Perata Shifted $1.5 Million from PAC to His Legal Defense

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Contributors to Don Perata’s political action committee this year might have thought their money would bankroll the attempted recall of state Sen. Jeff Denham or opposition to a legislative redistricting reform measure.

But a day after the Nov. 4 election, and with only a few weeks left as state Senate President Pro Tem, the Oakland Democrat moved $1.5 million from Leadership California into his own legal defense fund, formed to counter a years-long FBI corruption probe.

This sum dwarfs the California Democratic Party’s $450,000 contribution to Perata’s legal fund over the past year, which had caused an outcry from some party activists. It also towers above the $555,000 Perata had moved from his Taxpayers for Perata committee — ostensibly created for a 2010 Board of Equalization run — into his legal defense fund in several chunks since 2005.

The transferred amount is more than the entire $1.4 million the committee had raised in this year’s first nine months, and more than half of the $2.7 million it had on hand as of Sept. 30.

"This was a general-purpose ballot measure account — not tied to any specific measure," Perata spokesman Jason Kinney said Wednesday. "The use of any remaining funds for legal defense activities is perfectly legal, appropriate and commonplace. In fact, the Political Reform Act explicitly allows for it."

Coincidentally, the state Fair Political Practices Commission today will consider a proposed regulation that might bar transfers such as this in the future.

The FBI’s probe, which became public knowledge in late 2004 just weeks before Perata became the Senate’s President Pro Tem, has seemed to focus on whether Perata took kickbacks or bribes in exchange for official favors, perhaps via a network of family, friends and associates. Agents searched his house, as well as his son’s and his former aide’s; an unknown number of witnesses have testified before a federal grand jury; and thousands of pages of documents have been gathered under dozens of subpoenas issued to public agencies and private companies. So far, nobody has been charged with a crime, but Perata’s legal defense fund has spent at least $1.82 million since the start of 2005.

"Ideally, Senator Perata wouldn’t be forced to spend millions of hard-raised dollars to defend himself from a meandering, misguided investigation fueled exclusively by rumors and partisan vitriol," Kinney said. "But, sadly, that’s the world in which today’s officeholders live and Senator Perata can hardly be faulted for taking legal, appropriate steps to defend himself."

The California Correctional Peace Officers Association gave Leadership California $602,000 this year, making the prison guards’ union far and away the PAC’s largest contributor in 2008. Most of that money was given in August ostensibly to oppose Proposition 11, drawing accusations of pay-to-play politics from redistricting reform supporters.

"We just have more faith in Senator Perata to get the job done," correctional officers spokesman Lance Corcoran replied at the time, saying it was unimportant where the money went so long as it would be used against the ballot measure.

"One of the issues that always comes up with respect to independent expenditures is that they are independent. We were opposed to Proposition 11; however, once you make the contribution, you have no control over the independent expenditure," Corcoran said Wednesday. "We continue to have faith in Senator Perata and we believe that our moneys were well spent."

Proposition 11 passed with 50.9 percent of the vote.

"I don’t think they care, because most of the money is given for governmental access — it’s not given for campaigns," said Bob Stern, president of the Center for Governmental Studies in Los Angeles and former Fair Political Practices Commission general counsel who authored of the Political Reform Act of 1974.

Stern said there is probably nothing illegal about this transfer of funds between Perata’s committees, but "we’d consider this an end run "… around the campaign contribution laws." And among such end runs, he said, $1.5 million "is big."

"My initial reaction is that Perata has once again pulled a fast one," said California Common Cause Executive Director Kathay Feng, who was among Proposition 11’s chief proponents. "I think he has just been playing this shell game with all of his donors and supporters and the hundreds of thousands of dollars that they’ve given to him with the assumption he would use it for specified political causes."

It’s one more example of Perata "pitching some political cause to major donors and then doing an about-face on them," Feng said, likening it to when Perata launched the attempt to recall state Sen. Jeff Denham, R-Merced, earlier this year but then abandoned it weeks before the election.

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."

PAC Spending Review

WHAT: The state Fair Political Practices Commission today will consider a new regulation that would require a candidate-controlled ballot measure committee such as Don Perata’s Leadership California to raise and spend money only for one specific measure at a time, barring the kind of transfer Perata made last month to his legal defense fund.

FOR IT: Carmen Balber, an advocate with Consumer Watchdog, wrote to the FPPC on Tuesday in support of the change, which has been in the works for about a year, saying such committees don’t have reporting requirements and resemble "unregulated slush funds."

AGAINST IT: California Republican Party Chairman Ron Nehring and general counsel Charles Bell Jr. sent a letter Tuesday concurring with another sent by attorney Lance Olson on behalf of new state Senate President Pro Tem Darrell Steinberg, D-Sacramento. All of them oppose the new regulation as being beyond the FPPC’s authority and in violation of candidates’ Constitutional rights.

Olson’s firm, as it happens, has been paid at least about $268,000 by Perata’s legal defense fund in recent years.

Reach the author, Josh Richman, at: 510-208-6428 or [email protected]. Read the Political Blotter at

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