New Details Emerge in Perata Inquiry
SACRAMENTO â€" A document disclosed Friday
offered new details about the federal law enforcement
inquiry into the activities of incoming state Senate leader
Don Perata and an array of his relatives, associates and
A subpoena issued by a federal grand jury meeting in
Perata's hometown of Oakland is one of several delivered in
recent weeks as part of an FBI probe apparently focused on
activities there. The scope and target of the investigation
are not clear.
The subpoena was obtained by the Oakland-based East Bay
Express newspaper and posted Friday on its website.
Perata's attorney, Sacramento criminal law specialist
George L. O'Connell, said Friday that Perata had done
nothing improper. Perata on Thursday denied wrongdoing and
said he had not been contacted by federal authorities.
The name of the entity that received the subpoena is
blotted out on the website. But images of most of the
three-page document offer a list of individuals of interest
to law enforcement. It requests that the recipient provide
records of payments, correspondence and other documents
involving the individuals and their businesses.
â€¢ Lily Hu and her Oakland-based
lobbying business. The investigation apparently dates to
2003, when Hu's estranged and embittered companion
contacted the FBI with an array of allegations related to
Hu and politicians.
Hu, who worked briefly as an aide to Perata and ran for the
Oakland City Council in the 1990s, represents several
clients before Oakland officials, including some who are
among Perata's major backers.
All together, Hu's clients have donated at least $400,000
to Perata's campaigns over the years, campaign finance
This year, Perata carried legislation, which was signed
into law, to help open the way for a developer, Signature
Properties, to purchase a prime piece of waterfront land in
downtown Oakland. Signature wants to build 3,000 homes and
various retail outlets on the 60-acre parcel. Hu has
represented Signature in Oakland. Signature has donated
$63,000 to Perata over the years.
The legislation, SB 1622, passed unanimously and had no
Mark Stice, Signature's general counsel, said law
enforcement personnel had not contacted the company. Stice
said the proposed development still required approval from
various local agencies.
Hu's attorney, Doron Weinberg, said his client had done
â€¢ Timothy G. Staples and three of his
corporate entities â€" Socratic Solutions,
Staples Associates and Ascendent Solutions.
Staples, Perata's roommate at Saint Mary's College of
California in the 1960s, has earned more than $370,000
since 1998 as a consultant on Perata-related campaigns.
Staples could not be reached and has declined to be
interviewed in the past.
On his statements of economic interests, on which he
discloses his outside income, Perata reports that Staples'
entities paid Perata's political consulting firm, Perata
Engineering, more than $100,000 last year and $10,000 to
$100,000 in each of the three preceding years.
The senator has said he severed the business relationship
this year after it became the subject of news reports.
â€¢ Sandra Polka. She is a long-time
political consultant in Sacramento and one of Perata's
chief political advisors. Campaign finance reports show she
has grossed at least $254,000 this year.
She has declined to comment.
â€¢ Perata's son, Nick, and his
businesses, NPR Productions and Exit Strategies. Nick
Perata lives in Oakland in a home once owned by his father.
Specializing in mass mailings, Nick Perata works on his
father's campaigns and those endorsed by the elder Perata.
Campaign finance reports show the younger Perata has
grossed more than $1.6 million since the 1990s.
â€¢ Perata's daughter, Rebecca, her
husband, Michael Rosati, and their business, Vox Populi.
She has worked on Perata campaigns.
In a telephone news conference Friday, O'Connell said the
appearance of names on a subpoena did not suggest that the
individuals had done anything wrong. He added that
prosecutors often used grand juries to facilitate
wide-ranging investigations that culminated with no charges
O'Connell denounced the investigation and called on the
U.S. Justice Department to investigate whether federal law
enforcement officials had disclosed details of what was
supposed to be a secret grand jury investigation, thereby
violating federal law.
He charged that the timing of "leaks" suggested that there
was a "political agenda" aimed at derailing Perata from
formally being elected Senate president pro tem when the
Legislature reconvened in early December.
"This kind of sneak attack on a public servant who has
acted appropriately at all times amounts to a gross misuse
of the grand jury process," O'Connell wrote in a letter to
U.S. Atty. Kevin Ryan of San Francisco.
Ryan's spokesman declined to comment Friday.
Perata, 59, was narrowly elected Senate leader in a secret
vote by Democrats in August, and must be confirmed when the
lawmakers return. As president pro tem, Perata would be
among the most powerful people in state government,
serving, for example, as one of five primary negotiators
who shape the state budget.
Sen. Martha Escutia (D-Whittier), who was Perata's main
rival for the leadership position, said in an interview
Friday that she expected senators would confirm Perata and
that she intended to vote for him.
"I'm not running for pro tem," Escutia said. "Everything
about the grand jury as far as I'm concerned is merely
speculation right now. I haven't seen anything. If a grand
jury has been impaneled, I'm sure that due process will
take placeâ€¦. There is this notion of
innocent until proven guilty. I highly respect that."
O'Connell, who served as U.S. attorney in Sacramento in the
early 1990s and presided over high-profile public
corruption cases, cited various news reports that quoted
"law enforcement officials" as sources, and charged that
the leaks violated "fundamental rules of fairness."
O'Connell was particularly harsh in his attack on law
enforcement authorities for appearing to implicate Perata's
children, labeling the suggestion "just plain indecent,"
"grossly irresponsible" and "shameful."
O'Connell added that Perata "would be more than happy to
cooperate with any legitimate inquiry," but that federal
investigators had not tried to contact the senator.
He called on Ryan to allow him to depose law enforcement
officials who might be involved in the investigation "to
determine whether there was a political agenda."
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