Over the past decade, state Senator Don Perata has come to be known as "The Teflon Don," based upon his ability to weather criticism of questionable financial transactions without anything sticking to him. Time after time, Perata has emerged from controversy stronger than ever. He is the unquestioned leader of Oakland's Democratic political machine, and is weeks away from taking over as president of the California Senate.
But now, sources say, the Teflon may be starting to show some deep scratches. The FBI is reportedly targeting Perata in a federal grand jury investigation that focuses on an influential Oakland lobbyist who also happens to be his former aide.
Few people outside of Oakland City Hall may have heard of her, but Lily Hu, 48, is known to insiders as the city's top lobbyist. She has been one of Perata's closest confidantes for years, and her client list includes many of the biggest developers in town. For the past half-decade, it's been widely suspected in City Hall circles that Hu will not accept a client without first obtaining Perata's blessing. As a result, some city officials believe that if they oppose the plans of a Hu client, they risk angering Perata, who is the top fund-raiser in the East Bay and has political allies throughout the city and Alameda County.
Rumors have long persisted that there was more to Hu's lobbying business than simple campaign donations and phone calls to public officials. Then last year, the FBI learned of allegations by Hu's former boyfriend, Frank Wishom, that Hu was taking kickbacks. In court documents filed in a civil dispute Hu brought against Wishom in September 2003, the lobbyist denied receiving kickbacks, as she indicated that he had alleged. But before anyone could build a case around Wishom's allegations, he died suddenly at Oakland's Summit Medical Center in October 2003 after suffering complications following leg surgery.
In recent months, however, Wishom's former girlfriend has been under scrutiny by the FBI. Although FBI spokeswoman LaRae Quy would neither confirm nor deny the existence of such an investigation, three high-placed sources said the agency is investigating Hu and appears to be targeting Perata. Two of those sources said a federal grand jury has been impaneled and is taking testimony.
As for Wishom? In spite of Hu's allegations that her former boyfriend was harassing her, the 62-year-old diabetic had not changed his will before his death, leaving Hu in charge of his estate. Sources said Wishom's funeral was a well-attended affair that included an appearance by Perata himself.
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