Top officials in the administration of former Los Angeles Mayor Richard Riordan said Monday they decided to avoid individual contact with businesswoman Katrina Leung, now accused of being a Chinese double agent, after she allegedly suggested that the city could secure a port contract by making payments to influential people.
Leung, who was instrumental in arranging a 1998 meeting between Riordan and the president of China, has been accused by federal prosecutors of serving as a Chinese double agent while working as a paid FBI informant for 20 years.
Leung’s attorney, Janet Levine, denied published reports about the incident.
“It’s absolutely, completely untrue,” Levine said, adding that Leung had not been involved in “transmitting, paying or having anything to do with any bribes.”
The former Riordan officials, who declined to be identified, said Leung’s alleged comments to one aide in 1998 had been “inappropriate,” but they concluded then that Leung had not been specific enough in her statements to report to authorities for investigation.
But as a precautionary measure, the former aides said they jointly decided in 1998 that it would be best to not meet one-on-one with Leung in the future.
“We decided none of us would meet with her alone,” one aide said.
Leung, who was active in a Los Angeles sister city committee involved with China, was instrumental in setting up a 1998 meeting between Riordan and Chinese President Jiang Zemin during a trip by the mayor to China, said former Deputy Mayor Stephanie Bradfield, who organized the trip.
Riordan took the trip, in part, in an attempt to reach an agreement with the China Ocean Shipping Co., also known as Cosco, to establish its shipping operation at the Port of Los Angeles instead of the Port of Long Beach, which was vying for the facility.
Cosco, which has subsidiaries controlled by the Chinese government, declined during Riordan’s China trip to sign an agreement with the mayor, who did not press the plan during the meeting with Zemin.
“Katrina had access to people high up in the Chinese government,” Bradfield said. “Katrina was very helpful on the ground.”
Bradfield said Leung sat in on the meetings in China with Riordan.
Riordan’s failure to secure an agreement with Cosco was news upon his return. One high-level Riordan aide at the time, who spoke on condition of anonymity, recalled a visit from Leung at City Hall in which the Chinese American businesswoman brought up the “port contract.”
The aide recalled Leung saying, “You know how these things work. You will have to put some money in a certain bank in Hong Kong for certain people, and then you will get the contract.”
The aide recalled immediately ending the conversation and asking Leung to leave before reporting the contact to the aide’s boss.
The aide consulted a private attorney.
“We decided that no crime had been committed. She had not solicited a bribe. I cut her off,” the aide said. As a result, Leung’s comments were not reported to the city attorney’s office or the LAPD for investigation, the aide said.
“It wasn’t very specific,” the aide said. Leung did not mention a dollar amount nor identify officials who might be paid. The aide did not recall whether Leung had mentioned Cosco by name, but said it was clear that was the contract to which she was referring.
Cosco officials and Riordan did not return calls for comment.
In Los Angeles, FBI spokesman Matthew McLaughlin said investigators would examine the purported actions by Leung as part of their overall probe.
“We are investigating this as appropriate,” McLaughlin said.
“As we have said in the past, we will take this investigation wherever it leads,” McLaughlin said. “But just because we are investigating, doesn’t mean that wrongdoing occurred.”
Times staff writer Greg Krikorian contributed to this report.