Ethics Panel’s Credibility Is Questioned Again : Government: Critics attack bold tactics used by watchdog panel after inquiry into city attorney’s office is dropped. Commission officials say making enemies is unavoidable and they will not retreat.

His office cleared of wrongdoing in the first high-profile case initiated by the Los Angeles Ethics Commission, City Atty. James K. Hahn this week excoriated the watchdog panel, likening it to a “runaway freight train.”

The decision by Dist. Atty. Ira Reiner’s office to drop the inquiry for lack of evidence left the ethics panel once again defending itself in its two-year, hedgerow-to-hedgerow battle to establish its credibility.

Critics attacked the bold tactics--search warrants and grand jury subpoenas--used early in the investigation, which centered on allegations that “ghost employees” were doing political campaign work in Hahn’s office.

In a strongly worded report this week, the district attorney’s office concluded that there was no foundation to the allegations--made in a tip to the ethics panel’s whistle-blower hot line--although there was an appearance of impropriety.

Ethics officials defended their handling of the case, saying they are bound to make enemies as they carry out their mandate from voters and step up efforts to enforce clean government.

Still, the dispute over the tactics used in the inquiry of Hahn’s office raises fundamental questions about how the new watchdog agency should fulfill its mandate to ferret out misconduct in high places. How aggressive should it be in pursuing alleged wrongdoing? How can it best protect reputations from needless damage? How does it assure the public that it is independent of politicians and thorough in its investigations?

An attorney for one target of the investigation--computer specialist Tony Roland--said his client has lost business and been “crucified” by the ethics panel. The other key target, Hahn’s administrative chief, Chuck Fuentes, has been on medical leave for months, suffering from hypertension that his attorney says can be traced to the investigation.

Ethics commissioners say their actions were carefully weighed and approved and executed through the district attorney’s office.

“I don’t believe the Ethics Commission is hurt by any of this,” said Ben Bycel, the panel’s executive director and a former law school instructor and Associated Press reporter. “There isn’t anything that we’ve done as it relates to the investigation of Jim Hahn’s office that we should be embarrassed, upset or otherwise worried about.”

Ethics Commissioner and UCLA psychiatrist Cynthia Telles said: “This was not done flippantly, without serious consideration.”

Bycel and commissioners have refrained from discussing specifics of the case, in part because they will be reviewing the work of the district attorney’s office to determine if any independent administrative or civil action is warranted under city law.

During Christmas week last year, the investigation made headlines--and sent a shudder through the local political Establishment--when 20 district attorney’s investigators swooped down on Hahn’s office, seizing computers, electronic data and files. Sources said the warrants, as well as the grand jury subpoenas that followed, were urged by Ethics Commission officials, who argued that crucial evidence might be destroyed if Hahn’s office was contacted.

Shortly after the search warrants were served, Reiner’s office assumed control of the case when a Superior Court judge, in a suit brought by Fuentes, ruled that the ethics panel had exceeded its authority when it became involved.

Recently, that decision was reversed by a state appellate court, which found that the ethics panel not only proceeded legally, but had broad authority to pursue a wide range of allegations of government misconduct.

Still, the early tactics were a break with tradition in local political investigations: that such inquiries be conducted in as quiet and cooperative a fashion as possible.

Veteran prosecutors and investigators say they carefully calculate their moves in political cases out of fear of unnecessarily damaging prominent officials or their associates. And, based on experience, they also are wary of political misconduct cases because such cases are scrutinized by the media, are often controversial and difficult to prove.

“Cases like this, they’re a pain,” said Jack White, Reiner’s chief of investigators for the past eight years. “You have to prove almost that someone was not working as hard as they should. . . . It doesn’t lend itself to a smoking gun.”

Until the Ethics Commission came along, White said he had never served a search warrant on an elected official’s office during a political misconduct case. He said he prefers to seek the information informally and generally has been successful.

“This was new ground for me,” White said, noting that his staff knows and works with many people in the city attorney’s office. “How it’s done is always a judgment call.”

Hahn said he should have been called and told of the allegations and what investigators needed--particularly because there was no indication that he would obstruct the investigation.

“In my opinion, (the search warrants) were designed to do one thing, and one thing only,” Hahn said. “To generate publicity in something that was not supposed to generate publicity.” Ethics commissioners deny this. And they say conforming to the old protocols of political investigations is not necessarily what voters had in mind when they approved creation of the watchdog agency.

“There haven’t been any real prosecutions or (any) attention given to ethical violations in a long, long time,” said Ethics Commission President Dennis Curtis, a USC law professor. “We knew we were going to step on some toes.”

Ethics Commissioner Ed Guthman, who worked with Curtis to monitor actions taken in the investigation, said the ethics agency should take a determined approach to serious allegations of misconduct--like those concerning Hahn’s office.

“I think if you have law enforcement responsibility, there’s only one way to do it, regardless of whether they are friends or political officials,” said Guthman, who served as press secretary to U. S. Atty. Gen. Robert Kennedy and later was national editor of The Times.

Supporters of the panel agree. “Voters want a hard line . . . not business as usual,” said Ruth Holton, acting head of California Common Cause, a watchdog group that pushed for creation of the ethics agency.

“The problem with the old approach . . . is they might not necessarily get information they need. The old approach relies on trust and, unfortunately . . . elected officials haven’t given the public a lot of reason to trust them on these matters.”

Geoffrey Cowan, who chaired the citizens commission that drafted the city’s new ethics laws, noted that search warrants and subpoenas are frequently used by the FBI in political corruption investigations--as they were in a series of recent probes at the state Capitol.

The Ethics Commission “will sometimes investigate people and names will become public,” Cowan said. “It is an unfortunate but inevitable part of the job.”

Brian O’Neill, Roland’s attorney, said the damaging consequences of the Ethics Commission’s approach, at least in its first major case, were unfortunate and not necessarily inevitable.

Roland, a computer consultant who worked part time on Hahn’s staff and part time for the campaigns of prominent Democratic candidates, had his home raided and his equipment and files seized and held for nine months.

Prosecutors concluded that Roland, the central focus of the tip, worked part time and largely was able to set his own hours. The city was not billed for the time he put in on private political matters.

“The poor guy is getting crucified for everyone else’s pleasure,” O’Neill said. “It is not a necessary ingredient for an agency conducting an investigation to ruin the reputations of those involved.”

Ethics officials agree, saying many of their probes have not and will not become public. But, they add, they sometimes must take actions that probably will become public to ensure that they have not compromised the integrity of their investigations.

The setbacks and controversies notwithstanding, commissioners say they are in a stronger position than when they launched the investigation of Hahn’s office. They exercised investigative powers that were affirmed by an appellate court ruling.

As the commission gathers its investigative strength, it has no intention of retreating from its relatively assertive approach to ethics enforcement.

“We did what we thought was right,” Guthman said. “I’m sure that’s the way we’ll proceed in the future.”