Tag Archives: legal defense fund

Can Don Perata Return The Money Meant For Party Efforts Now?

Don Perata has been cleared of wrongdoing in an ongoing corruption probe that lasted throughout the Bush Administration and was seen by many as politically motivated.

We have had many problems with Perata, mostly that his terrible leadership contributed to scaring Democrats out of challenging Abel Maldonado and botching the Jeff Denham recall.  If we had a real leader who actually sought to win elections instead of making friends or idle threats, and who was successful on both of those fronts, we would have a 2/3 majority in the State Senate today.  I’m very glad to have him out of the state legislature.  But by and large, corruption issues never made their way into our critique of Perata, and I for one am pleased he has been cleared.  You can read the extremely brief letter from the Acting US Attorney here and Perata’s statement here.

What we did have a problem with was Perata transferring $1.5 million dollars from a campaign account intended to help elect Democrats and push party issues to his own legal defense fund, one day after the election.  The move was not illegal but certainly unethical – if he needed legal defense money he could have raised it for that purpose, and instead he raised money for one ostensible purpose and then used it for himself. (NOTE: Perata also took $450,000 from the California Democratic Party for his legal defense fund as well.)  I was quoted at the time:

David Dayen, an elected Democratic State Central Committee member from Santa Monica, blogged angrily this summer about his party’s contribution to Perata’s legal defense fund, contending the money would’ve been better spent on legislative races. The same goes for Leadership California’s money, he said Wednesday; despite a Democratic presidential candidate carrying California by the largest margin since 1936, Democrats netted only three more Assembly seats and none in the state Senate.

“Every time I asked the California Democratic Party about getting more active and involved in local elections, they said the state Senate and the Assembly control those races … and we don’t have a lot of flexibility. So Perata, at that time, and Nunez or Bass had the authority to run those elections,” Dayen said. “Now we see what happens when you vest power in these closed loops – suddenly self-interest becomes more important than the good of the party.”

He believes this is why Perata didn’t step aside as Pro Tem earlier, as Assembly Speaker Fabian Nunez relinquished his post to Karen Bass in May: “Darrell Steinberg was sitting there ready to go … and we were all like, ‘What the hell is going on?’

“We speculated it had to be that he still needed the leverage to make the calls to raise money for himself.”

So, now that this legal case has wrapped up, let me pose the question – Will Don Perata return the money left in his legal defense fund to accounts intended to elect Democrats?  Both the membership of the California Democratic Party and scores of anonymous donors to Leadership California unwittingly seeded his legal campaign.  If Perata used all $1.5 million between November and today, I’d like to see the receipts; no court case was ever filed, no depositions taken in the intervening 7 months, no movement whatsoever.  Either some lawyers got rich on having donuts or there’s a lot of money left over.  What’s more likely, of course is that Perata will now siphon that money from the legal defense fund into his campaign account for his run to be Oakland’s next mayor.  In the end, it’s all about Don Perata.

That would be a betrayal, and a disservice to those who donated, expecting to help Hannah-Beth Jackson win in SD-19, or to help defeat Proposition 11, the redistricting measure.  There’s not much of a way to contact Don Perata anymore, though I’m assuming his Oakland Mayor campaign will ramp up soon.  He needs to be asked about this pot of money, and why it cannot now be used toward its intended purpose.

UPDATE: Thanks to Josh Richman for updating this:

UPDATE @ 5:25 P.M.: David Dayen at Calitics wants to know if The Don will give back the $1.9 million he diverted from his Leadership California committee – ostensibly created to support Democratic campaigns and causes – into his legal defense fund late last year. (And hey, what about the $450,000 he got from the California Democratic Party?) Fat chance, David… looks as if it’s all gone into lawyers’ pockets by now. At least the Fair Political Practices Commission has now cracked down on these smelly transfers.

I can’t believe he blew through all that money.  Look out, City of Oakland Treasury!  Clearly he was paying off years’ worth of debts with that fund.  Wow.

Another $400,000

CapAlert reports that on December 5, Don Perata took ANOTHER $400,000 from his unused campaign account and moved it into his legal defense fund.

The latest transfer means the Oakland Democrat has now taken a total of $1.9 million raised in an account earmarked for ballot campaigns and used it to shore up the legal fund he created to fight an FBI corruption probe.

The transfers are legal, though California’s campaign watchdog agency is considering stricter regulations of ballot accounts like Perata’s […]

The FBI has been investigating Perata since 2004, inquiring about his business dealings and those of his family and close friends. Both Perata’s and his son’s homes were raided by FBI agents four years ago.

No charges have ever been filed, though Perata has tallied up more than $2.1 million in expenses fending off the investigation.

His defense fund was $250,000 in debt as of the end of September, as the former leader faced the unwelcome prospect of being out of office – and without leverage over potential donors.

So Perata has transferred $1.9 million (out of the $2.7 million he had amassed) from the ballot committee to ease his legal debt load.

Once the election ended, Perata had no use for that $1.9 million in his campaign account as a termed-out legislator.  However, there was plenty of use for it BEFORE the election, when Prop. 11 was being outspent 10 to 1 and losing by less than 2 percentage points.

Again, the alibi that he needs this money to fight off a “fishing expedition” from Bush partisans at the US Attorneys office doesn’t scan at all.  Those prosecutors are all resigning in a month.  If he’s done nothing wrong, what use could he possibly have for $1.9 million dollars over the next 30 days?  Or are the expected Obama US Attorneys going to continue this partisan witch hunt?

By the way, the rank and file in the CCPOA is pretty pissed off about what amounts to theft of their political donations.

On PacoVilla’s Corrections Blog, a Web site popular with state correctional officers, one user wrote: “Not only did we (CCPOA) back the wrong horse (No on 11) but now we’re paying for Perata’s corruption defense and from (CCPOA spokesman) Lance (Corcoran)’s comment … it sounds like we’re very happy to be privileged to do so.”

By the way, there’s still $600,000 or so left in that account.  So don’t be shocked when Perata drains that out too.

House Judiciary Warns DoJ on Perata Leaks

I’ve been mulling this around in my head for a few days.  Three powerful members of the House Judiciary committee have have sent a letter to the Justice Department calling for an investigation into leaks surrounding the inquiry into State Senate President Pro Tem Don Perata.

No article since November 2004 has explicitly said that any information came from a federal government source. But in a letter to U.S. Atty. Gen. Michael B. Mukasey obtained by The Times on Monday, U.S. Reps. John Conyers Jr., Linda Sanchez and Zoe Lofgren wrote, “We are disturbed and concerned that news story after news story . . . has cited federal law enforcement sources as the basis of information.”

The only article specifically mentioned in the July 31 letter was a story in the San Francisco Chronicle. The article cited “sources familiar with the probe,” a broad term that could encompass federal agents, defense attorneys and people who have been questioned […]

On Friday, the day after the congressional letter was sent, a Wall Street Journal article said the investigation into Perata “gained momentum over the past year.” The article’s details were attributed to anonymous people “close to the defense,” who said Perata’s longtime political consultant, Sandi Polka, was granted immunity to compel her to answer questions.

(Here’s that SF Chron article mentioned in the letter.)

The Perata investigation certainly has dragged on for years, leading to him needing more and more funds to raise in his defense.  In particular, the dumping of $250,000 from the California Democratic Party into his legal defense fund raised a lot of eyebrows around these parts.  After the initial explanation of “We’re the CDP and we can do what we want,” a secondary explanation was that the investigation had been politicized and that this was part of the DoJ’s efforts to prosecute and delegitimize Democrats.  A couple weeks later, out comes this letter, signed by two members of the California delegation.  But it’s Conyers’ participation that makes me believe that this is a real concern.  I trust Conyers enough to think that he wouldn’t simply badger the DoJ to help out a political problem in California.

Of course, let’s look at what the letter is actually alleging.  It’s not suggesting that the investigation itself is unnecessarily political, but that someone inside the investigation is using the media to disparage Perata.  That may well be true, but it doesn’t necessarily follow that the whole investigation is a farce.

Let’s now look at what this does NOT suggest:

• It in no way excuses the CDP for paying off Perata with $250,000 in the middle of an election year, whether that money was simply laundered through them and earmarked for Perata or not.  Based on this SacBee report, it appears Perata is perfectly capable of raising money for himself:

Senate President Pro Tem Don Perata has solicited at least $200,000 this year from political interest groups for a nonprofit foundation that promotes and rallies support for one of his bills.

The arrangement, apparently legal, allows the Senate leader to solicit unlimited funds for his own political agenda without having to detail how the money is spent.

“He may have found a loophole in the Political Reform Act that needs to be closed,” said attorney Bob Stern, a co-author of the state’s Political Reform Act who now runs the Center for Governmental Studies in Los Angeles.

Which leads me to point 2:

• There is no way that Perata should still be Senate President Pro Tem at this point.  While he has done a good job of hammering Republicans for their intransigence on the budget, this image hit, as well as the constant distraction of having to find new ways to raise money for his legal bills, are not what we need at this sensitive time, ESPECIALLY when Darrell Steinberg is waiting in the wings and perfectly capable of performing the same duties without the black cloud of indictment hanging over the head of the Democratic leadership.  They haven’t even taken a caucus vote on this yet, to my knowledge – it’s currently scheduled for August 21, but during these budget negotiations that’s doubtful to come off.

It is perfectly consistent to be skeptical of the Justice Department’s case against Perata and to ALSO demand that he step down from his leadership position, and to excoriate the CDP for their conduct in either shoveling Perata money or acting as a conduit for that fund transfer.

Why The Perata/CDP Scandal Threatens The Budget Fight

As many have noticed, the Leadership has moved on the offense in the budget fight.  They’re not negotiating with themselves, instead staking out a fairly strong position for changing the revenue model and rejecting a stop-gap, borrow-and-spend, cuts-only approach.  Media wags, who normally act like two year-olds and talk about “working together” as if this would solve the problems in Sacramento, are responding to the aggressive approach.  George Skelton writes today about how California voters “can’t handle the truth,” how they want unlimited services without paying for them, and how they need to face reality.  He also specifically cited the 2/3 requirement as crippling the state.  Dan Walters says it’s about time for a “budget cage-match,” the ideological battle to once and for all address the structural deficit and budgeting-by-catastrophe that has become commonplace.  

Yet at the same time, the California Democratic Party hands $250,000 to the Senate President Pro Tem to pay for his legal bills, causing oodles of outrage.  Over the last two days I’ve been given a lot of reasons for this.  “The money was earmarked for Perata,” they say.  Perata has his own campaign account already and he’s perfectly capable of raising his own cash.  If people want to hide their donations by legally laundering them through the CDP, that’s nothing the state party should involve itself with.  There ought to be transparency.  “He’s being railroaded,” they say.  That’s certainly possible in an era of Bush league justice, but nobody is making that case credibly, just talking about how long the investigation has dragged on.  

And then there’s this excuse.  “If the Senate leader is indicted, that will hurt downticket races.”  But the appearance of impropriety in the CDP legally laundering contributions and paying for Perata’s legal defense fund is doing the EXACT same thing, and at a crucial time.  The LAT op-ed that Bob mentioned is just the beginning.

Furthermore, I have no idea why Sen. Perata is still the leader.  Sen. Steinberg, who did a $10 fundraiser in Sacramento a couple days ago and who I feel represents a breath of fresh air, is perfectly capable of carrying out the duties, and having someone this tainted as the face of the budget fight is incredibly damaging.  It won’t be long before the press connects this story and the budget story, and then all the mostly laudable efforts to cast a stark difference between Democrats and Republicans on the budget will be compromised.  For the life of me, I can’t figure out why the caucus has not demanded immediate leadership elections.  I believe Steinberg is scheduled to take over on August 11, when we’ll already be down the road in budget negotiations.  It is the height of stupidity to thrust someone into the leadership at that late date.  He should have been in there a month ago.

At the least, Perata can return the money and throw himself fully into this budget fight as a means of preserving what’s left of his legacy.  The CDP can return to its core mission of electing Democrats, and if it has to give back this $250K to donors, so be it.  But at a time when the momentum is on Democrats’ side and the budget fight is going to consume all the oxygen for the next couple months, allowing a distraction like this is a huge mistake.

Your CDP Donations At Work

It wasn’t enough that $4 million passed to Fabian Nuñez’ accounts through AT&T as a thank-you for the cable franchising bill, now CapAlert reports that the Democratic Party is paying off some of Don Perata’s legal bills:

The California Democratic Party has donated $250,000 to help Don Perata pay off his legal bills, as the Senate Democratic leader continues to rack up expenses fending off an ongoing FBI corruption investigation.

The party made the quarter-million dollar donation on July 1, according to campaign filings.

The money comes just in time for Perata, who, according to a May disclosure, had only $273 cash on hand in his legal defense fund and $250,000 in unpaid bills.

Jason Kinney, a spokesman for Perata on legal issues, said the donation — and the continuing expenses — are “no indication of anything.”

Actually, it’s an excellent indication that the CDP is interested in protecting their own rather than moving the state forward.

How many regional organizers throughout the state for the fall would $250,000 buy?  How many pieces of direct mail?  How many registration drives?  How many door-hangers?  How many Google ads going after California Republicans?

Don Perata is not the Democratic Party, and in a few months he won’t be a Senator.  His recent efforts have included ensuring that the party won’t get to a 2/3 majority in the State Senate and protecting his Republican pal Abel Maldonado.  And as a reward, he gets his legal bills paid.  It’s good to be the king.

Whether the FBI investigation is legitimate or a fishing expedition is actually irrelevant.  At a time when a progressive wave and massive expected turnout could sweep a whole new generation of Democrats into office, the CDP is paying fucking legal bills for their leaders.  The locals are doing a great job registering new voters and working to victory in November.

They don’t deserve the party they have.