Not this time Teflon Don, not this time. Maybe this is what Arnold meant when he said "clean house."
Posted on 12/29/2004 7:34:34 AM PST by SmithL
SACRAMENTO - The federal corruption probe of state Sen. Don Perata bubbles with the tension of a television drama.
The central character is a savvy 59-year-old East Bay Democrat with a penchant for double-breasted suits who relishes comparisons to a Mafia boss. A former high school civics teacher and the son of an Italian-American dairyman, Perata rose through the Byzantine world of Oakland politics to become leader of the state Senate.
But now a federal investigation into his dealings with relatives and close associates threatens to undermine everything Perata has worked for. The case has the makings of a "Law and Order" episode, including a salacious beginning in which the jilted lover of an ex-Perata aide says the FBI has been tipped off about a kickback scheme.
The accusation took on new life when federal investigators began issuing subpoenas last month naming Perata and his friends and family. In the latest turn, FBI agents searched the homes of the senator and his son Dec. 15, hauling away computer files and papers from both locations.
In this unfolding mystery, it is unclear who the bad guy is or even if Perata crossed the legal line. Is the senator a corrupt politician or the victim of political retribution from federal investigators in a Republican administration?
A Knight Ridder analysis of public documents, subpoenas and contracts shows Perata is supported by an intricate web of business and fund-raising relationships. Such a network is not uncommon for successful politicians.
But some of the arrangements raise ethical and legal questions, according to two former federal prosecutors, a retired FBI agent and a campaign finance expert. The four are not involved with the federal inquiry but reviewed information about the case for Knight Ridder.
"The law says you cannot use campaign funds for personal use," said Bob Stern, who helped write California's Political Reform Act of 1974. "The question is: Were the transactions designed to get around the letter of the law?"
The money flow
Here is how some of the money flowed: Contributors donated to the senator's campaign committees or side committees controlled by his friends. Those committees then paid the senator's relatives and close associates for campaign work. Some of those recipients, in turn, paid Perata for rent or consulting services.
For example, the direct mail firm run by his son, Nick Perata, received hundreds of thousands of dollars in work from the senator's campaign committee. And Nick paid his father rent for office space and a home in Alameda that the senator owned.
Similarly, two political consulting businesses run by longtime Perata friend and erstwhile college roommate Timothy Staples received contracts from committees financed by the senator's campaign donors. And Staples paid Perata more than $200,000 for consulting services in 2002 and 2003.
One large contributor was Mercury General Corp., an insurance company for which Perata carried legislation. Mercury donated $135,000 to three campaign committees that in turn paid Perata's primary campaign manager Sandra Polka and Ascendent Solutions, a company run by Staples.
Critics accuse Perata of routing campaign donations through committees, relatives and friends directly into his own pocket. Perata has denied wrongdoing, and last spring he said he severed his business relationship with Staples.
"The truth is it's not illegal, improper or even unusual to have a private consulting business at the time you are serving as a legislator," said Jason Kinney, a spokesman for Perata.
Since news of the probe broke last month, Perata vowed to cooperate with investigators but has said little else about it. Meanwhile, his attorney George O'Connell has accused "a Republican-appointed prosecutor (of) abusing and misusing the legal system in order to inflict maximum partisan political damage."
What's legal, what's not
Political undercurrents aside, public corruption cases tend to have one underlying theme, said Bill Portanova, a defense attorney who worked as a federal prosecutor in Sacramento from 1991-97.
The cases are "all about quid pro quo," Portanova said. "When people give to a candidate, clearly that's a quid. It's legal. When a politician gives something in return, that's the quo."
To pay a politician specifically for government approval is bribery, and for a lawmaker to demand payment or a favor in exchange for a government action is extortion. In the world of California politics, however, the unspoken rule is lawmakers take care of their large campaign contributors. If actions are not directly linked to payments, the conduct is OK.
"Campaign money is legal," Stern said. "It's completely appropriate for public officials to raise large sums of money and turn around the next day and decide on something affecting the contributor."
It's also common and legal for politicians to hire relatives, as long as the family members are performing services for their paychecks. Likewise, lawmakers are allowed to work outside jobs or run their own businesses while in elected office.
For investigators, the challenge is to track the flow of money and determine whether Perata and his allies sought to skirt the law. Prosecutors and investigators on the case are not talking.
Knight Ridder tried to interview people named on the subpoenas, but they did not return calls or refused to answer questions.
The federal probe is likely exploring whether Perata and his allies disclosed all their income to the Internal Revenue Service, said Jim Wedick, who investigated high-profile public corruption cases for the FBI before becoming a private investigator.
"That's the easiest case to make," Wedick said. "You gather all the documents and see if they match the tax returns."
From there, investigators move to larger questions, such as whether a politician is taking bribes or shaking down special interests for money. Ultimately, federal agents are probably trying to determine whether money was paid to Perata or his network in exchange for government action, the former prosecutors said.
Even if circumstantial evidence points to political corruption, proving a case is often tough, said John Panneton, a defense attorney who left the U.S. Attorney's Sacramento office in 1991 after 16 years with the Department of Justice. A prosecutor must establish criminal intent.
Unless investigators "are able to get testimony from live witnesses who know what the motivations of some of the actors are, it's hard to prove what the intent is," Panneton said.
Enduring controversy
For those who have followed Perata's rise, they marvel at his ability to escape blame and endure controversy, a trademark of his 18-year political career. In the East Bay, it has earned him the nickname "Teflon Don."
Tutored by Los Angeles Rep. Howard Berman, Perata has attempted to replicate the political operations built by other famous California politicians, such as former Assembly Speaker Willie Brown, said Bruce Cain, a UC Berkeley political scientist. The backbone of a political machine is money ... raising it and directing its flow, Cain said.
Another key ingredient is loyalty, something Perata has worked hard to cultivate.
"If you know people are loyal, you can almost forgive anything," Perata said in a recent interview. "It's the only bond we have in this business."
Brown, who weathered similar investigations during his 15-year reign as Assembly leader, said federal agents probably do not have enough evidence to charge Perata with a crime.
"Let me assure you, you wouldn't be reading about it if they had anything," Brown said, alluding to media coverage of the probe. "You'd read about it after they indicted him. They have no case yet."
Portanova, the former federal prosecutor, said he had similar doubts.
"It's almost impossible to make a case in a political environment where people's promises are the capital, and the loyalty it generates is intense," Portanova said. "Because of that, there are no express agreements, no smoking guns, and there is always plausible deniability."
This is not the first time Perata's integrity has come into question, and his wheeling and dealing has long fueled the East Bay rumor mill. But the first hint federal investigators could be on the senator's trail didn't surface until September 2003, when a messy breakup between a prominent businessman and a high-powered Oakland lobbyist produced angry charges and countercharges.
Lily Hu, the lobbyist who once worked for Perata, sought a restraining order against her boyfriend of 20 years, Frank Wishom, a one-time Cal Bear football player who checked himself into a psychiatric ward after the two split up. In court papers, Wishom, 62, said the FBI was investigating her ties to politicians.
Hu's attorney denied it and said her client "is not taking or giving any 'kickbacks.'" But since then, federal agents have put Hu's name on subpoenas and searched her house.
In the first of many made-for-TV plot twists, Wishom died only a few weeks after revealing the investigation. He suffered complications during a leg surgery.
A powerful Bay Area Democrat's political career may soon be terminated. Couldn't happen to a more deserving fellow.
ping
This ah*le is behind a lot of CA's anti gun legislation, yet himself has a CCW. He cites his anti gun statements as the reason he needs to carry a gun - says the gun nuts are out to get him.
Perata supports gun grabs.
If they can get rid of him and Jack Scott before they go federal, I'll really be happy. Almost as much as I'd be if Waxman, DiFi, Boxer, Waxman, Waxman, and Waxman get fired.
(I'll work on Stabmenow and Lenin)
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.