CITY HALL PROBE WIDENS SUBPOENAS TARGET OFFICIALS, RECORDS.

Byline: Rick Orlov and Beth Barrett Staff Writers

A probe into allegations of potential corruption at City Hall widened Thursday with the U.S. Attorney's Office subpoenaing officials and contracting records at three major city departments as part of a federal grand jury investigation, the Daily News learned.

The subpoenas to officials in the Airports, Harbor and Water and Power departments - the city's three proprietary departments dealing with billions of dollars in revenue a year - were for documents and memorandums for contracts awarded by the agencies of more than $100,000, according to documents and sources.

A copy of the subpoena to the Harbor Department obtained by the Daily News sought ``lists, records, memoranda and/or documents indicating any parties'' with business of $100,000 or more from Jan. 1, 1998, to Aug. 1, 2000 - a period that corresponds closely with the time Ted Stein, a San Fernando Valley developer and longtime city commissioner, served as head of the Harbor Commission.

Stein's role as head of the Airport Commission under Mayor James Hahn was among the questions that recently prompted the District Attorney's Office and a county grand jury to open an investigation of possible ``pay-to-play'' contracting practices at City Hall under which contractors are pressured to contribute to political campaigns.

Stein has denied wrongdoing.

A second subpoena to the Department of Water and Power asks for all contracts of $100,000 between Jan. 1, 2000, and the present, according to a copy of the document.

Sources confirmed that a similar subpoena went to the airports department, but did not provide the dates for which the contracts were sought.

The subpoenas seek the total value of the contracts, their projected future value, the number of contract extensions already exercised and the number of extensions permitted under the contract, among other information.

The subpoenas also order the department heads - Larry A. Keller at the port, and David H. Wiggs at the DWP - to appear as the custodians of the records.

The City Attorney's Office, which represents all three agencies, declined comment.

At issue in the county probe is whether Los Angeles World Airports developed a pay-to-play system in which contractors were required to give campaign contributions in order to win contracts, or were penalized if they did not contribute, in violation of any laws.

The inquiries have prompted city officials to look at a ban on fund raising by commissioners.

On Thursday, City Attorney Rocky Delgadillo proposed a law that would make it a misdemeanor for city commissioners to get involved in campaign fund raising.

While releasing a draft ordinance that will be considered by the city Ethics Commission on Tuesday, Delgadillo said he believes the city can regulate commissioners' activities without violating their First Amendment rights.

``The city has a compelling interest in dispelling the public appearance of 'pay-to-play' corruption and the ordinance is narrowly tailored to serve that compelling interest,'' Delgadillo said in a statement.

``This office believes that stopping 'pay-to-play' corruption and rebuilding the public's faith in city government is too important not to act and is worth fighting for in a court of law.''

Violators could be fined up to $5,000 and be removed from their commission seats.

Delgadillo said the city should prohibit commissioners from hosting political fund-raisers, soliciting money from others, providing a list of potential donors to a political committee or allowing their names to be used for endorsements.

Aides to Hahn said he is reviewing Delgadillo's proposal, but would not change his position opposing the ban, although he's said he might not veto a council-passed measure.

Council members support some restrictions, although they disagree on details.

Controller Laura Chick, who called for investigations based on her audit of the airports department, backs the ban.

``We're on a roll,'' Chick said. ``It seems like we have some synergy going. I think this ordinance is absolutely essential to the city's reputation of being the cleanest big city in the nation. It's also important as another step to build trust with the people and voters of this city that you don't have to make a donation in order to win a city contract.''

Councilwoman Wendy Greuel, a reform leader, added: ``It is very clear to me that banning fund raising by commissioners is a no-brainer. I believe it will help us restore integrity and confidence in government.''

Rick Orlov, [phone]

rick.orlov(at)dailynews.com