Group writes Burton, alleges wrongdoing
The San Francisco Chronicle
SACRAMENTO — Top Senate leaders Tuesday ordered an ethics investigation into whether consulting fees paid to state Sen. Don Perata violated campaign finance laws or conflict of interest rules.
A Chronicle investigation published Tuesday detailed how Perata, D-Oakland, has been paid hundreds of thousands of dollars in consulting fees in recent years from a college friend. The friend, Tim Staples, has received money from corporations that have donated to Perata in the past, and one donor in particular stood to benefit from legislation Perata carried.
The Senate Rules Committee referred the matter to the Committee on Legislative Ethics after a consumer group asked for an inquiry based on the newspaper report.
“Any allegation about any member is automatically forwarded to the chief counsel of that committee, who does preliminary work to determine whether anything more should be done with it,” said Greg Schmidt, the secretary of the Senate.
He said the inquiry would be conducted by Ann Bailey, the chief counsel of the ethics committee. The ethics committee currently has no elected representatives on its board.
Bailey declined to confirm whether she was conducting an investigation. Speaking generally, she said, such investigations are conducted confidentially, and findings would be made public only if “there is a reason to believe the (Senate’s) standards of conduct have been violated.” she said. If so, public hearings could be held, with possible penalties ranging from minor sanctions to a vote, exceedingly rare, to expel the senator from the Senate.
The complaint was filed by a Santa Monica-based consumer advocacy group, the Foundation for Taxpayer and Consumer Rights. The group sent a letter Tuesday to Senate President Pro Tem John Burton, who chairs the Senate Rules Committee.
At a news conference in San Francisco on Tuesday, Jerry Flanagan, an advocate in the group’s San Francisco office, said: “Certainly there is a lot of evidence here that Perata violated campaign laws that bar elected officials from utilizing their positions to leverage their personal wealth.
“That’s a conflict of interest. State law nixes that.”
Noting that Perata is running for state president pro tem, Flanagan said, “The allegations should raise a flag to Senate members that Perata may be unfit to lead the Senate. … If indeed these allegations are true, not only is Sen. Perata unfit to be in the Senate president position, he may be unfit for the Senate whatsoever.”
A spokesman for Burton did not return repeated telephone calls seeking comment Tuesday. Perata did not return a telephone call seeking comment. A spokesman for the senator said he underwent minor surgery Tuesday morning.
The Chronicle reported that corporations, including Mercury General Corp., Ameriquest Mortgage Co., Zenith Insurance Co. and PG&E Corp., had donated $135,000 to a new and obscure Oakland political fund, which paid nearly half that amount to a company run by Staples. Perata acknowledged that he had been paid about $100,000 per year by Staples, though the two men said the payments were for consulting on unrelated real estate development deals.
“The appearance of this scheme goes beyond an ethical violation and looks like a complex and illegal money laundering mechanism that has been used to enrich an elected official,” the consumer group wrote in its letter to Burton.
The group has been critical of Perata since he agreed to carry legislation on behalf of Mercury Insurance Co. that would have resulted in higher insurance rates for drivers, often low-income, who do not have established insurance records or who allowed their insurance coverage to lapse. The legislation was signed into law in 2003, but a state judge threw it out last month.
The group is headed by Harvey Rosenfield, the consumer advocate and author of Proposition 103, which in 1998 lowered auto insurance rates for drivers with good safety records.
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