Ex-Calif. Senate leader cleared in kickback probe

May 27, 2009 12:00:00 AM PDT
The attorney for former California Senate leader Don Perata said Wednesday that federal prosecutors in Sacramento have decided against filing criminal charges against his client, clearing the way for Perata's campaign for Oakland mayor next year. Perata attorney George L. O'Connell told The Associated Press that he received a letter from federal prosecutors in Sacramento saying they would not press charges.

"It's good news for us that justice has been done," O'Connell said. "To me, that is a plain indication that they have reached the same conclusion that we have been urging for five years, that Senator Perata did nothing wrong and this is not a case that should be prosecuted."

The U.S. attorney's office had no immediate comment.

The decision comes 21/2 months after the U.S. attorney's office in San Francisco reached a similar decision in a political corruption probe that dates to 2004. FBI agents then took their case to Sacramento.

The investigation centered on whether Perata and his family benefited personally from campaign donations.

The decision ends a long-running drama that involved a man who had been among the most powerful players in California politics. A former high school civics teacher, Perata used his position as leader of the 40-member Senate to push an education-oriented agenda but also played the frequent foil to Republican Gov. Arnold Schwarzenegger.

He campaigned against the governor's successful redistricting measure in 2008 and is credited with killing Schwarzenegger's $14 billion health care overhaul in early 2008, saying it would burden taxpayers with billions in costs in just a few years. Perata's critics say he spiked the plan because he has long favored a single-payer, government-run system.

Term limits forced him from office last year.

O'Connell said Perata was unlikely to return a message seeking comment.

The case began in 2004, when federal agents raided the homes of Perata and his son, Nick. The son's political consulting firm had been paid tens of thousands of dollars from his father's campaigns.

The investigation widened and focused on Perata's relationship with campaign donors and whether any of that money was diverted to family members and eventually kicked back to him.

A federal grand jury in San Francisco subpoenaed six years' worth of e-mails from Don Perata and eight staff members in 2005.

It also investigated the circle of Perata family members and associates, including his son, daughter, son-in-law and a San Francisco Bay area lobbyist, Lily Hu, a former Perata aide.

FBI agents were looking for quid pro quos from political donations to Perata and whether the former lawmaker and his family profited personally from those donations. Some firms operated by family members received payments for political consulting from Perata campaign committees.

O'Connell said the accusations were baseless and that Perata never exchanged votes for cash.

Perata, 64, announced in March that he intends to run next year for mayor of Oakland, a long-troubled city that struggles with violence, drug-dealing and a high number of home foreclosures. The current mayor, fellow Democrat Ron Dellums, has not announced whether he will seek re-election.

The end of the investigation clears the way for Perata to mount a campaign without having to worry about a potential federal indictment and continuing legal payments.

In an indication of his mounting legal bills, Perata transferred $1.9 million from his initiative committee to his legal defense fund before he left office and received $450,000 from the California Democratic Party.

Attorneys for Perata and his son complained to the U.S. Department of Justice after prosecutors in San Francisco declined to file charges and the U.S. attorney's office in Sacramento took over the case.

They argued that a previous agreement with federal prosecutors in San Francisco to extend a statute of limitations did not extend to prosecutors in Sacramento.

Nick Perata, Lily Hu and others were not part of the review by Sacramento prosecutors, in part because they lacked jurisdiction for activity that was alleged to have occurred in the San Francisco Bay area. Don Perata spent years in Sacramento as a state lawmaker, first elected to the Assembly in 1996 and to the Senate two years later.

(Copyright 2009 by The Associated Press. All Rights Reserved.)

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