Sunday, July 27, 2008

Perata probe drags on without charges

It has been 44 months since a federal corruption probe of state Senate President Pro Tem Don Perata became public knowledge, and 43 months since federal agents searched his and his son's Oakland homes.

An unknown number of witnesses have testified before a federal grand jury. Thousands of pages of documents have been gathered under dozens of subpoenas issued to public agencies and private companies.

Perata's legal defense fund has spent about $2 million, much of that either transferred from one of his campaign accounts or given to him by the state Democratic party. Soon after the party gave Perata's legal fund $250,000 in early July, media accounts based on unnamed sources began to speculate that an indictment was imminent.

Almost four years on, some wonder whether it's time for the federal government to fish or cut bait.

"You would think that if they had something, they'd have done something with it years ago, not two months before his term in office ends," said pundit and longtime Democratic Assembly aide Bill Cavala.

Although a Justice Department so heavy politicized by a Republican White House could indict a high-ranking Democrat and leave it for the next administration to sort out, Cavala said, "I don't believe the investigation produced any facts or evidence that would lead to an indictment under normal circumstances."

"It does seem like a long time," said former FBI Supervisory Special Agent Rick Smith, now president Advertisementof a private investigation firm in San Francisco. "They don't want to drop it obviously because they think there's some substance there, and they don't want to indict him without sufficient evidence, so it goes on."

But Smith also noted U.S. Attorney Joseph Russoniello, who just started his term in January, is "a pretty aggressive guy, and he could make a decision." Russoniello, 66, who held the post from 1982 to 1990 and then was in private practice before taking the job again this year, probably doesn't see the post as a career springboard, Smith said: "He's got nothing to lose. "... He's not going to be hesitant to do what he thinks is right."

A recent San Francisco Chronicle report called attention to the relationship between Perata and Dawson Mathis, a former Congressman from Georgia. Perata in 2000 urged the Port of Oakland, the Alameda County Transportation Authority and the City of Alameda to pay Mathis $135,000 to lobby for a road that Perata's friend and major donor, developer Ron Cowan, wanted built to connect Cowan's Harbor Bay Isle development and the Oakland International Airport. Investigators reportedly want to know whether any of that money found its way back into Perata's pocket.

John Burton, who preceded Perata as state Senate President Pro Tem and who reportedly recommended Mathis for the lobbying job — with whom he'd served in Congress — to Perata, had harsh words about the recent media attention.

"They feel like it's a big story and they haven't been writing about it" and now need to play catch-up, Burton said. "The Cowan (expletive) has been covered, uncovered, discovered, whatever."

The Mathis-Cowan angle was reported by the East Bay Express in March 2006 based on documents that had been subpoenaed in 2005. But Burton wouldn't say whether he believed the investigation should've borne fruit by now if there was any fruit to bear. "I would never second-guess the FBI."

Cowan, who testified long ago before the grand jury, said Wednesday he hadn't heard anything about the investigation in a long time until a reporter "blindsided" him with questions about the Mathis matter.

"I haven't a clue why," Cowan said. "In my opinion, I know Don well and I just don't see any grounds of any kind whatsoever for all this stuff. He's been very straight with us ... I'm lost and confused as to all the allegations."

Mathis wouldn't take a call seeking comment last week. Alameda, Oakland and Alameda County Transportation Authority officials last week confirmed they've received no Perata-related federal subpoenas in the past year.

Subpoenas have probed financial ties between Perata and his son, Nick Perata, and Nick Perata's company, Exit Strategies; his daughter, Rebecca Perata-Rosati, and her businesses, Vox Populi and BPR Communications; his friend, Tim Staples, and Staples' businesses, Ascendent Solutions, Staples Associates and Socratic Solutions; Oakland lobbyist Lily Hu; former Perata aide Sandi Polka and her business, Polka consultants; and others.

For example, while Nick Perata's business was earning money from political committees controlled by his father, the father and son also were involved in real-estate dealings, according to public records. Another example is about $400,000 Perata has said Staples' companies paid him as a consultant, even as he steered political work to those businesses and might have done favors for Staples' clients.

The probe hasn't cowed Perata from continuing to steer work to his family and friends, even in recent months. In February, the campaign for Proposition 93 — the term-limit-reform measure backed by Perata and then-Assembly Speaker Fabian Nunez, D-Los Angeles — paid $10,000 to the campaign consulting firm Liquid Logistics; Alameda County records show Liquid Logisitcs is registered as a fictitious business name to Nick Perata.

The same campaign paid Polka more than $116,000 from August 2007 through March. In April and May, the Perata-initiated campaign to recall state Sen. Jeff Denham, R-Merced, paid Polka about $78,000. And the Perata-controlled Voter Education and Registration Fund has paid Polka more than $289,000 since the start of 2007.

Perata is a former Alameda public school teacher who did stints on the Alameda County board of supervisors and in the Assembly before moving in 1998 to the state Senate where he rose to Senate president in 2004, about the time the federal probe began.

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