FBI Subpoenas Records in New Alatorre Probe

The FBI’s public corruption squad has launched an investigation into the financial dealings of Los Angeles Councilman Richard Alatorre, whose office was ordered late Tuesday to surrender records, The Times has learned.

Alatorre--already the subject of a wide-ranging probe by local authorities--was said to be on vacation. But a top staff member confirmed that a federal agent had served a subpoena for documents maintained at his office. He said the councilman’s office would comply.

The veteran Eastside councilman has issued a general denial of any wrongdoing but has repeatedly refused to answer specific questions about his personal financial affairs.

The FBI agents and federal prosecutors assigned to the Alatorre investigation are part of a Justice Department team entrusted with the sensitive and politically volatile task of examining allegations of malfeasance against elected and appointed public officials.

Their investigation was initiated last week after disclosures in The Times that Alatorre bought a home with the assistance of associates of a businessman with a $91-million housing deal simultaneously being pushed by the councilman at City Hall.

The probe gained momentum Tuesday after the newspaper quoted Alatorre’s former executive secretary, Linda M. Ward, as saying her boss routinely showed up with thousands of dollars in cash to pay personal bills after meetings with people who have had business dealings with the city.

The allegations that Alatorre may have accepted unreported cash from individuals or entities with government business “really got our attention,” said one source close to the investigation. “The barn door’s open,” he said, for full federal attention.

Although spokesmen for the FBI and the U.S. attorney’s office declined comment, other sources disclosed that “numerous” federal grand jury subpoenas have been served in recent days during the swiftly moving investigation. Late Tuesday, even more subpoenas for records and testimony were being written, the sources said.

Among the first to be summoned was property investor Han Huskey.

Huskey was quoted in a Times article last week acknowledging that he wrote a $2,800 check to Alatorre as part of a bogus real estate transaction to help the councilman buy his new Eagle Rock home. The payment, Huskey said, was part of a sham lease on Alatorre’s condo to show that it was generating income for the lawmaker, increasing his chances of landing a loan for a new home.

That effort, Huskey told The Times, was set in motion by a businessman who stood to reap millions from a city-backed purchase and overhaul of a large apartment complex intended for low-income residents. The businessman, Samuel S. Mevorach, has denied wrongdoing.

FBI agents appeared on Huskey’s doorstep--subpoena in hand--the morning the story was published, according to a knowledgeable source. Huskey was ordered to appear before a grand jury early next month and to bring an assortment of documents. Huskey declined comment Tuesday.

Reaction to allegations that Alatorre received cash was largely muted at City Hall, where many officials were on vacation.

Mayor Richard Riordan, who has been a steady ally of Alatorre, and City Council President John Ferraro declined to comment on the councilman’s problems.

But Councilman Joel Wachs expressed concern. “If half of it is true, he’s in deep, deep trouble,” he said, adding that a thorough investigation is needed. “This is a very dark cloud over his reputation, and frankly it impugns the integrity of the whole council.”

The FBI investigation represents yet another setback for Alatorre, one of the region’s most imposing elected officials, with sway at City Hall and with the Metropolitan Transportation Authority, where he sits on the governing board. He has cultivated a vast network of business and political allies throughout Southern California.

In the process, he has been dogged by controversies ranging from campaign finance irregularities to conflicts of interest.

Currently, Alatorre is under intense scrutiny from MTA investigators, who have subpoenaed his personal banking records as part of a separate investigation.

Those investigators, also working with the U.S. attorney’s office, are examining whether Alatorre received improper income from contractors and others doing business with the transit agency.

Earlier this year, the lawmaker agreed to pay $8,000 in state and local penalties for failing to fully disclose income from an event-planning firm founded by his wife and for improperly intervening on behalf of the company with city regulators.

Times staff writers Ted Rohrlich in Los Angeles and Ronald J. Ostrow in Washington contributed to this article.

* THE SPIN: Councilman Richard Alatorre’s politics involve relationships. B1