Ethics Panel Bungled Probe, Study Says : Report: Inquiry of city attorney’s office was mishandled, prosecutors charge.

The Los Angeles Ethics Commission badly bungled its first major case, an investigation of City Atty. James K. Hahn’s office, prosecutors concluded in an internal memorandum last year.

In the stinging internal report prepared last summer--a copy of which was obtained by The Times on Tuesday--two prosecutors with the Los Angeles County district attorney’s office portrayed the Ethics Commission as an irresponsible, misguided agency whose first major inquiry took on “the characteristics of the very problem it was designed to prevent.”

The high-profile investigation, which surfaced publicly with a December, 1991, raid on Hahn’s office, centered on allegations that Hahn’s employees improperly used city time and facilities for political work. In August, the district attorney’s office closed a criminal investigation it had taken over from the ethics agency, saying that it had found no evidence of impropriety.

Last month, the Ethics Commission, completing its own review of the evidence gathered by the district attorney’s office, strongly disagreed, concluding that improprieties and possible violations of the law had occurred. But the ethics agency, in part because of the district attorney’s earlier action, did not recommend any further action in the case.

The internal report and interviews Tuesday with prosecutors William W. Hodgman and Paul W. Turley generally support Hahn’s view of the case. Hahn said the case sprang from complaints by disgruntled employees and a disagreement with the commission over hiring of its city attorney.

Ethics Commission President Dennis Curtis strongly disputed the prosecutors’ assessment, saying it is “full of inaccuracies and omissions.” Curtis said the district attorney’s office had been closely involved in every step of the investigation, including obtaining search warrants and agreeing at one point to call witnesses before a grand jury.

But Hodgman contended that the actions taken by the Ethics Commission in the early stages of the investigation weren’t supported by the evidence. For example, the motives of an initial whistle-blower and an employee of the city attorney’s office who first complained were not fully considered and disclosed to investigators when search warrants were being sought, he said.

Other simple explanations that could account for the political activities of some employees--such as those who were only working part time--were not adequately evaluated, the report said.

“It is naive to assume that the adversarial relationship between these two entities was not a factor,” the prosecutors’ report said.

Ethics Commission Executive Director Ben Bycel said Hahn’s “fantasy and conspiracy theories seem to be supported by the district attorney.”

“We have the facts,” he said, referring to his agency’s own report.

Curtis complained that the district attorney’s office identified the initial confidential informant to Hahn by providing the whistle-blower’s name in papers turned over to the city attorney.

Hodgman acknowledged that the name was provided to Hahn but said it was legal to do so at the time. The name is no longer publicly available because the Ethics Commission asserted legal rights to keep the name private, he said.