Undercurrents: Despite Federal ‘Clearance,’ Perata Deals, Finances Remain Murky

By J. Douglas Allen-Taylor
Thursday February 25, 2010 - 08:55:00 AM

Two weeks ago, the East Bay Express’ Bob Gammon wrote an excellent article revealing some odd financial mingling between the campaign of former state Senate leader Don Perata for mayor of Oakland with Mr. Perata’s project to put an initiative on the statewide California ballot taxing cigarettes to benefit cancer research (“The Cancer in the Oakland Mayor’s Race,” Feb. 10.) 

As part of his story, Mr. Gammon discovered that two campaign consultants for Mr. Perata’s Oakland mayoral race—Tiffany Whiten and Christina Niehaus—were also working as consultants for Hope 2010. Mr. Gammon wrote that Ms. Whiten and Ms. Niehaus received about the same amount of money apiece from both the Hope 2010 (statewide campaign) and Perata mayoral committees, “interviews with campaign figures and Perata’s own finance reports reveal little evidence that the highly paid consultants are doing much work on behalf of the cancer-research initiative.” On the other hand, Mr. Gammon said, Ms. Whiten and Ms. Niehaus “have played prominent roles in [the Perata] mayoral effort.” 

Mr. Gammon contended that Mr. Perata’s statewide initiative money ap-peared to be partially subsidizing two of his consultants for their mayoral campaign work in a manner that appeared to be an attempt to get around Oakland’s election finance limitations. In other words, Mr. Perata appeared to be gaming the system, using slippery bookkeeping and office practices in order to pump more money into his mayoral campaign than the law allowed. 

There was one small bit of oddity about the Perata financial disclosures that Mr. Gammon may have missed, however. 

In a Sept. 17, 2009 Oakland Tribune article on the Oakland mayoral race (“Quan Eyes Oakland Mayoral Run”) a man named Bruce Goddard appeared as a spokesperson for the Perata Oakland mayoral campaign. Asking the Perata mayoral campaign to comment on the possible Quan mayoral candidacy, the Tribune wrote that “Bruce Goddard, a Perata assistant, said Perata has been raising money and going door-to-door this summer. Goddard declined to discuss Quan’s intentions of joining the race. ‘[Don Perata has] made it clear what he’s going to do,’ Goddard said. ‘He’s going to run for mayor.’” 

The oddity? Well, I can’t seem to find Mr. Goddard having been paid by the Perata Oakland mayoral campaign for work as a Perata mayoral campaign spokesperson. That name is not listed in the most recent (July-December 2009) “Believe in Oakland—Perata for Mayor 2010” recipient committee campaign statement filed with the City of Oakland, nor is he listed on the staff of the two campaign consultant firms that were paid by Mr. Perata’s mayoral campaign during that time, Tramutola LLC and Whitehurst/Mosher Campaign Strategy and Media. 

The name Bruce Goddard does, however, appear in the list of consultant payees turned in by Mr. Perata’s statewide initiative finance committee, Hope 2010, to the California secretary of state’s office. According to that filing, someone named Bruce Goddard received $12,400 for campaign consultant work from Hope 2010 on Aug. 31, 2009, $6,000 on Nov. 4, $6,000 on Dec. 4, and $6,000 on Dec. 8 for a total of $30,600 between August and December of last year. That was in the same period, which we noted earlier, that someone named Bruce Goddard was acting as a media spokesperson for Mr. Perata for the Oakland mayoral campaign. 

Perhaps there is a reasonable explanation for all of this, and Mr. Perata was not paying his mayoral campaign staff out of his statewide initiative funds. But keeping up with Mr. Perata’s Byzantine and convoluted financial transactions is a wearing job, so I’ll leave that up to the professionals like Mr. Gammon, or hope that the Perata campaign—mayoral or statewide—will come forward with an explanation on their own. 

But whether this was a deliberate violation of Oakland’s campaign finance laws, or merely inadvertent, or else a case of the Perata camp skating as close to the line between legality and illegality as they figured they could get, it revives thoughts of Mr. Perata’s patterns and practices and personality that ought to raise troubling questions for Oakland voters who will soon be asked to turn over to him the keys to City Hall. 

Last May, after federal prosecutors dropped a five year corruption probe against Mr. Perata and several of his family members, employees, and associates, the former state Senator released a public statement saying that the ending of the investigation amounted to “full vindication.” “This is a complete affirmation of everything I’ve maintained for the last five years—that I’ve acted appropriately in both my professional life and my career in public service,” the San Francisco Chronicle quoted Mr. Perata as saying. (“Feds Drop 5 Year Probe of Perata—No Charges” May 28, 2009.) 

But that would seem to miss the point, wouldn’t it? 

As far as we can determine from the public record, the federal probe of Mr. Perata concentrated on allegations of whether or not he received illegal kickbacks from various deals made involving his family members, employees, or political or business associates. But regardless of whether they were illegal or not, Mr. Perata’s actions surrounding Oakland development or government deals, for example, have a troubling public policy air to them. Witness what the East Bay Express had to say in 2004 about Lily Hu, the Oakland lobbyist and close associate of Mr. Perata who was one of the prime targets of the federal investigation. (“The Investigation—How a Vengeful Ex-Lover Set the FBI on Don Perata,” Dec. 8, 2004, Will Harper and Bob Gammon.) 

“East Bay lobbying powerhouse … ow[ing] her success to Perata and [Oakland City Councilmember Ignacio] De La Fuente.” 

Ms. Hu, according to the Express article, successfully lobbied the city of Oakland to purchase its citywide computer system from the Oracle software giant, but “[t]he contract … was a disaster for Oakland. The Oracle system crashed constantly, and just before the 1999 holiday season, the payroll system failed to cut paychecks for hundreds of city employees. To top it off, the contract’s price tag skyrocketed from the original $14 million to about $25 million.” 

But Ms. Hu was no disaster for her clients. “Hiring her paid off for some of the city’s biggest development interests,” the Express article continued, explaining that she had a hand in some of the biggest, and most controversial, Oakland development deals of the last several years “including [deals with Oakland by] the DeSilva Group, Forest City, and Signature Properties. The DeSilva Group won approval in 2002 for its controversial plan to build more than 400 homes in the flood-prone Leona Quarry despite fierce opposition from local residents. Forest City stands to pocket a $60 million subsidy when it erects seven hundred apartments near downtown in the next year or two. And Signature Properties netted a $30 million discount when it purchased sixty acres of Oakland waterfront from the port to construct three thousand condos.” 

The Express article said that the lobbyist, while she put through powerhouse deals for high-roller clients, was no powerhouse herself, reporting that “[s]ome Oakland insiders came to believe that Hu would not take on a client without first obtaining Perata’s blessing. ‘It became known that if you wanted to do business in this town, you had to hire Lily Hu,’ said one high-placed Oakland business source. But apparently her success was not based upon her expertise on the issues, two city sources said. ‘It struck me how little she knew about what her clients wanted,’ one said. ‘Basically, she would introduce her clients and then sit there.’” 

These deals may seem exciting to some—and the way for Oakland to be developed—until you look at the details. 

The neighborhood complaint was that the DeSilva Leona Quarry homes are built on a hundred-year-old quarry site in an area historically prone to flooding, and worried that the development could cause the unstable quarry area to collapse and slide buildings and land down onto Highway 580 just below. Their concerns caused a Superior Court judge to temporarily halt the project—following the Oakland City Council’s approval after lobbying from Ms. Hu on behalf of the DeSilva company—because he felt the city’s environmental review had been inadequate and rushed through. 

Mr. Perata, working hand-in-hand with then-Mayor Jerry Brown, managed to get the uptown Forest City project to escape any environmental review whatsoever by passing state legislation exempting downtown Oakland development from California Environmental Quality Act scrutiny during the years the Forest City buildings were being put up. 

All of these actions surrounding Don Perata-involved activities may be perfectly legal—if you get state legislative or City Council official approval for something, that’s the very definition of being legal—as may be the shifting of money from Mr. Perata’s statewide cigarette tax initiative to his Oakland mayoral campaign. But to paraphrase Paul Newman in Cool Hand Luke, saying it’s legal don’t make it right. And that leaves the question of is this the way Oakland residents want Oakland government to operate? 

Federal investigators “cleared” Mr. Perata of violating federal law when they ended their five year investigation and declined to prosecute. But the Perata deal-making and money-making practices remain murky, indeed, and require a more complete explanation from Mr. Perata if he wants to be Oakland’s mayor.