Ethics Report Blames Hahn for Misconduct : Investigation: Commission chief says prosecutor had to be aware of political activity allegedly going on in his office. City attorney, who is up for reelection, denies all charges.

The president of the Los Angeles Ethics Commission said Saturday that City Atty. James Hahn “had to be aware” of alleged improper political activity by his employees because “it was all happening right outside his door.”

Formally releasing a report on his agency’s first major City Hall investigation, Commission President Dennis Curtis suggested for the first time that Hahn bore personal responsibility for what the agency contends was a pattern of misconduct by a top aide and other employees.

“In our view, there are violations of the (state) law that prohibit doing work on city time for non-city purposes,” Curtis said at a news conference. Hahn’s office had “a group of employees who, during the regular workday, used city offices and equipment for partisan political purposes to the benefit of national, state and local Democratic candidates and officeholders.”

“These were not limited, isolated events,” Curtis added, referring to 57-page commission report that paints a portrait of Hahn’s City Hall suite as a hub of private political activity.

Hahn, who is up for reelection in three weeks, strongly denied Curtis’ allegations. He noted that a related eight-month district attorney’s office investigation found no impropriety or illegal activity in the city attorney’s office. “I reject the conclusions, unequivocally, of the Ethics Commission,” Hahn said Saturday. “Two top prosecutors in the D.A.’s office looked at the same evidence” and found nothing.

“They’re merely second-guessing, as amateurs, professional prosecutors.”

Despite the commission’s findings, Curtis said, no further legal action is planned. That is partly because the commission has not been given independent authority to hire a special prosecutor, he said, and partly because the district attorney’s office has rejected the case.

“We disagree with that conclusion,” Curtis said. “We’re putting the information out there and letting the public decide.”

Among other things, the report says a central figure in the investigation, Hahn’s former Chief Administrative Officer Charles Fuentes, received 800 City Hall phone calls in 1990 and 1991 from Democratic political figures and consultants. Fuentes was vice chairman of the state Democratic Party at the time.

A large quantity of political material was found in Fuentes’ office during an unprecedented December, 1991, raid on Hahn’s office, including campaign records and an office lease for one of Hahn’s political committees, the report said. In another case, he billed the city for pay while attending a state Democratic Party function.

Evidence indicated that other employees who worked with Fuentes performed private political work on city time for various candidates, including one computer specialist who allegedly received government pay while engaged in a profit-making business, the report said.

“It isn’t any one specific incident,” said Benjamin Bycel, the ethics agency’s executive director. “It’s the totality and impact of everything that occurred over a two-year period.”

Fuentes has denied wrongdoing, and his attorney said the commission was wasting taxpayers’ money trying to justify its first high-profile investigation. The district attorney’s office concluded that Fuentes had “reasonably segregated his political activity from his official duties.”

But the commission report, culled largely form the district attorney’s investigation files, cites numerous examples of key questions not being pursued--including how Fuentes’ political phone calls related to city business and why campaign-related records and materials were in the city attorney’s offices.

Curtis also said that certain evidence had been lost by the district attorney’s office--namely computer information seized during the 1991 raid on Hahn’s office.

District attorney’s office spokeswoman Sandi Gibbons defended her office’s investigation as being exhaustive, saying that it involved top prosecutors. She said she could not comment on specifics of the inquiry, but stressed that the Ethics Commission, like the district attorney’s office, was recommending no criminal prosecutions.

Hahn said he “knew people in my office were involved in politics,” but there is no evidence those activities took place on city time. As for the many political material found in the raid, he said: “People have a right to have stuff in their office that isn’t city materials.”

“The D.A. looked at all of this,” he said, adding that the investigation grew out complaints by disgruntled employees “with axes to grind.”

Hahn said he does not expect to take disciplinary action against aides or seek reimbursement for city time, as recommended by the Ethics Commission. “I believe the matter is closed,” he said, adding that he did not expect the controversy to affect his reelection chances.

Meanwhile, it was learned that Hahn’s office has requested a district attorney’s office investigation of Hahn’s opponent in the April primary, Deputy City Atty. Michael Guarino. At issue is nearly $2,000 in phone calls made over three years on non-city phones but billed to city numbers. Hahn said he discovered the questionable billings, most of which were to Guarino’s fiancee, during a review of phone records amid the Ethics Commission investigation.

Guarino may have entered the city attorney’s race, Hahn said, as an “inoculation strategy” that would make any effort to investigate the calls appear political.

Guarino said that charge was “patently absurd.” The calls were made to a former city attorney officer who was a resource person, he said. Although he had a personal relationship with the attorney, he said, the calls billed to the city related to cases he was working on.

Gibbons of the district attorney’s office said she had no information on the status of Hahn’s referral.