Extent of Hubbell’s Lobbying Work for L.A. Questioned

When former Associate Atty. Gen. Webster L. Hubbell was fighting last year to secure payment of $24,750 from the city of Los Angeles, he assured officials that he had worked hard for the money.

Hubbell, now serving a sentence in federal prison for bilking $482,410 from his former clients and partners at the Rose Law Firm in Little Rock, Ark., wrote in March 1995 to a city official that during his three months of work, he was “in almost daily contact” with transportation “officials” from two agencies.

And in a subsequent July 1995 letter to another city airport official, Hubbell said he had held “approximately 15 hours” of telephone conversations with the U.S. Transportation Department’s general counsel, Stephen H. Kaplan.

But when questioned this year by Transportation Department investigators, Kaplan could recall only “one or two” calls from Hubbell--spanning no more than five minutes each--according to records obtained by The Times.

Hubbell, when confronted within the past year by the investigators at the prison where he is serving time, conceded that rather than contacting “officials” from two agencies, he had contacted only Kaplan and a secretary who answered Kaplan’s telephone.

The varying representations by Hubbell emerge as new questions are being asked about how the former law partner of Hillary Rodham Clinton and close friend of the president managed to land three important clients in the nine-month period between his departure from the Justice Department and his entry of a guilty plea in December 1994. The two other clients were an arm of Indonesia’s Lippo financial group and a nonprofit foundation in Los Angeles.

Hubbell’s lawyer in Washington, John Nields, declined to comment when reached Thursday.

The conflicting statements regarding Hubbell’s work for Los Angeles are detailed in a confidential, 22-page report summarizing the Transportation Department inspector general’s investigation. It was prepared in March in response to questions posed by Rep. William F. Clinger Jr. (R-Pa.), chairman of the House Committee on Government Reform and Oversight, who was following up on a Times account in September 1995 that disclosed Hubbell’s role with the city of Los Angeles.

The inspector general’s report and more than 100 pages of related documents provide the most detailed account to date of the circumstances that surrounded the city’s hiring of Hubbell, in September 1994, through a six-month contract that was awarded without competitive bidding.

Hubbell was hired to help persuade the federal Transportation Department not to block Mayor Richard Riordan’s proposed transfer of $58 million from a Los Angeles International Airport fund to the city’s general fund. Riordan had campaigned in 1993 on a pledge to use airport-related revenue to help pay for city services, including the hiring of police officers.

According to the inspector general’s report, Hubbell was hired under an arrangement whereby he “would not bill by the hour or on an itemized basis due to his earlier experience with billing disputes” at the Rose Law Firm.

The inspector general’s office referred for possible criminal prosecution Hubbell’s representations regarding his work for Los Angeles, but the U.S. Attorney’s office in Washington declined on Feb. 15 of this year to prosecute, according to the report.

In Los Angeles, City Controller Rick Tuttle said Thursday that he found Hubbell’s admissions to the federal transportation investigators “troubling.”

“It seems to me that we need to go after a reimbursement,” said Tuttle, who stalled the delivery of city payments to Hubbell last year until the former official provided statement in writing to verify what, if any, work he did for the city’s Department of Airports.

Tuttle commented after reviewing aspects of the inspector general’s report, provided to him by The Times. The city controller said he would decide what immediate steps to take after he confers with officials at the inspector general’s office.

Hubbell told the transportation investigators that he believed he provided the city “more than their money’s worth.” In particular, Hubbell said that he gave “on-call” advice to Theodore O. Stein, who at the time was a senior policy advisor to Riordan and the president of the Airport Commission. Stein did not return calls from The Times seeking comment.

Hubbell told investigators that he “did not think he misrepresented anything,” in his efforts to get paid last year, according to the report. Hubbell also said that he was assisted in writing the two letters in question by the men who received them--Stein and John Driscoll, executive director of the city Department of Airports. Driscoll did not return a call seeking his comment.

Hubbell was hired to help Riordan clear a major hurdle: Federal law prohibits the diverting of airport revenue for general municipal purposes.

After an 11-month review, a presidential appointee of the Federal Aviation Administration announced in February 1995 that officials would not seek to block the city’s proposed shift of the $58 million of airport revenue to the city’s general fund.

The money, including interest, had been generated by the sale of surplus airport property to make way for construction of the Century Freeway.

The newly obtained documents, including internal White House memos and telephone logs, show that Riordan’s push for the $58 million reached beyond the Transportation Department and all the way to Bruce Lindsey, deputy counsel to President Clinton. Lindsey met numerous times with representatives of Riordan on the issue and, one month before the administration’s final decision, sent a detailed memo to White House Chief of Staff Leon E. Panetta.

In that Jan. 11, 1995, memo, Lindsey pointed out the obstacles to siding with what Riordan wanted. He noted that Los Angeles, as a condition of receiving about $200 million of federal airport funding, was obligated under law to guarantee “that airport revenues will be used only for airport capital and operating expenses.”

The Clinton administration’s ultimate position, allowing the shifting of the $58 million funds, has been strenuously criticized by the Air Transport Assn., a trade group representing commercial airlines.