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Perata transformed his Leadership California Committee into Hope 2010 last year, with the specific intent of supporting a statewide cancer-research measure that would coincide with his 2010 run for mayor. Hope 2010 began this year with more than $700,000 in the bank, most of which was leftover from Leadership California. Perata originally called this committee "Rebuilding California," and set it up to finance the statewide infrastructure bond measures in 2006.
The official address for Hope 2010, according to the mailer, is 502 Oakland Avenue in Oakland. That's also the official address of Perata's mayoral campaign headquarters. Kinney said that "it's more cost effective" to run both campaigns out of the same headquarters. He said that the mayoral campaign pays for two-thirds of the office, and Hope 2010 pays for one third. During a recent visit to 502 Oakland Avenue, there was a small sign on the door advertising Perata's mayoral campaign, but no mention whatsoever of Hope 2010.
The apparent use of money from one campaign committee to advance the goals of another has prompted state ethics investigations in the past. The Fair Political Practices Commission has examined similar situations involving both Governor Arnold Schwarzenegger and former Lieutenant Governor Cruz Bustamante. Allegations that Schwarzenegger used 2006 ballot-measure committees to help his reelection campaign eventually led to tighter state rules. Meanwhile, the Fair Political Practices Commission sued Bustamante, alleging that he had illegally transferred funds from a committee with no donation limits into his 2002 gubernatorial committee and paid for expenses in his governor's campaign out of committees with no fund-raising or expenditure limits. In 2004, Bustamante agreed to pay a civil fine of $263,000, the largest ever resulting from a commission action.
State law prohibits Perata from using Hope 2010 to fund his mayoral campaign, according to Roman Porter, executive director of the state Fair Political Practices Commission. However, because the mailer doesn't specifically mention his mayoral bid and only talks about the cancer-research initiative, it may not technically violate the law. Still, there's no doubt that the mailer will help his public image.
Setting aside the legal propriety of Perata's actions, the mailer itself appears to be a questionable use of money by one of California's savviest politicians. "Don Perata has run many statewide ballot-measure campaigns," said Consumer Watchdog's Heller. "And so the idea that you would do this now with a mailer makes no sense — unless there is another political purpose for it."
Committees like Hope 2010 typically exist to do two things: raise money and help with campaign advertising. But there is almost no evidence of fund-raising and it's too early for advertising, which raises questions about what Perata's campaign consultants are being employed to do.
Finance records show that the cancer committee received only two outside donations during the last six months of 2009. One $10,000 contribution came from Perata's longtime friend Ed DeSilva, who has been his single-largest campaign contributor over the years and who can be counted on to write a big check anytime he launches a new endeavor. And the other donation, also for $10,000, came from Richard Lee, the founder of Oaksterdam University — right around the same time that Perata announced his endorsement of Lee's statewide pot legalization measure.
Yet the committee has spent more than $200,000 on consultants, including $25,000 to Oakland Councilman Ignacio De La Fuente, who is one of Perata's oldest friends and closest allies. Hope 2010 also spent $100,000 on three consultants who also are on Perata's mayoral campaign payroll.
The primary committee established to fund the cancer-research measure is known as "Californians for a Cure," and was created by the American Cancer Society, the American Lung Association, and the American Heart Association. The leader of Californians for a Cure, American Lung Association of California Vice President Paul Knepprath, said in an interview that Perata's campaign staffers have not played a role in their efforts. And as for Perata himself, Knepprath praised the state senator for coming up with the idea for a 2010 ballot measure and being "a cheerleader for it." But Knepprath said Perata has not played an active role with Californians for a Cure. Hope 2010 was the largest donor to Californians for a Cure, however, contributing $150,000 to the committee last year.
Yet despite having not much to show for their work on the cancer-research initiative, Perata's campaign consultants have been paid well by Hope 2010. For example, Tiffany Whiten, who worked on his senatorial staff, received $16,250 from the committee in the second half of 2009. And Christina Niehaus, who has worked on previous Perata campaign committees, received $11,950. Longtime Perata staffer Chris Lehman was paid nearly $72,000.
Whiten, Niehaus, and Lehman also have been working on the mayor's race, which held numerous fund-raisers and campaign events in 2009, and received $115,000 in donations. Yet even though Whiten and Niehaus appeared to have done more in that campaign, they were paid about the same as what they received from the cancer-research committee, raising questions about whether it has been subsidizing their work on the mayoral race. Perata's mayoral campaign, for example, paid Whiten $13,000, and Niehaus racked up $18,000 in fees in 2009.
Kinney said Hope 2010 has been heavily involved in legal and policy research for the initiative. He said Niehaus did "administrative work" for Hope 2010 last year, but now is employed exclusively by the mayoral campaign. And he said Whiten splits administrative duties between both committees.
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