Papers Shed Light on Investigation of Elder Aide in ’88

State prosecutors in 1988 questioned whether Assemblyman Dave Elder had allowed an aide to raise campaign contributions for Controller Gray Davis during state working hours, according to documents recently made public by the attorney general’s office.

Investigators focused on the activities of Susan Grivas as part of an investigation into allegations that Davis illegally used public employees and state facilities in his successful 1986 election campaign. Grivas was an assistant to Elder, a San Pedro Democrat, for four months.

The deliberate use of state staff, offices and equipment for campaign purposes is illegal. Atty. Gen. John K. Van de Kamp decided in 1988 not to prosecute Davis, citing insufficient evidence, and accepted a civil settlement requiring the Davis campaign to reimburse the state $28,000.

Elder and Grivas have denied wrongdoing.

Prosecutors determined that there is insufficient evidence to pursue criminal charges against Grivas.

John Gordnier, senior assistant attorney general, said his office did not conduct a separate inquiry into Elder’s activities because an informant’s assertions could not be corroborated.

“Assemblyman Elder was questioned twice under oath and denied any wrongdoing,” Gordnier said in a statement released Tuesday. “The primary informant refused to cooperate with us in any way, and as a result we had no evidence to refute Elder’s testimony, nor did we have investigative leads which might have led to other evidence.”

Elder said Tuesday that for the last two years he has sought an explanation from the attorney general’s office so that if necessary he could collect money from Davis that the state may be owed for time Grivas spent on campaign matters.

He said he has also asked the Assembly Rules Committee to make a formal request for the information “so the taxpayers get their money’s worth.”

The Times has previously reported that Grivas confirmed that she performed some campaign duties while still on Davis’ legislative staff but that she said she always made up the time later in the day. She worked for Davis before and after she worked for Elder.

First elected in 1978, Elder is seeking his seventh term representing the 57th Assembly District, which includes western portions of Long Beach, San Pedro and Wilmington.

In the Tuesday interview, Elder pointed out that Davis, not Elder, was the investigation target. He also complained that Davis, with whom he served in the Assembly, and Grivas had “misrepresented what she was doing.”

In particular, Elder cited an Eastern trip Grivas took with Davis in December, 1986, shortly after she joined Elder’s staff.

Elder said he was unaware of the trip to meet with investment bankers and maintained that it had not been authorized. Investigators reported that Grivas was present during Davis fund-raising discussions.

On Wednesday, Joseph Remcho, who was an attorney for Grivas and Davis’ campaign committee, said that there is nothing new in the investigative files and that the matter has been resolved to the satisfaction of the attorney general’s office. “They were clearly not troubled by the New York trip, because it was not even included in their settlement calculations,” Remcho said.

Efforts to reach Grivas were unsuccessful.

A review of dozens of investigative reports and interviews shows that state authorities raised questions about whether Elder hired Grivas merely as a favor to Davis, as one of Elder’s former secretary maintained.

And agents explored how well the lawmaker’s staff monitored Grivas’ activities, especially since her office was in the controller’s office, blocks from the Capitol, even while she worked for Elder.

Elder said in the interview that he did not have room for Grivas in his Capitol quarters, so he allowed her to work at the controller’s office.

Grivas began working with Elder in December, 1986, for $2,200 a month. Elder told investigators that he had known Grivas had worked for Davis in the Assembly and that he probably discussed her employment with the controller and Noel Gould, who had been Davis’ campaign coordinator.

Elder said in the interview that Grivas, who left his office in March, 1987, was hired temporarily to monitor activities of the state’s public employee and teacher retirement systems for a committee he headed. Elder said he anticipated working closely with Davis to ensure that the pension funds increased the amount of money invested in California, especially in real estate.

However, a former Elder secretary, Janice Katz, said in a sworn statement that it was her impression that Elder hired Grivas as a favor to Davis and that even though Grivas was on the assemblyman’s payroll, she worked for the controller.

John Popovich, director of public affairs for First Interstate Bank, told investigators that in November, 1986, Grivas attended a Los Angeles meeting at which Davis discussed his policies on direct deposits and mentioned that he was left with a campaign deficit and was looking for someone to hold a fund-raiser in Los Angeles.

The bank agreed to hold the event, and another bank employee told investigators that during the first week of December, she was in touch with Grivas about who would attend the event. Grivas was hired by Elder on Dec. 5.

In an Aug. 26, 1988, memo, Deputy Atty. Gen. Vincent W. Reagor asserted that the state could prove that Grivas “did work for Davis in his Beverly Hills office after she was hired by Elder. We can also prove she accompanied Davis to New York City and Washington during the workweek while employed by Elder.”

Grivas told investigators that she thought she was doing her assigned job. She maintained that any campaign work was done on her own time, not at the taxpayers’ expense.

Davis told the attorney general’s investigators that he thought Elder had loaned Grivas to him to help his transition into office, as other state employees had been assigned to do.

One source familiar with the case who asked not to be identified said that because of the conflicting versions of events, prosecutors could not prove that Grivas had failed to work the required 40 hours a week for the state.

The source also said the probe showed that Elder “may have been a lousy manager,” but he “can’t be prosecuted for that.”

Another hurdle faced by agents during the investigation was that some key details about the lawmaker were provided by a confidential informant, whose comments were relayed by a go-between employed by the attorney general’s office.

In one conversation reported in a weekly case summary by Special Agent Phil Yee, Elder allegedly acknowledged to the unnamed informant “that Susan was supposed to be working for him but in reality was working for Davis.”

In the same memo, the informant quotes Elder as saying “words to the effect that he had just put one over on the investigators about having Susan on the payroll. Elder told the informant, ‘I dodged one more bullet.’ ”

In another report, Yee said, the informant quoted Elder as saying, “Gray really owes me one for this.”