DINNER FOR HAHN ASSAILED : FUND-RAISER HOST GOT CITY CONTRACT.

Byline: Patrick McGreevy Daily News Staff Writer

City Attorney James Hahn has come under fire from challenger Ted Stein for giving a $300,000 city contract to a private law firm whose partners are hosting a fund-raising dinner for him tonight at the Biltmore Hotel.

Stein charged Wednesday that Hahn has a conflict of interest in accepting fund-raising help from principals in the law firm.

``I think the conflict is he should not be giving contracts to people doing fund raising for him,'' Stein said. ``Jimmy has been compromised. Instead of going out and finding the best outside law firm for a job, he looks for the best law firm to raise money for him. He can't be objective.''

The law firm of Brand Farrar Dziubla Frielich and Kolstad was hand-picked by Hahn in September to work on the deal the city is negotiating with the owners of the Los Angeles Kings hockey team for a $240 million sports arena complex downtown.

The law firm first became involved in Hahn's re-election campaign in June, when it provided $733 worth of refreshments for a fund-raiser while attorneys in the law firm contributed $3,800 to Hahn's campaign.

Law firm partner David Farrar has stayed involved in raising funds for Hahn. On Jan. 16, Farrar sent a letter to other private attorneys urging them to attend a fund-raiser Farrar would be co-hosting for Hahn at the Biltmore tonight.

``I sincerely hope you can join Supervisor Yvonne Burke, nine L.A. city councilmen and me in a dinner honoring Jim,'' Farrar says in the letter. ``If you can't join us for dinner, please consider a significant contribution.''

As a postscript, on the bottom of one letter obtained by the Daily News, Farrar asks: ``Can I count on you for $250?''

Hahn refused to be interviewed for this story, but campaign spokesman Matt Middlebrook said the city attorney has not acted improperly.

``There is not a conflict because Jim handles these contracts ethically,'' Middlebrook said. ``James Hahn handles all contracts exactly the same, based on its merits and what's appropriate.''

Middlebrook dismissed Stein's criticism, noting that Stein is under subpoena to testify to federal investigators looking into the activities of former Deputy Attorney General Webster Hubbell, a figure in the Whitewater investigation.

When Stein was president of the city Airport Commission, he authorized a contract with Hubbell for almost $25,000 to lobby the Clinton administration on behalf of the Airports Department. There have been subsequent allegations that Hubbell made only a few phone calls to earn the money.

``We're not going to take any advice on a contract from Ted Stein, when as president of the Airport Commission he gave a no-work lobbying contract to Web Hubbell,'' Middlebrook said.

Hahn's heavy reliance on city contractors to help him raise campaign funds is not new.

The Daily News reported last February that his campaign was getting off the ground with the help of three other law firms that have received millions of dollars from contracts with Hahn's office.

Although Hahn refused to be interviewed for this story, he told the Daily News last February that there is no relationship between who gets contracts from his office and who contributes to his campaign.

``There have been plenty of people who have contributed to my campaign who have bid on city contracts and have not gotten any, and there's been plenty of people who have won city contracts who have never contributed to my campaign, so there is really no relationship at all,'' Hahn said last year.

City records show that Hahn went to the City Council in September for authority to give a $150,000 contract to the Brand Farrar law firm ``to assist in the negotiation and preparation of'' a memorandum of understanding between the city and the developers of a downtown sports arena.

The law firm was to help with negotiations, which are still under way, with Kings owners Edward Roski and Philip Anschutz, who have proposed building a 20,000-seat sports arena on the site of North Hall at the downtown Convention Center.

The City Attorney's Office said it lacked expertise in real-estate development issues and asked to hire an outside firm.

Hahn picked the law firm for the job without going through a formal process of issuing a request for proposals from all interested in submitting competitive bids, officials said.

This is allowed under city laws when a contract is for services, rather than a capital project.

The contract was put out without a formal process because the arena issue was unfolding quickly last fall and the developers had originally put an Oct. 15 deadline on getting a deal, Deputy City Attorney Patricia Tubert said Wednesday.

She said the City Attorney's Office informally invited four firms with development-deal experience to be interviewed by a panel that Hahn convened, including senior attorneys from his office. Tubert was on the panel. Of the three firms not chosen, she said, two were contributors to Hahn's campaign.

Tubert said the Brand Farrar firm was picked because of its experience and price.

``They stood out because they had just negotiated the MTA building development agreement, and their prices were the most reasonable,'' Tubert said.

She said the firm offered to have two of its attorneys work on the arena deal for $195 per hour, and the next best price from another firm was $250 an hour.

The original $150,000 contract proved to be insufficient, however, as negotiations bogged down. Negotiations are at least two months behind schedule.

As a result, Hahn went back to the City Council on Dec. 4 and received authority to double the size of the contract to $300,000, Tubert said.