LOCAL ELECTIONS / L.A. MAYOR : Wachs Assails Record of Bank Linked to Woo

Los Angeles Councilman and mayoral candidate Joel Wachs on Wednesday urged three public agencies to withdraw millions of dollars they have deposited in a bank with ties to a mayoral rival, Councilman Michael Woo.

Wachs cited a Los Angeles Times report Friday that Cathay Bank in 1991 made only one of its 121 home loans to a Latino and none to African-Americans. More than 97% of the bank’s loans in 1991 went to Asian-Americans.

A centerpiece of Woo’s mayoral campaign has been a plan to boost minority community investment through a consortium of Asian-American and black financial institutions that could pool loan capital.

Woo’s father was a longtime vice president of the Chinatown-based Cathay Bank and is now on its board of directors. The bank’s executives have actively solicited political funds for Woo’s campaign, and the councilman, who held Cathay stock until last year, was author of an official city commendation of the bank in 1987. However, Michael Woo has never been an officer of the bank and said he has stayed out of the institution’s decision-making. He also emphasizes that Cathay is a part of his fledgling consortium to steer loan capital to the inner city.

At a news conference outside the bank Wednesday, Wachs called Woo “a charlatan” and said his consortium project’s goals do not jibe with Cathay’s record.

Wachs urged the city treasurer, the Community Redevelopment Agency and the Los Angeles County Transportation Commission to withdraw funds they have deposited at Cathay. Dunson Cheng, president of Cathay, said the amount on deposit is about $10 million.

Wachs said he believes that Cathay has not complied with a city law that prohibits deposits in banks with poor minority lending records. However, the rating system to disqualify banks has not yet been developed.

Wachs also claimed that Cathay has not joined a city-organized program to steer new loans to the inner city. In fact, Nancy Huntington, an officer with Manufacturers Bank who is coordinating the marketing of that program to private banks, said Cathay has been “very interested” but has not yet decided whether to join.

Meanwhile, Garry South, press secretary to the Woo campaign, accused Wachs of “hypocrisy and unmitigated gall.”

“In 22 years on the City Council, (Wachs) has no record of leadership in this area,” South said. In fact, South said, if Wachs were sincerely concerned about the issue he should be “protesting in front of the big banks about their lending practices in the minority community.”

Wachs countered: “Look, it has not been my claim that I’d get Asian-American banks to provide capital to the inner city. That’s been Mike Woo.”