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CALIFORNIA ELECTIONS : GOP Foe in 34th Seeks Federal Probe in 2nd Try Against Torres

November 03, 1988|MARY LOU FULTON | Times Staff Writer

Before the 1986 election, Republican Charles House spent much of his time knocking on doors in the 34th Congressional District, talking to voters about bread-and-butter issues such as crime, drug abuse and education. That approach got him less than 40% of the vote, as incumbent Rep. Esteban E. Torres strengthened his grip on the heavily Democratic district.

House is again running against Torres and is still going door to door. But House thought he needed to attack Torres in another way, a way that would cast doubt upon the congressman's political integrity.

So after months of research by his campaign staff, House has asked for a federal investigation of Torres, alleging that he misstated his educational background and illegally profited from the settlement of a loan backed by the Small Business Administration.

Torres denies the charges and has threatened a libel suit against House for "knowingly peddling false information."

This harsh exchange in the campaign's closing weeks has been the sole controversy in the race to represent the 34th District, which stretches from La Puente in the San Gabriel Valley to Norwalk in Southeast Los Angeles County. The San Gabriel Valley communities in the district are Baldwin Park, Bassett, City of Industry, South El Monte, West Covina and parts of Hacienda Heights and Rowland Heights.

Torres, 58, has represented the largely blue-collar district since it was created six years ago through reapportionment after the 1980 census. Torres--his campaign coffers overflowing with thousands of dollars from banks, land developers and unions--has not faced a serious electoral challenge since the 1982 Democratic primary. Torres has more than $180,000 left to spend on his campaign, about five times as much as House.

House, 52, a Los Angeles County sheriff's deputy for 22 years, said he converted from the Democratic to the Republican Party about 20 years ago because he believed that blacks were being manipulated by government social programs. House, who is black, said he prefers a flat income tax and private-sector involvement in welfare and jobs programs, and is a conservative on defense issues.

Low-Profile Campaign

Torres has run a low-profile campaign, with a few cable television advertisements and one mailing of 75,000 brochures planned for this week. The incumbent does not campaign door to door but gives speeches at local schools, ribbon-cuttings, parades and other community events. Torres' campaign is being managed by his daughter, Carmen Garcia, who has been paid about $15,000 in consultant's fees.

House has $37,000 left in his campaign fund after having spent about $80,000 on mailers, including a hit piece recently in which the Republican outlined his allegations about how Torres obtained and settled a $150,000 loan to his consulting business.

In 1981, before Torres was elected to Congress, he started the business with the help of a $150,000 loan from a Los Angeles investment company that was a subsidiary of The East Los Angeles Community Union, documents show. Torres was the founder of TELACU, an anti-poverty agency financed almost entirely by federal money.

In a recent interview, Torres said he incorporated his business, International Enterprise and Development Co., in California. However, the secretary of state's office has no record of the company ever being incorporated in California, said Connie Christensen, a supervisor in the state's corporate status office.

By the end of 1981, Torres said his company folded, but the loan was still outstanding. The loan was from federal funds earmarked for minority-owned businesses, and House said "people have a right to know" how Torres spent the money.

'None of His Business'

"It's none of his business (what I did with the money)," Torres said in an interview. "It's not taxpayer money. It's an investment company that gave me a loan."

Torres, elected to Congress in 1982, said he moved to settle his loan in 1985 by selling a piece of vacant property in San Bernardino County. The investment company agreed to forgive $85,000 of the loan, which House alleges is a violation of a federal law that prevents public officials from using their influence for profit.

Torres sold the property, then valued on county tax rolls at $8,000, to a campaign contributor for $64,700, according to the San Bernardino County assessor's office. The contributor was politically active Encino lawyer Andy Camacho.

Torres said there was nothing unethical about the real estate transaction. "He's an individual, he's an investor, he's a buyer," Torres said of Camacho, who declined comment on the purchase.

After the sale to Camacho, the still-vacant property was reassessed at $27,000, according to county records. When asked about the discrepancy between the value and the selling price of the property, Torres replied: "I have no comment on that. . . . Let the record show whatever is there.

"It's all legal," Torres added. "Evidently he can't find what he's looking for, and he's fishing."

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