In a large saucepan, saute the onion and red pepper in olive oil for 3 minutes to soften. Add the garlic and saute an additional 2 minutes. Add both types of mushrooms and saute for 5 additional minutes. Add the crushed tomatoes, bay leaf, salt, pepper, and red pepper flakes, and stir well to combine. Cover, reduce the heat to low, and simmer for 20-25 minutes or until the mushrooms are tender. Add the basil and parsley and simmer an additional 5 minutes. Taste and add additional salt and pepper, if needed. Serve as a sauce for pasta, polenta, grains, or main dishes.
Variation: add a little red wine to the simmering sauce, if desired.
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