LOS ANGELES -- The following is a transcript of a report broadcast Tuesday, Oct. 3, 2006 on the NBC4 News at 6 p.m.

ANCHOR INTRO: Allegations of a sex scandal involving favors for big city contracts. Former city leaders are implicated, and the Channel 4 News is breaking the story tonight.

Video: Part 1 | Video: Part 2

ANA GARCIA: The story that I'm about to report is the stuff that Hollywood dramas are made of. Sex in exchange for city contracts – that's what is alleged in this grand jury testimony that was secret until this morning because Channel 4 News sent attorneys into court to argue that the public has a right to know what's going on at City Hall. So, our efforts paid off, and as a result of that we can bring you this story first and exclusively.

(VIDEO SHOW STACKS OF DOCUMENTS)

This stack of grand jury testimony tells a story of how sex was allegedly used in exchange for obtaining lucrative city contracts.

LOS ANGELES CITY COUNCIL MEMBER JACK WEISS. If this is true, it is beyond what any of us had expected.

ANA GARCIA: The central figures are former airport commissioner Leland Wong and former deputy mayor in charge of the airport Troy Edwards. Both worked in the James Hahn administration and both resigned two years ago, shortly after Channel 4 began investigating allegations of pay-to-play City Hall.

Leland Wong, who served as a commissioner at the port, airport and DWP under three different mayors, was indicted in August for allegedly trying to help get a shipping contract for the Evergreen Group.

PROSECUTOR MAX HUNTSMAN: The most serious charge is bribery. He's alleged to have taken $100,000 in payments that he kept secret.

ANA GARCIA: The prosecutor says $100,000 was placed in a Hong Kong account while Wong was an appointed and unpaid airport commissioner. Wong also had a day job as director of government relations for Kaiser-Permanente.

MAX HUNTSMAN: He wasn't really working on behalf of Kaiser. He was working on behalf of himself.

ANA GARCIA: And apparently helping former Deputy Mayor Troy Edwards to get $18,000 worth of massages and sex at the Bonaventure Hotel Spa-Downtown, all of which are detailed in the grand jury testimony.

MAX HUNTSMAN: The massages were paid for with Kaiser money.

JACK WEISS: What you want is people who have the moral fortitude to resist the many offers that come their way when they have these positions. That's what's so important, and that is clearly what was so lacking here.

ANA GARCIA: Kaiser says they alerted the authorities about the misuse of funds. The Bonaventure Spa says they are a legitimate operation and they do not have prostitution.

Troy Edwards' attorney says that this is an attempt to be lurid without substance. Leland Wong's attorney said in a statement that "Leland Wong has nothing to do with Troy Edwards getting sexual favors during any massage… The evidence… will show that Leland Wong operated lawfully at all times – both as an employee of Kaiser-Permanente and as a public servant."

The district attorney says that these alleged acts took place between 2001 and 2002 under the administration of Mayor James Hahn. Now, Mayor Hahn was called to testify. He denied any knowledge of this. We tried to call him today. Our calls were not returned. By the way, the city never approved this contract.