Deal-Broker Seeks State Senate’s Top Job

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Los Angeles Times

SACRAMENTO — State Sen. Don Perata, one of two main candidates to become Senate leader, is among California’s most influential lawmakers. The Oakland Democrat also is firmly tied to affairs back home, as Dennis Chaconas learned in a hard lesson.

Perata sent Chaconas, then the Oakland schools superintendent, an e-mail after Chaconas balked at a request.

“I don’t consider my requests ‘favors,’ ” Perata wrote in the January 2001 missive. “But if I did, Robert Duvall’s admonition to the Hollywood producer in ‘Godfather I’ would be instructive. Only I’ve asked more than once already.”

Duvall’s character tells the producer that Mafia boss Vito Corleone wants a godson cast in a lead movie role, and says Corleone “never asks a second favor when he’s been refused a first.” The producer says no, then awakes to find the head of his prized horse in his bed.

Although Chaconas could not recall the issue that elicited Perata’s note, he remembers that “I took it seriously.”

Though many lawmakers spend their Sacramento years jockeying for the next state or federal office, Perata maintains significant sway in Oakland, where he has made no secret of his desire to run for mayor eventually. Indeed, he repeatedly has taken actions that have benefited friends, family and contributors in the capital and in Alameda County, a review of his eight years in the Legislature shows.

Perata might not have the statewide profile of Bay Area politicians such as Oakland Mayor Jerry Brown, former San Francisco Mayor Willie Brown or Sen. John Burton (D-San Francisco), whom Perata hopes to succeed as president pro tem when the upper house votes on the matter this month. But none exerts more influence over the region.

Because of deals Perata helped broker, the state controls the Oakland school district, motorists pay $3 to cross Bay Area bridges, and the Raiders football team plays in Oakland — a deal whose value has been questioned. Oakland and Alameda County have been paying $20 million a year to subsidize the Oakland Coliseum’s bond debt since the team’s return.

The 59-year-old senator has been involved in major statewide issues, pushing for tighter gun controls, broader mental health care, more state money for cancer treatment and better urban transit. He has raised big money for fellow Democrats. But Perata also leverages his power locally by directing money to candidates seeking seats on East Bay school boards, city councils and boards of supervisors.

“People groomed me,” said Perata, a former high school English and civics teacher. In turn, he has “encouraged people and supported people running for other office.”

He says he is involved in more races and raises more money than any politician in the area, “and I’m proud of it.”

Often, the candidates hire Perata’s son, Nick, and a longtime friend, Timothy G. Staples, who was Perata’s roommate at Saint Mary’s College of California and later a business partner. Nick Perata’s company specializes in mass mail for campaigns. Staples is a campaign fundraiser and consultant.

Working on Perata’s campaigns and those of his allies, the younger Perata has grossed $1.6 million, and Staples more than $370,000, since 1998, the year Perata won his Senate seat. Nick Perata and Staples declined to be interviewed.

Perata himself supplements his $106,425 annual legislative salary with a political consulting business, Perata Engineering. In recent years, Staples has been Perata’s one recurring source of income. Perata reports that Staples paid him more than $100,000 last year, and between $10,000 and $100,000 in each of the three preceding years, according to financial documents that lawmakers must file with the state.

The senator declined to specify what services Staples paid him for, except to say that state business was not involved and that he recently severed business ties with Staples. California requires only that lawmakers state whether they receive more than $10,000 from outside sources.

It was on Staples’ behalf in 2001 that Perata called Chaconas, the Oakland superintendent, urging that the two meet. Perata had lobbied to help Chaconas, a lifelong educator, get the job. Then he began making requests, Chaconas said.

Staples arrived with a pitch for a client, Falcon Waterfree Technologies. Falcon wanted to outfit Oakland schools with its products: urinals that don’t use water. Falcon’s chairman, Los Angeles investor Marc Nathanson, donated $30,000 to Perata in 2000-01.

Chaconas delegated the matter to a subordinate, who determined that Falcon’s equipment would not work in Oakland schools.

“We were trying to raise student achievement,” Chaconas said in an interview. “The district was totally broken. This was simply not on the radar screen.”

About the same time, Chaconas said, Perata set up a dinner between him and Calvin Grigsby, a Perata patron who for years ran a successful bond house. Grigsby’s business collapsed when he was indicted in 1998 in what federal authorities alleged was a kickback scheme in Miami.

After Grigsby was acquitted in 1999, Perata tried to help him revive his business, and suggested that Chaconas steer a $305-million school construction bond deal to Grigsby, Chaconas said. Chaconas declined.

Perata said in an interview that Grigsby was the victim of “an injustice” in the Miami case. “I helped him and will continue to do so,” he said.

By 2003, Perata was feuding openly with Chaconas. Even though the district’s test scores were rising, Perata won legislative approval for the state to seize control of the district last year. Although the state faced a multibillion-dollar deficit, Perata persuaded fellow lawmakers and then-Gov. Gray Davis to earmark $100 million in state tax money to help the district restructure its debt.

In the fray, Chaconas was fired.

Perata called him a poor administrator. “They were spending themselves into bankruptcy,” he said.

A recent audit by the state controller’s office found deficiencies in the district’s financial records. Perata began his political career in the 1970s as an aide to an East Bay assemblyman who also employed Bill Lockyer, now state attorney general. Lockyer preceded Burton as Senate president pro tem, the post Perata is seeking.

“Don has the most remarkable capacity to generate loyal friends and convert past enemies into friends,” Lockyer said. “That is a good quality in a leader.”

Perata lost a 1978 run for the Assembly, then worked for Rep. Howard Berman when the Westside Democrat was in the Assembly and lost an attempt to become speaker. Perata won a seat on the Alameda County Board of Supervisors in 1986 and was reelected in 1990 from east Oakland, then ran unsuccessfully for state controller in 1994. He won an Assembly seat in 1996, moving to the Senate in 1998.

Along the way, he learned the art of raising money. In several instances, donors have sent checks while bills that could benefit them have proceeded through the Legislature.

One of Perata’s bills would have allowed acupuncturists to use lasers; a group of 40 Bay Area acupuncturists donated $6,000. Another would have required the state to buy piping made by California metal casters. A metal fabricator in Perata’s district has given him $106,000 since 1996.

And Perata won approval for a flashing billboard off a major East Bay freeway. The billboard company donated $78,000 to Perata and his allies.

“I fund-raise year-round,” Perata said, adding that the timing of donations and legislative action is coincidence: “The money comes in or it doesn’t.”

When the 25 Senate Democrats choose a successor to Burton, who must step down at the end of the year because of term limits, they will be considering Perata for the second most powerful post in the Capitol, after governor.

The stakes are high. Senate leaders must raise campaign money to help their party maintain its majority in the upper house, shape the party’s policy agenda and negotiate major legislation and the annual state budget.

Perata’s main rival is Sen. Martha Escutia (D-Whittier). Like Perata, she has family members who make a living in politics; her husband owns a political consulting firm.

In an interview, Perata said he is proud that his 31-year-old son works in politics. He said his son’s firm, Exit Strategies, maintains a database of 100,000 names for him and handles the printing and delivery of political brochures that the senator writes.

“He is as good as anybody I’ve ever met in the business,” Perata said.

Perata said, however, that he stopped doing business with Staples this year after the San Francisco Chronicle published articles detailing connections between Staples’ business and Perata’s work as a legislator.

“It was doing injury to him as a businessman,” Perata said, referring to the impact of the articles. “I wasn’t going to take my friend through that.”

As a private consultant, Staples is not required to list his clients with the state. But interviews reveal that in 2002 and 2003, Staples worked for Bay Area card rooms opposing a small Indian tribe’s effort to open a Nevada-style casino in San Pablo, north of Oakland.

Perata opposes the San Pablo Indian casino, saying Indians should not be allowed to buy property and turn it into reservation land for purposes of building casinos. A past chairman of the Senate committee that oversees card rooms, Perata has taken $87,500 in campaign donations from card rooms in the last five years. Tribes that own casinos have donated $55,000.

Last year, a campaign committee established by an Oakland developer who is a longtime Perata ally hired Staples, paying one of his firms $67,915. Perata’s donors contributed $135,000 to the committee, called Community Leaders for Neighborhood Preservation, which supported an array of local candidates and causes.

Mercury General Corp., an insurance company, was the largest single donor to Community Leaders for Neighborhood Preservation, at $75,000. Perata carried legislation last year that could have helped Mercury market its auto insurance. The measure was signed into law, but a judge struck it down.

In one of Perata’s most ambitious undertakings, the senator worked for more than three years on legislation that led to a measure on the March ballot in Bay Area counties to raise tolls by a dollar, to $3, on seven regional bridges. Voters approved the measure, 57% to 43%.

The increase, which took effect July 1, is expected to generate $125 million annually. Already, there is talk of funding shortfalls and the need to raise tolls or taxes again. But the measure won support from builders, unions, environmentalists and politicians. It includes something for almost every interest.

There’s money for an expanded Bay Area Rapid Transit system, earthquake reinforcement for BART’s trans-bay tunnel, widened roads, bridge operations and express bus lanes.

“It wouldn’t have happened without him,” said Sen. Tom Torlakson (D-Antioch), who endorsed the transportation measure but backs Escutia in the Senate leadership race. “He picked up the issue, ran with it, crafted a strategy and saw it through.”

More than 20% of the money is earmarked to operate ferry systems — plus tens of millions more to pay for new boats and improve ferry terminals. The money for ferries raises the eyebrows of some transit experts: Ferries carry roughly 10,000 of the Bay Area’s daily commuters, while about 150,000 people ride BART trains across the bay and millions use freeways.

One of Perata’s patrons is East Bay developer Ronald Cowan, who has donated almost $110,000 to him since 1999. One of Cowan’s companies has operated a ferry to San Francisco from his office, retail and housing development in Alameda.

In an interview, Cowan said the development stands to gain “absolutely nothing” from the ballot measure. He said he expects to end his involvement in ferry service at the end of the year. Cowan has only praise for Perata, calling him “smart, articulate, funny, very loyal.”

The campaign for the transportation measure cost $600,000. Campaign finance statements show that $33,000 of that went to Timothy Staples.

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