LABOR CHIEF STEPS DOWN LUDLOW SUBJECT OF FEDERAL PROBE.

Byline: Rick Orlov Staff Writer

Facing possible criminal charges, Martin Ludlow stepped down Tuesday as head of the Los Angeles County Federation of Labor, acknowledging he made mistakes in his 2003 race for City Council but defiantly vowing to continue to speak out on issues.

Ludlow's decision marks the second time in a year the powerful county union has been left without a leader. His announcement came after weeks of speculation that federal prosecutors seek to charge Ludlow with violating city campaign laws in connection with a union telephone-bank operation during his closely contested council race.

The phone bank, carried out in mobile vans across his central Los Angeles district, was said to be operated by Service Employees International Union, Local 99, a union representing nonteaching personnel at the Los Angeles Unified School District.

``It is difficult to stand before you at this moment of great personal pain,'' Ludlow told a packed auditorium at a news conference at the federation's headquarters in downtown Los Angeles.

``Dr. Martin Luther King Jr. said it is a measure of a man not where he stands in moments of comfort, but where he stands in times of challenge and controversy.''

As Ludlow spoke, union members, family and friends chanted and applauded him.

Ludlow said he had hoped to be able to resolve the issue with the city Ethics Commission, but the matter was escalated to a full investigation by federal and county authorities.

Officials in the offices of the U.S. attorney and district attorney said Tuesday that they would have no comment on the case or the impact of Ludlow's decision.

Ludlow reportedly has been offered a plea bargain in which he would pay a fine of $181,000 and restitution of $81,000. The deal also reportedly would ban him from holding a union executive post or elective position for 10 years.

The 41-year-old Ludlow has been on a political fast track since his days as political director at the county labor federation. He was named the union's secretary-treasurer last year after the sudden death of longtime leader Miguel Contreras. He was paid $140,000 a year in the post.

An emotional Ludlow, pumping his fist in the air, said Tuesday he was accepting full responsibility for what happened during his City Council campaign and that he felt he had to quit the labor post to deal with the legal matters.

The announcement followed what those close to him described as a tortured weekend during which he talked with his family - his wife, Kim, and her father, Bishop Charles Blake - as well as longtime political allies.

Prior to his official announcement Tuesday, Ludlow met privately with about 40 labor, community and religious leaders in a small conference room.

``It was a sad moment for all of us,'' said the Rev. Louis Logan, who also serves on the city's Board of Neighborhood Commissions. ``What Martin needs now is our support. This is a setback for him and for the labor movement, but he is the type of person who can turn a negative into a positive.''

Logan said he also is suspicious of how the case is being prosecuted.

``I think that whoever is behind this, whatever entity it is, has swirled the beehive,'' Logan said. ``There are many of us who believe this is being done by those who want to undermine the labor movement.''

Assembly Speaker Fabian Nuez, D-Los Angeles, a close Ludlow ally, issued a statement of support, but also questioned the case.

``Throughout his public career, (Ludlow) conducted himself with integrity and honesty,'' Nuez said. ``While I fear he may have been subject to overzealous prosecutors, I respect the decision he has made to accept responsibility.''

Ludlow's closest ally, Mayor Antonio Villaraigosa, was on a prearranged lobbying trip Tuesday in Sacramento and told reporters he had expected Ludlow to take responsibility if there was any wrongdoing.

``I said on Friday that if Mr. Ludlow made a mistake ... he would take full responsibility,'' Villaraigosa said. ``He had demonstrated that he understands there are consequences that come in certain situations. I am proud of what he has done.''

Ludlow was effusive in his praise of Villaraigosa, for whom he worked before being elected to the council.

``The city of Los Angeles is strong,'' Ludlow said. ``And it has a great future under a man who has the potential to become the greatest president in American history. This is a man who took his hits - but rose to become mayor of the nation's second-largest city. I love this man dearly. He is my hermano grande.''

Jack Kyser, chief economist for the Los Angeles Economic Development Corp., said Ludlow's decision to step down raises a number of questions.

``I think it leaves labor in an awkward situation - as well as the mayor,'' Kyser said. ``This is the second labor leader in less than a year and his leaving under a cloud will only help those who oppose the labor movement.

``And I think his departure will have a ripple effect, particularly for the mayor. The mayor has been able to take on the school board and other issues because he had Martin Ludlow at the county fed backing him up. A lot will depend on who the unions pick to be their next leader.''

Rick Icaza, president of the county federation as well as of United Food and Commercial Workers, Local 770, said a decision on an interim secretary-treasurer is expected to be made Thursday.

A final decision will come after all of the federation's member unions are able to vote on a candidate.

Several potential candidates already have been discussed, with most attention focusing on Kent Wong, executive director of the University of California, Los Angeles, Labor Institute.

Ludlow had been a unifying force at the union umbrella organization representing some 600,000 workers, keeping the coalition together to fight proposals from Gov. Arnold Schwarzenegger that would have limited unions' ability to raise money for political campaigns.

His leadership came against a backdrop of national political battles over the AFL-CIO's power, with members of SEIU and Unite HERE, representing hotel and restaurant workers, voting to pull out of the national group.

Villaraigosa said selecting a successor will be difficult for union leaders.

``Clearly, they have lost a dynamic leader in Ludlow,'' Villaraigosa said. ``He will be difficult to replace. But, as in the case with Miguel Contreras, I am confident the union leaders will find someone to take over who can do the job.''

Ludlow offered his own assessment, saying the labor movement is bigger than one person.

``The labor movement will continue to be strong in Los Angeles,'' Ludlow said. ``This is a movement that created the living-wage ordinance. This is a movement that kept the middle class out of poverty. This is a movement that built an unprecedented number of schools and fought for justice. Those fights were the right fights and they will continue.''

Ludlow, who declined to answer any questions after making his remarks, gave no indication on his plans other than to say he expects to remain active in the city, particularly working to fight youth gangs.

As a councilman, Ludlow had proposed creating a separate city department to deal with gangs and coordinate related programs. The proposal is under review.

Staff Writer Harrison Sheppard contributed to this story.

Rick Orlov, [phone]

rick.orlov(at)dailynews.com

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Photo:

Martin Ludlow is surrounded by family and supporters as he announces his resignation as head of the county labor federation at a news conference.

Hans Gutknecht/Staff Photographer