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While questionable, Perata's payments to these campaign consultants may be legal under another gray area of campaign finance law. The law does not specify how much work a consultant needs to perform in order to get paid. Thus, there may be nothing to stop Perata from paying these consultants less money from his mayoral campaign, even though they may do more work for it. In addition, there appears to be no legal prohibition preventing the consultants from working on both campaigns at the same time and at the same events, because they can be paid on retainer and not for actual hours worked or for specific tasks accomplished.
In short, Perata's decision to pay his consultants large fees for little apparent work on the cancer-research committee may be giving him another leg up in the Oakland mayor's race.
Perata's use of cancer-research funds to eat at upscale restaurants and stay at expensive hotels also provides more evidence that his committee doesn't appear to be a genuine effort to find a cure for cancer. For example, one of his new favorite haunts appears to be Le Rivage, a hotel and restaurant on the Sacramento River in the state's capital. He charged at least two meals totaling $668 from Le Rivage to the Hope 2010 committee last year, and labeled them "fund-raising."
Typically, when politicians raise funds, they receive campaign donations either at a specific event or shortly thereafter. But none of the many restaurant meals that Perata charged to Hope 2010 last year and called "fund-raising" appear to have actually resulted in donations to the committee. For example, he has charged at least four meals at Adesso in North Oakland, totaling $1,070, and labeled them "fund-raising," even though the committee recorded no donations on the dates of the meals or in the weeks afterward. Same with a $230 meal at Trader Vic's in Emeryville.
Kinney called the meals "legitimate" and said they involved "prospecting" about future fund-raising efforts. But finance records show that Perata also took care of his reading needs using the Hope 2010 committee, charging $222 at Books Inc. in Alameda and $670 at Diesel bookstore in Oakland. Plus, he spent $886 on his subscription to The Economist magazine.
One of the candidate's largest single expenditures was a late-July stay at the Inn at Spanish Bay in Pebble Beach, a posh resort overlooking Monterey Bay and the Pacific Ocean. He spent $663 for the getaway, and again labeled it "fund-raising." Kinney also called this expenditure "legitimate," even though the committee received no outside donations until Lee's contribution, three months later.
Perata can't blame anyone for mislabeling these expenditures, because as the official treasurer of Hope 2010, it is his legal responsibility to make sure they're accurate.
Indeed, the commingling of Perata's two campaigns appears to confuse even the candidate himself at times. At the end of the year, for example, he spent $447 on a "meeting" at Miss Pearl's Jam House in Jack London Square out of Hope 2010 funds. But then he subsequently noted on his campaign finance reports that the mayoral campaign should have paid for the meal.
The most potentially significant ramifications from Perata's use of the cancer-research committee could be on the Oakland mayor's race. As this newspaper reported last week, Perata's main opponent, Councilwoman Quan, had more money in her mayoral campaign account at the end of last year than the former senator had in his. But if Perata continues to use the cancer-research funds to enhance his image and keep his mayoral consultants well paid, then Quan will surely be at a disadvantage.
Some local good government advocates also worry that other potential candidates will be afraid to jump into the race knowing that he has the committee's money literally at his fingertips. "If I were a candidate and I knew that my opponent has control of an account with more than $700,000 in it that he can use to promote his image around town, that would concern me," said Ralph Kanz, former president of the Oakland Public Ethics Commission.
Perata also stands to benefit from a recent recommendation by City Attorney John Russo to raise the total expenditure limit in the mayoral campaign from $379,000 to $758,000 this year. As this newspaper and others noted last week, Russo's proposal would help Perata because his mayoral campaign had already burned through more than $100,000, primarily on consultants. And if the council were ultimately to reject Russo's recommendation, it would hurt Perata because he would be allowed to spend only about $270,000 this year from his mayoral account. By contrast, Quan is running an almost all-volunteer effort and has spent only about $7,000 so far, while raising more than $66,000. That means she and other potential candidates can still spend more than $370,000 before election day under the current rules.
Russo's proposal and the presence of the cancer-research committee also could undermine Oakland's new voting format, which will go into effect this year. One of the primary goals of ranked choice voting is to encourage more candidates to enter the political process. But if they're concerned about having to raise lots of money just to keep up with Perata, then they may choose to stay out of the race, thereby giving him a clearer shot at the mayor's office.