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State Opens 2nd Probe of Campbell Aide

September 07, 1989|RALPH FRAMMOLINO | Times Staff Writer

SACRAMENTO — The Fair Political Practices Commission is investigating whether the top aide to state Sen. William Campbell (R-Hacienda Heights) improperly disclosed a $20,000 loan--apparently made at a below-market interest rate--from a City of Industry firm that has been a political contributor to his boss.

The state political watchdog agency investigation of Campbell aide Jerome M. Haleva comes less than a month after The Times disclosed that Haleva intervened on behalf of the firm, United Packaging Corp., with state contract officials last year.

"The issue was raised, and we will review something if it appears to merit review," commission spokeswoman Sandra Michioku said Tuesday in confirming the inquiry.

Haleva placed a telephone call to John S. Babich, deputy director of the state Office of Procurement, in June, 1988, as United Packaging faced disqualification on a highly competitive $1.6-million contract to supply garbage bags to state agencies, public records show. United Packaging was the lowest bidder, but it would have been unable to provide the bags within six weeks of each order, as contract officials had specified.

After the call, procurement officials rewrote the bid specifications to allow for a 12-week delivery time, and United Packaging won the state's business, public records show.

The call from Haleva came 16 months after the company and its president, Frank Eugene Raper, had given Haleva a $20,000 loan at 8% interest--2% to 3% lower than what banks were offering the general public at the time. The loan, secured by a second trust deed against Haleva's home, was granted in February, 1987, and was either repaid or forgiven in early June, 1987, records show.

Such a discount on a loan is generally considered a gift that therefore would be required to be disclosed on the yearly statements of economic interest required of politicians and their staff members. Haleva did disclose the loan in 1987, but he did not report having received a benefit in the below-market interest rate, public records show.

Without discussing specifics, commission spokeswoman Michioku said the agency has the authority to investigate the possibility of a conflict of interest and failure to disclose financial dealings by legislative staff members such as Haleva.

Michioku also said the loan inquiry is the commission's second to involve Haleva, whose annual salary is more than $90,000 and who is widely known for his political acumen.

The first investigation, which is continuing, began earlier this summer after newspaper reports disclosed that Haleva and Campbell had failed to report receiving free use of a car and driver during the Republican National Convention in 1988.

The car, a Lincoln Continental, was provided by Asbestos Environmental Controls, a New Orleans firm that had sought Haleva's help when it encountered difficulties on a state contract last year.

The firm had donated $27,000 to Campbell campaign funds during 1987 and 1988. It faced disqualification as an asbestos consulting firm because it had failed to properly submit certification papers to state officials. Haleva called the state architect's office and got a delay that allowed the company to file its certification and therefore retain more than $800,000 in state business.

After the newspaper articles on the matter appeared, Haleva and Campbell amended their disclosure forms to report receiving $761 in transportation from the company.

State records show that Raper has contributed $3,500 to Campbell since 1985 and that United Packaging gave Campbell a $100,000 campaign loan in October, 1986. The loan was made on Oct. 7 and repaid two weeks later with $349 in interest, documents show.

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