Sparks Fly Over Airing of Report on Hiring of Hubbell

Reviving a thorny and embarrassing local issue, a City Council panel on Thursday reviewed what the chairwoman labeled the “unfinished business” of how and why former Associate U.S. Atty. Gen. Webster Hubbell was hired and paid by the city at the same time he was being accused of cheating his former law partners and clients.

The hearing, which took up a year-old report on the affair by the city controller and a private law firm, focused mainly on the role of onetime city attorney candidate Theodore O. Stein, a former unpaid advisor to Mayor Richard Riordan and a former airport commissioner, who hired Hubbell.

Stein recently was nominated by Riordan to the Harbor Commission. But before he undergoes committee hearings followed by a City Council vote on his confirmation, prickly questions remain about Stein’s hiring of Hubbell in August 1994.

Neither the timing of the hearing nor Stein’s nomination were lost on the committee members. But while committee Chairwoman Ruth Galanter agreed that the report has been hanging around too long, she said the panel had other pressing issues to deal with, including the reorganization of the Department of Water and Power and other airport issues.

Councilman Rudy Svorinich, nonetheless, accused Galanter of playing politics by “delaying” the report until now.

“I believe it was to purposefully try to harm the appointment of Mr. Stein and I believe it was to take another swipe at the mayor’s office,” Svorinich said after a somewhat testy 95-minute committee hearing. “I think there’s some political ax-grinding going on behind the scenes here. Frankly, I find that distasteful.”

Galanter would not say whether she intends to bring up the Hubbell matter during Stein’s confirmation hearings, but she hinted that it might be an issue. Some council sources have said she is critical of the shuffling of commissioners: Stein has been tapped to replace Lelong Wong, who is moving to the Airport Commission. The mayor asked former airport commissioner Dan Garcia, a well-liked City Hall insider, to leave that post last month--a move that was not well received by the council.

Thursday, however, it wasn’t only the committee members criticizing each other. At one point, Council President John Ferraro asked pointed questions of City Controller Rick Tuttle who, along with the outside law firm, investigated the Hubbell hiring. In one exchange, Ferraro asked Tuttle if he wrote the report in an attempt to be “vindictive” or whether it was meant “to embarrass anyone.”

“You’ve known me a long time and that certainly was not my intent,” Tuttle responded.

A former law partner of First Lady Hillary Rodham Clinton and golfing buddy of the president, Hubbell was hired--and paid $24,750 by the city--to lobby the federal Department of Transportation to approve a transfer of $58 million from a land sale at the airport to the general fund.

The year-old report by Tuttle raised several troubling issues for the city--and the mayor--including whether Stein had the ability to hire anyone in his role as a senior advisor to the mayor and whether Department of Airports General Manager John Driscoll should have intervened.

At one point, Galanter summed up her view of the arrangement this way: “Let’s face it: Ted hired him and Jack [Driscoll] covered for him.”

The committee agreed to send that report to the full council along with three recommendations from it. Galanter, however, said she will ask the council to support all the proposals in the report, including one that calls for the council and the mayor to notify Stein that his actions “embarrassed” the city.

For his part, Stein did not appear at the committee hearing but instead sent his attorney, who indicated that the report is inaccurate and misleading.

At issue is whether Stein, as a commissioner and mayoral advisor, should have entered into an agreement with Hubbell, and whether his requests for payment should have been validated by the Department of Airports general manager. Driscoll, the general manager, is out of town on business and did not attend Thursday’s hearing.

But Neil Papiano, who is representing Stein, said the report’s conclusions--and blame on his client--could be an attempt to find “a scapegoat” for the city’s involvement with Hubbell, who has been indicted on tax evasion charges.

The Hubbell arrangement was made public by The Times in September 1995, leading Galanter and Ferraro to seek the full investigation. Thursday’s hearing was the first public airing of the report.