Bradley Tried to Influence Audit, Controller Says

Mayor Tom Bradley attempted to “interfere” with an audit that later concluded that Bradley associate Juanita St. John, head of the Task Force for Africa/Los Angeles Relations, owes the city $260,000 in missing taxpayer funds, Controller Rick Tuttle said Friday.

The Times has also learned that part of an ongoing Los Angeles police investigation into the task force is focusing on whether city funds were illegally transferred into the accounts of a real estate investment in which Bradley and St. John are partners.

According to two sources familiar with the investigation, a copy of a canceled check obtained by the controller’s office shows that St. John wrote herself a $5,127 check on the task force’s bank account. The endorsement, sources said, indicates that the check was deposited into the account of Kathy St. John II, the real estate partnership named after St. John’s daughter, who is on the mayor’s paid City Hall staff.

Juanita St. John’s lawyer, Richard Hirsch, said he was unaware of the investigation into the transfer of funds.

“I really have no comment. I haven’t seen it. I haven’t discussed it with her. We’ll just have to in due course deal with that as well as other issues,” he said.

On Friday, the city controller released his report after a nearly five-month audit of the task force and its troubled finances. Bradley helped create the task force and kept it alive by pushing for $400,000 in city funds since 1985.

At a press conference, Tuttle said he was contacted in June by a longtime aide to the mayor, Anton Calleia, regarding three pending matters in the controller’s audit, including a letter that disclosed the firing of Bradley’s daughter, Phyllis, as an employee of the task force. Tuttle also said the mayor’s office urged him to withdraw a request that St. John furnish city auditors with her federal income tax filings.

Tuttle called the attempts by the mayor’s office to “influence” his audit “extremely inappropriate” and “unprecedented.” The audit was released Friday, along with transcripts of interviews of Bradley and Calleia.

Bradley and Calleia were not available for comment Friday. But the mayor, in earlier questioning under oath as part of the audit, denied trying to interfere with the probe of St. John, a friend and business associate.

“Never was there any intention of, in any way, influencing or thwarting your audit,” Bradley told Tuttle, according to the interview transcript.

Said Calleia: “I want to state (as) emphatically as possible it was never my intent to influence the outcome of the audit.”

‘Accusations Troubling’

Speaking for Bradley at a City Hall press conference Friday, Deputy Mayor Michael Gage said, “I generally find Mr. Tuttle’s accusations troubling, unfounded and political on its face.”

Several City Council members who reviewed the audit report Friday were critical of the alleged actions by the mayor and his staff.

“I think it’s very troubling,” said Councilman Michael Woo, chairman of the Governmental Efficiency Committee who will hold a hearing on the report next week. “These are very serious charges about potential tampering with the auditing process.”

Councilwoman Gloria Molina said: “For the mayor’s staff people to continue to be part of trying to cover up documentation that rightfully belongs to the public is a huge mistake, and its implications for the mayor . . . are very poor. It’s just not a smart move on their part at all.”

The audit concluded that St. John owes the city more than $260,000, including $36,000 in interest. On Friday, Tuttle asked the city attorney and district attorney to investigate whether St. John should face criminal charges.

The 58-year-old St. John, who has filed for bankruptcy, already faces misdemeanor criminal charges for failing to respond to a city subpoena for records to account for the missing money.

She withdrew $180,000 in cash and checks made out to herself from the task force account, the auditors found. They also allege that she commingled task force and personal funds in family checking accounts in violation of her city contract.

St. John was not available for comment Friday.

Probably Knew About Letter

Bradley interjected his office into the audit process when he learned that St. John had provided the controller with a copy of a letter that outlined the reasons why his daughter, Phyllis, was fired, Tuttle said. Gage acknowledged that Bradley probably knew about the letter because it involved his daughter.

The mayor was concerned that the controller’s office might “leak” the confidential letter and violate his daughter’s right to privacy, Gage said.

“Can you imagine the embarrassment for the mayor if his daughter sued the city?” Gage asked.

Bradley dispatched Calleia to the controller’s office June 27 to speak with Tuttle. As controller, Tuttle is an elected official and not appointed by the mayor.

When Calleia later was questioned about his actions, he told auditors on Aug. 17 that he wanted to protect Bradley’s daughter.

“My concern was that specifically a letter of dismissal of (Phyllis Bradley) from the task force should not be made part of the record because the individual had legitimate privacy rights to keep that confidential,” Calleia said.

A day later, the mayor told auditors that he was trying to protect the city from “liability” when he allowed Calleia to ask for the return of his daughter’s termination letter. According to transcripts, Bradley said the city attorney’s office agreed with his opinion that privacy laws and a mayor’s executive directive prohibited the controller from obtaining the letter as part of his audit.

Bradley told the auditors: “I did not see how you would blatantly, in the face of that law and the clear instructions of that executive directive, jeopardize the city by taking that letter and thus making it possible for someone to secure it.”

But the controller’s office received approval from another division of the city attorney’s office to look at the termination letter.

“They were able to review the letter to see whether it had any impact on their audit,” Senior Assistant City Atty. Peter Echeverria said.

Calleia also told Tuttle that the amount of Phyllis Bradley’s salary could not be released, according to the controller’s report. The mayor’s daughter was paid $9 an hour as a full-time secretary between July, 1985, and June, 1986, according to task force personnel records.

Brushes With the Law

The younger daughter of the mayor, Phyllis Bradley has had a number of brushes with the law. In 1984, she was sentenced to three years’ probation for driving under the influence of drugs and possession of PCP. In 1980, she pleaded no contest to a single count of petty theft in connection with the theft of three blouses valued at $78 from the downtown May Co. store--her third shoplifting conviction.

Phyllis Bradley could not be reached for comment.

According to a memo Tuttle wrote to himself, the controller called Calleia shortly after the meeting to tell him that he was “out of place” to involve himself in the audit and his conversation was “improper.” Tuttle noted that when Calleia again raised the subject of the Phyllis Bradley letter, the controller said, “Stay out of it, Anton.”

Calleia made two additional demands regarding St. John, according to Tuttle’s memo.

In one instance, the mayor’s aide asserted that the controller’s office had no right to look at St. John’s personal income tax returns and should withdraw its request for the records.

During their interviews as part of the audit, Bradley and Calleia denied having any knowledge of Tuttle’s allegation that Calleia had asked the controller’s office to stop trying to obtain IRS records involving St. John.

“I don’t recall a conversation about IRS,” Bradley said.

According to audit documents, St. John later gave auditors copies of 1985, 1986 and 1987 income tax forms to show the salary paid to her by the task force. However, Tuttle said, the IRS told his auditors that the forms were never filed.

IRS spokeswoman Carole Shapiro said the department could not disclose whether St. John also faces tax questions stemming from her handling of funds for the task force.

In the final instance of alleged interference, Calleia told Tuttle that his auditors had improperly disallowed one-half the cost of a New York hotel room charged to the task force account in 1986 for St. John and her husband, the report said. It is believed that Bradley learned of the disallowed hotel costs in conversations with St. John.

Bradley said in the controller’s interview that “normal (city) practice” permits spouses to travel with city employees to conferences and conventions and “simply charge the hotel (bill) to the city, even if their spouses stayed with them.”

“I thought this was a sudden departure” from policy that could affect thousands of city workers, Bradley said.

Gage noted Friday that both Bradley and Calleia made their remarks in interviews under oath, while Tuttle did not.

“Given the characterization that Mr. Tuttle has put on this particular incident, I have grave doubts about Mr. Tuttle’s forthrightness in this instance.”

Told of Gage’s comment, Tuttle responded: “His inflammatory rhetoric and attempts at character assassination are nothing more than a deceitful effort to excuse the serious issues raised in our audit.”

Tuttle said Friday that he checked with the city attorney about possible violations of law involved in Bradley’s attempts to influence the audit. He said he was advised that there appeared to be nothing illegal as far as the city attorney was concerned.

Still pending in the controller’s office is an audit of the city treasurer’s operations, including a controversy over $2 million deposited in Far East National Bank, which Bradley served as an $18,000-a-year consultant. Bradley this year returned fees paid him.

Bradley has been under investigation by the city attorney’s office since April for possible conflicts of interest involving his business dealings with associates, including St. John. City Atty. James K. Hahn is due to release his office’s report later this month.

On the federal level, the local office of the FBI and the U.S. attorney’s public integrity section in Washington are investigating Bradley for possible insider trading violations in his stock dealings.

In 1981, Bradley and St. John and several other investors formed a limited partnership to purchase vacant land in Riverside County. Bradley’s investment in Kathy St. John II is between $10,000 and $100,000, according to his government financial disclosure statements. The forms show that Bradley holds more than a 10% interest in the investment. State law does not require the mayor to list the specific amount of his investment.

Capt. Doug Watson, who heads the police investigation of Bradley, declined to comment on the probe of the transfer of task force funds into Kathy St. John II. Watson said it will “be months” before the entire police investigation is finished.

FINDINGS OF AFRICA TASK FORCE AUDIT

* The city allocated $388,920 to the Task Force for Africa/Los Angeles Relations over four years between July 1, 1985, and June 30, 1989.

* Task force Executive Director Juanita St. John should repay the city $260,714, including $178,812 in “unaccounted-for cash,” $5,505 in travel and other costs, $37,853 for unauthorized repayment of a task force bank loan, $2,400 for legal fees and $36,112 in interest on the money.

* St. John commingled public and private funds in bank accounts, approved her own expenditures and signed checks payable to cash and herself.

* Officials at UCLA, where the task force was located, advised the mayor’s office on several occasions that the task force was delinquent in meeting its financial obligations to the university, but the mayor’s office never brought the problem to the attention of city officials responsible for administering the task force contract.

* City auditors determined that internal controls governing how the task force handled city funds “did not exist.” There also were no written procedures regulating how task force funds should be administered.

* St. John made some inconsistent statements to auditors. At one point, she told auditors that records detailing the finances of the task force were at her home. Later she said these records had been stolen during a burglary at the task force’s UCLA office. No report on the burglary was ever made to campus police.

Source: controller’s office

Staff writers Rich Connell and Richard Simon contributed to this report.

City Controller Rick Tuttle calls for an expanded investigation of Juanita St. John. Page 25