Officials Find L.A. Ethics Law Sows Confusion

The nation’s toughest ethics-in-government law has turned into a bureaucratic nightmare.

Two months after a new ethics law went into effect in Los Angeles, city officials say they do not know what is required of them, and the city commission charged with enforcing the law still lacks an executive director and staff.

More than 350 city officials--including all five members of the Ethics Commission--missed a March 4 deadline last week to submit expanded financial reports to the city clerk disclosing their personal assets under the new law.

While some officials submitted forms that detailed the value of their investments, income and property, others omitted similar information about their personal finances.

As of Monday, more than 50 city commissioners had not yet filed. Last week, three commissioners resigned rather than publicly reveal their financial holdings.

Even a top official in the city attorney’s office has refused to comply with the disclosure provisions of the new ethics law.

“I felt it invaded my rights to privacy,” said Assistant City Atty. Linda Lefkowitz, who interprets laws regarding the release of public records. “This is not a Joan of Arc thing . . . but once in a while you have to take a stand.”

About 1,500 city officials and employees are required to submit forms. Late filers are subject to a fine of $25 a day, but Assistant City Clerk Pat Letcher said, “I doubt the fines will be imposed. We’re just happy to have the forms.”

Members of the Ethics Commission did not file their own statements of economic interest with the city clerk until Thursday--three days after the deadline. The part-time secretary to the commission shouldered the blame for the late submissions.

“It is total chaos,” said Geoff Cowan, who was appointed to draft a proposed ethics law by Mayor Tom Bradley in 1989 during the scandal over Bradley’s personal finances. The City Council later modified the proposal and approved it.

Cowan and his wife, Fire Commission President Aileen Adams, conceded in separate interviews that they could not determine what investments she was required to disclose under the law. The confusion, Adams said, was caused in part by conflicting advice provided by the Ethics Commission and the city attorney’s office.

“I decided I don’t want to get caught in the middle of this, so I just decided to reveal everything,” said Adams, who filed a supplemental form reporting $3.9 million in holdings.

Cowan said much of the problem stems from poorly worded revisions made by the council.

“This is not the law that we recommended,” Cowan said. “This ordinance . . . is unclear and can only be made clear by an Ethics Commission with a staff that can resolve disputes.”

He noted that some members of the City Council are now calling for reform.

When the council refused last month to approve a $90,000-a-year salary for the executive director selected by the commission, he quit in protest. The commission does not want to assemble a staff before hiring a new executive director.

“We understand that a lot of people have problems with the law,” said Commission President Dennis Curtis. “There’s a lot of frustration on our part, too, because we can’t get started without a staff.”

The new city law significantly increased the personal financial data that elected officials and certain city employees and commissioners must disclose. For the first time, these officials must report precise values of investments, property holdings and loans outside the city, details of income earned by spouses and dependent children, and the names of stockbrokers, business associates and partners. Even improvements made on personal residences must be described. Reports by the mayor and other elected officials are due next month.

Dozens of city officials who turned in statements last week failed to report such financial interests while others volunteered information that was not required, according to a Times review of nearly 1,000 statements. Sometimes members of the same commissions filed reports that varied widely.

Richard Riordan, for example, disclosed investments, income and property valued at $69.6 million while fellow board member J. Stanley Sanders reported an annual income of more than $250,000 and nothing else. Both Riordan and Sanders are Los Angeles lawyers and members of the city’s Recreation and Parks Commission. Sanders did not respond to inquiries about his statement.

Riordan, who said he paid his accountant $3,500 to complete the forms, criticized the disclosure requirements as too complicated. He predicted that they will discourage successful people from seeking commission appointments.

“It is a bad policy,” Riordan said. “The crook is always going to find some way around the written word. This does not penalize the potential crook; it penalizes the successful, honest person.”

Riordan is one of at least 25 city commissioners who listed assets and income totaling more than $1 million, the reports show. Of those who filed reports, the next wealthiest commissioners appear to be Sanford Paris, a library commissioner who reported financial interests worth $27.8 million; Harbor Commissioner Ronald S. Lushing ($13.2 million); Water and Power Commissioner A.M. Echevarria ($13.1 million) and Airport Commissioner Samuel Greenberg ($12.1 million).

Greenberg disregarded the city forms and typed his assets on blank paper instead.

“They are going to have to remodel the damn forms,” said Greenberg, owner of the rental firm Sam’s U-Drive. “They are too complicated as far as I can see.”

Greenberg was one of the few commissioners interviewed who said he did not mind publicly disclosing his assets. “I personally don’t give a damn. I got nothing to hide,” he said.

The intent of the ethics law is to avoid conflicts of interest in local government by requiring city officials to disclose their personal finances in more detail than is mandated under state law. Voters in November passed the ethics reform measure Proposition H, a City Charter amendment that paved the way for the council to approve new disclosure requirements.

The reforms were initiated by the mayor during 1989 when he faced several investigations into his personal finances and official conduct, including his employment by two banks that had business dealings with the city. A wide-ranging federal probe into the mayor’s activities is continuing.

Hundreds of disclosure forms submitted last week reveal the following examples of outside income, gifts and investments by city employees:

* R. Douglas Collins, executive director of the city employee relations board, reported earning $99,000 last year while working primarily nights and weekends as a labor arbitrator. That figure exceeds his $56,000 city salary as an arbitrator who settles disputes between the city and its workers.

When his moonlighting involves daytime arbitration hearings, Collins said, he takes vacation or unpaid leave from his city job. He said he keeps track of his own hours at City Hall, although they are “subject to the review of my secretary.”

Collins said his private arbitration practice has grown in recent years to 30 hours per week, and he is careful to avoid any conflicts with his city employment. “I like the mix of work, not only because it is lucrative but because I enjoy it,” he said. “Obviously, I can’t let this other business grow any more or I wouldn’t be able to handle both.”

* Two city public works officials each reported free meals and gifts from two companies that have received contracts with the Public Works Department.

Jaykim Engineers Inc. provided a Christmas dinner valued at $60 to public works board member Dennis Nishikawa and $65 worth of meals and a clock to Delwin Biagi, director of the Bureau of Sanitation. James M. Montgomery Consulting Engineers gave a pen valued at $75 to Nishikawa and $160 in free meals and a pen set to Biagi.

Both Nishikawa and Biagi said their acceptance of gifts from contractors did not constitute unethical conduct or a conflict of interest. However, both said that they stopped accepting such gratuities at the beginning of the year to comply with the new ethics law.

* Airport official Maurice Z. Laham reported selling stock in four airline companies in August of last year. He did not report the precise values of the stock, but told The Times last year they were worth an estimated $45,000.

Laham, who is in charge of reviewing environmental clearances for airlines, approved requests from at least one airline whose stock he owned and made general recommendations affecting all airlines operating in Los Angeles, The Times reported last July.

Laham was on vacation and could not be reached for comment. His ownership of airline stock created an appearance of a conflict of interest, according to Airport Commission President Johnnie L. Cochran Jr., who referred the case to the city attorney’s office. The city attorney’s office on Friday was unable to provide the outcome of its probe.

Of the $3.3 million that Cochran reported earning last year, he received more than $10,000 in legal fees through a subsidiary of Hertz Corp., which rents cars at city airport facilities. Cochran said he sees no conflict because the Hertz Claim Management company dispenses work to Cochran’s law firm for litigation related to the Southern California Rapid Transit District.

Cochran said he was not required to list any of his clients, but has reported the Hertz income for the past two years “out of an abundance of caution.” But he listed no other clients. “Do you know how many clients I have? Thousands. I don’t think they want to know my clients.”

However, attorney Carlyle W. Hall Jr., a member of the Community Redevelopment Agency board, listed 22 clients who paid his law firm $742,500 in fees.

“It didn’t thrill me to do it, believe me,” said Hall, the only commissioner who disclosed a list of law clients. “I thought it was really overkill and unnecessary.”

Many commissioners expressed frustration at the mixed signals they received from city officials before completing the new disclosure statements.

Fire Commissioner Anne Reiss Lane, who disclosed holdings worth $2.8 million, said she attached “a letter of protest” to her disclosure forms.

“Without question, more conflicting advice has been given by the city attorney, the mayor’s attorney, the Ethics Commission, the city clerk and the Fire Department regarding these forms than at any time in my eight years as a commissioner,” the note said. “Before the next filing is due, something must be done!”

Fire Commissioner James Blancarte said he had instructed commission staff not to file his statement with the city clerk. “I’m waiting to see what exactly they are going to do with this law,” Blancarte said last week. To avoid a $25-per-day penalty, Blancarte said on Monday, he has changed his mind and directed the Fire Commission staff to file his statement.

The forms put commissioners in “a floating crap game” where they must decide what to file and not to file on their own because the city attorney’s office is “too gutless” to issue opinions in writing, said Police Commissioner Daniel Garcia.

The city attorney’s office responded to 50 to 60 calls per day and was unable to respond in writing, said Deputy City Atty. Raymond Ilgunas. He said he was unaware of any complaints about conflicting advice.

Garcia, a prominent lawyer and City Hall lobbyist, submitted the economic disclosure forms to the city without revealing his annual income or other financial data. He said that he is uncertain what information he is required to provide.

“Your guess is as good as mine,” he said. “I don’t think I’m hiding anything.”

Two of Garcia’s colleagues on the Police Commission--President Herbert F. Boeckmann and Vice President Reva B. Tooley--resigned last week over the financial disclosure forms.

“I’m a fairly private person,” Tooley said. “I’m not interested in seeing my personal financial history in the Los Angeles Times.”

Boeckmann said it took his son three days to fill out the form, which came to 78 pages.

“The ethics rules are not ethical,” said Boeckmann, a car dealer and multimillionaire who quit his post as president of the Police Commission. “I don’t think it’s anybody’s business how much I make in total earnings.”

Saying he is concerned about the security of his family, Boeckmann added, “I am laying out who I am, what I am, where I’m at. Come get me. It’s just wrong.”

Also expressing privacy concerns was David Simon, who resigned his position on the Municipal Auditorium Commission.

Lefkowitz, the assistant city attorney who refused to follow the city’s disclosure requirement, wrote that complying would “invade my rights to privacy . . . and would possibly endanger my safety and that of my family.”

Times editorial researcher Cecilia Rasmussen contributed to this story.