falsified bid sheet regarding the deposits.

* Failure to cooperate with city attorney’s investigators looking into the deposits and turn over records to investigators in a timely fashion.

* Making misleading, contradictory and false statements to investigators regarding events of March 22, 1989.

* Misleading the council’s Government Operations Committee last May by falsely claiming there had been competitive bidding.

* Falsely certifying to the full City Council that two $1-million deposits in Far East were made through competitive bidding.

* Engaging in conduct which has “damaged the credibility and reputation of the office of city treasurer.”

Jack Driscoll, general manager of the city’s Personnel Department, said that if a department head, such as Rittenberg, is fired either by the mayor or the Board of Referred Powers, he is entitled under Civil Service rules to an appeal hearing. The final decision must be ratified by the City Council.

The council’s action then could be appealed to the Civil Service Commission, Driscoll said.

The City Council’s Finance Committee has held a number of public hearings on the treasurer’s investment policies, which had been, in large part, unwritten.

Rittenberg became the subject of a Los Angeles Police Department investigation after a disclosure that someone in the treasurer’s office used white correction fluid to blot out the phrase “per the mayor” on a bid sheet that reported the deposits in Far East. The investigation is continuing.

The Board of Referred Powers generally acts in place of various commissions when members have a conflict of interest on a specific matter. The Rittenberg case is the first personnel matter ever heard by the board. Council members Richard Alatorre, Hal Bernson, Joan Milke Flores, Ruth Galanter and Zev Yaroslavsky sit on the board.

The city’s Personnel Department completed a two-volume report on Rittenberg’s performance last December and forwarded it to the mayor’s office, but it was sent on to the Board of Referred Powers because of Bradley’s conflict of interest.

The report has not been made public, but board members said in January that it contained a range of disciplinary options, including firing.

Under normal circumstances, Bradley, as the city’s chief administrator, would handle such personnel matters. However, Bradley requested that he be removed from the case because of his involvement in Rittenberg’s problems.