THE MAYOR UNDER FIRE : The Spiegel Connection : No Wrongdoing Is Found in Thrift Official’s Loan of $50,000

When Mayor Tom Bradley and his fellow investors needed to make a balloon payment in late 1985 on a Riverside land partnership headed by Juanita St. John, the mayor turned to Abraham Spiegel and obtained a $50,000 loan from Columbia Savings & Loan Assn. with Spiegel’s help, according to the city attorney’s report issued Wednesday.

The loan was among a number of favors exchanged over the years between the mayor’s office and Spiegel, the founder and vice chairman of Columbia. On three other occasions, Bradley’s aides helped Spiegel move his development projects through the city bureaucracy, documents show.

After investigating the circumstances surrounding the loan and the development projects, City Atty. James K. Hahn found no evidence of any wrongdoing by Bradley or Spiegel, a longtime friend and political supporter of the mayor.

In his report, Hahn disclosed that Spiegel on numerous occasions contacted Frances Savitch, a former longtime aide to Bradley now employed as a City Hall lobbyist, to help his development projects get city approval.

While Spiegel “had a significant interest in each of the properties and at various times communicated with mayoral aides about these properties in relation to city departments,� the city attorney found no evidence that Bradley took any action or attempted to influence a government decision on behalf of Spiegel, the report said.

Two of the three projects mentioned in the documents eventually were exempted by Bradley-appointed commissioners from potentially costly restrictions imposed under Proposition U, the city’s 1986 growth-control initiative. Faced with community opposition, Spiegel last year gave up on the third project, opting to sell the property before he developed it.

Spiegel, 82, who recently turned over the post of chairman at Columbia Savings to his son, has been described as Bradley’s “point man� in the Jewish community, where the mayor derives much of his political and fund-raising support.

Spiegel and his son, Thomas, were among the few witnesses who refused to be interviewed by the city attorney’s office. The Spiegels declined to comment Wednesday.

“No one here has seen (the city attorney’s report) and it would be totally inappropriate to comment on something we have not seen,� Columbia spokeswoman Lenore Hatch said.

In his report, Hahn noted the close friendship between Bradley and Spiegel. He wrote that “a further indication of Spiegel’s relationship with the mayor� is that Spiegel sought the mayor’s advice on appointing a new director for Columbia.

Bradley told investigators in interviews that Spiegel came to him about a decade ago saying he was “looking for a black to serve� on Columbia’s board of directors and asking whether the mayor could recommend anyone from his staff.

Bradley told investigators that he recommended his longtime assistant, William Elkins, but that he did not encourage Elkins to accept the job.

“No, (Elkins) simply went, talked with Mr. Spiegel and did agree to serve on the board,� Bradley said.

But Elkins gave investigators a different version.

“I received a call from the mayor saying that Abe Spiegel wanted a black on his board and asked him to recommend some appropriate person. Tom said, ‘Bill, I think it would be good experience for you and you ought to take a look at it.’ And my response was that, ‘Tom, you gotta be out of your mind.’ �

Elkins did not elaborate any further on the transcript and was not available for comment Wednesday. He joined Columbia and continues to serve as a director of the thrift today.

Asked Wednesday if he knew what Elkins was referring to, Bradley said, “I don’t. I’m not out of my mind.�

Hahn’s report focused on the mayor’s alleged conflicts of interest for serving as a paid adviser to Far East National Bank and Valley Federal Savings & Loan Assn.

Elkins was one of the founding members of the Task Force for Africa/Los Angeles Relations, the controversial organization headed by Juanita St. John, a business partner of the mayor. The Los Angeles Police Department is investigating St. John for possible misuse of task force funds, and she faces criminal charges for failing to comply with a subpoena for financial records. The city controller’s audit concluded recently that she owes the city more than $260,000.

St. John and Bradley were among 16 investors in Kathy St. John I and II, a Riverside real estate partnership named after St. John’s daughter, who is a member of the mayor’s staff. Four years after the partnership was formed, the investors needed a balloon payment of between $45,000 and $50,000.

So Bradley turned to Abraham Spiegel.

“I talked with Abe Spiegel, who was chairman of the board of the bank, and told him that we were looking for a loan in order to pay off this balloon payment,� Bradley told investigators. “And he said, ‘Well, send something over and have them meet with my real estate people and we’ll see what we can do.�

Bradley said he directed St. John to Columbia to meet with Spiegel, and they worked out a loan agreement. Bradley said he could not recall the interest rate or whether the partners paid any points on the loan.

Several months later, Spiegel began contacting the mayor’s office for help with three projects: the 137-acre Carey Ranch development in Sylmar, a four-story office building in the Fairfax area, and an apartment building with ground-floor shops on Beverly Boulevard near the Pan Pacific Auditorium.

Records show that Spiegel relied on Savitch to open doors to various city departments on the three projects in the same way other builders depend on paid lobbyists and consultants.

“I would very much appreciate any help you can give me to cut through this bureaucratic red tape,� Spiegel wrote Savitch in one case. He ended the letter: “With Best Personal Regards, Abe.�

Times staff writers Dean Murphy and Judy Pasternak contributed to this story.