Long-standing ties earned both men substantial fees
The San Francisco Chronicle
SACRAMENTO — Business ties between state Sen. Don Perata and a longtime friend — already under scrutiny by a Senate ethics panel — are far more extensive and lucrative than previously reported, state documents and interviews show.
Perata’s friend and associate, Timothy G. Staples, has received $313,000 in business from political campaigns initiated or supported by the influential Oakland lawmaker. At the same time, Staples has paid Perata $100,000 in consulting fees that supplement Perata’s Senate salary, according to financial records and interviews with the senator.
A Senate ethics lawyer began scrutinizing Perata’s relationship with Staples this week after The Chronicle detailed financial ties between the two men and a little-known Oakland political committee. That committee, Community Leaders for Neighborhood Preservation, hired Staples and raised money from Perata’s campaign donors — even as Staples was paying Perata separately for consulting services.
A political watchdog group that has been harshly critical of Perata believes the senator should be investigated for potential violation of conflict-of-interest laws. The Foundation for Taxpayer and Consumer Rights said in a letter to the Senate this week that Perata’s payments for consulting work looked “like a complex and illegal money-laundering mechanism.”
Both Perata and Staples deny this, saying there was a “firewall” because Staples owned two companies and made sure his political income was not used to pay Perata.
But now there are new questions about the income Perata receives from Staples. A review of state campaign finance records shows Perata has consistently received an income from one firm, Staples Associates, amid political campaigns that have benefited the company.
On Perata’s recommendation, Staples was hired in 2000 to raise money for an Alameda County ballot measure re-authorizing a sales-tax increase, dubbed Measure B. He received $20,000 for his work, documents show. Since then, Staples has worked on other campaigns linked to Perata, including a term-limits initiative in 2002, a $1 billion bond for BART seismic work and a Bay Area bridge toll increase facing voters in two weeks. Throughout these years, Perata also reported an income from Staples Associates.
Perata is the Senate majority leader and a major fund-raiser for Democrats and the ballot measures they support. A longtime fixture of Alameda County politics, he is considered one of the most powerful lawmakers in Sacramento. He is considered a contender to become the new Senate leader when Senate President Pro Tem John Burton, D-San Francisco, retires this year.
Perata and Staples did not return calls by The Chronicle Wednesday.
Both men have denied there is a link between Staples’ income from political campaigns and the money Perata has received from Staples through his two companies — Staples Associates and Ascendent Solutions. Perata said Ascendent Solutions had paid him $7,000 in 2002, and Staples Associates has provided him with income of about $100,000 a year.
In an interview last week, Staples said that Perata provided business advice on the Bay Area real estate climate but that there was “no tie-in” to the work Staples does on political campaigns, even though the campaigns have been initiated or sponsored by Perata. For nearly a decade, Perata has operated his own consulting firm, Perata Engineering.
“He has a general knowledge of the Bay Area and of business in general that is very helpful,” Staples said last week. “I am the business guy, but I don’t understand trends and things that occur in the Bay Area. He has that kind of general expertise about the way things are going.”
Staples Associates began paying consulting fees to Perata Engineering in 2000, according to Perata’s statement of economic interest. The same year, Staples began working on Measure B, which re-authorized a half-cent sales tax increase in Alameda County.
It is unclear whether the relationship began before then; Perata said he had been working with Staples for “five or six years.” Perata’s income could not be independently verified, but his economic statements show he received between $10,000 and $100,000 a year from Staples Associates since 2000.
Perata and Staples have a long-standing relationship when it comes to politics. A San Francisco political consultant who helped run the Measure B campaign, John Whitehurst, said Perata had first introduced him to Staples during the 2000 campaign.
“Don asked me whether I had worked with Tim,” said Whitehurst, founder and principal of Barnes, Mosher, Whitehurst, Lauter & Partners, which also does work on Perata’s legislative campaigns. “I said no, and he introduced me. Tim had the best proposal. On that basis, and also the fact that I wanted to get Perata involved, Tim was the logical choice.”
Whitehurst said Staples had proved to be a thorough, effective and methodical fund-raiser who works well with donors. Measure B passed overwhelmingly, and Staples worked on other Bay Area campaigns for Whitehurst. Besides his good work, Whitehurst said, Staples comes with an added benefit — Perata.
“He has the ability to get Perata to sit in the room and dial numbers for fund raising,” Whitehurst said. “On several of those campaigns, Perata has been a fund-raiser, and his involvement and ability to raise money for the campaigns has been important.”
Whitehurst’s firm has a close association with Perata as campaign consultants and also as the lead proponents for various ballot measures Perata is backing. Whitehurst said he was not aware of Staples Associates’ payments to Perata but nevertheless said Perata does not benefit directly from any of the campaigns his firm has run.
“Perata is either the chair or co-chair of these campaigns, and Staples is a contractor with the campaign to raise money,” Whitehurst said. “Perata in no way benefits from the campaign financially. There is no financial dealing (with Staples) other than in each campaign you have to have a campaign fund-raiser.”
One of Staples’ most lucrative ventures was with the Proposition 45 campaign, which paid Staples Associates $188,740 for fund raising and consulting work, documents show. The March 2002 ballot initiative, which failed, would have modified the state’s term limits law and allowed senators and Assembly members to serve four additional years, but only if local voters signed enough petitions requesting a vote on the matter.
Perata was actively involved in pushing the measure and loaned $30,000 through his Senate committee to support Proposition 45. A political group allied with Perata, the Committee for Urban Excellence, donated $91,140 to the campaign through loans and by paying for pamphlets that were mailed to voters.
This year, Staples also is raising money for Regional Measure 2, a Bay Area bridge toll increase that Perata helped place on the March 2 ballot through legislation. Campaign documents show Staples Associates so far has been paid $3,000 for work on that campaign but is owed another $19,000. Perata is listed as the chairman of that campaign, along with several other prominent Bay Area politicians serving as co-chairs.
Regional Measure 2 was written by Perata and is designed to provide at least $125 million a year for transportation projects over the next 35 years. Legislation written last year by Perata requires a vote of seven Bay Area counties to approve the $1 toll increase.
Mark DeSaulnier, a Contra Costa County supervisor who serves as a campaign co-chair, said that Perata and his team were “clearly the core principals” running Regional Measure 2 but that he would like to find out more about the relationship between Perata and Staples before commenting. Nevertheless, he said, speaking generally: “You always have concerns when raising money.”
Two years after the successful Measure B campaign, Staples worked on Measure BB on the November 2002 ballot, which would have authorized $1 billion in bonds for seismic retrofitting of BART.
Perata was co-chair of that campaign, which ultimately failed to get enough votes for passage. Staples received $21,000 for his fund-raising work, disclosure statements show.
Last year, Staples’ consulting firm, Ascendent Solutions, also collected nearly $62,000 in consulting fees for fund raising and managing an Oakland group called Community Leaders for Neighborhood Preservation. That group, started by developer Phil Tagami, a longtime friend of Perata’s, raised $135,000 from corporate donors, including $25,000 personally raised by Perata from Ameriquest Mortgage Co.
Another major donor to the group was Mercury General Corp., which sponsored legislation Perata carried that consumer groups said would have benefited the company by allowing it to levy a surcharge for lapsed coverage. Perata has denied he did any favors for Mercury by carrying the bill and said he expected criticism because of his prolific fund raising.
Tagami said Community Leaders for Neighborhood Preservation was designed to support Democratic candidates he likes. So far, though, most of the money paid out by the group has gone to Ascendent Solutions for management and fund-raising work. Tagami has said he was unaware that Staples also was paying Perata an income through his other company.
CAMPAIGN CONTRACTOR PAYS LAWMAKER
State Sen. Don Perata carries legislation that triggers a March 2 ballot measure asking Bay Area voters to increase bridge tolls to pay for transportation projects.
A political committee is formed to run a campaign to pass Regional Measure 2. Thecommittee, chaired by Perata, is called Bay Area Commuters for Transportation Solutions.
Bay Area Commuters for Transportation Solutions hires Staples Associates, owned byPerata friend Timothy Staples. Staples Associates will be paid at least $22,000 to dofund raising and consulting.
Perata reports on state economic disclosure forms that his political consulting firm,Perata Engineering, receives between $10,000 and $100,000 in annual income from Staples Associates. In an interview Perata said he receives “around $100,000” a year from Staples.
Sources: Campaign finance records, Chronicle interviews