The Investigation 

How a vengeful ex-lover set the FBI on Don Perata.

Until their breakup, Frank Wishom and Lily Hu were one of Oakland's most recognizable power couples. Recognizable, in part, because they were an unusual-looking pair: He was a six-foot-four, 240-pound African American who played football in high school, while she was a petite brainiac from Taiwan, fifteen years his junior. They also were movers and shakers around town. He was a well-known businessman and entrepreneur, a man several city councilmembers called a friend. She was Oakland's top lobbyist, the person you hired if you really wanted something from City Hall.

Their annual Christmas parties attracted a who's who of Oakland politics to their stately Crocker Highlands home. Mayor Jerry Brown, Council President Ignacio De La Fuente, and Hu's old boss Don Perata all have been guests at the holiday bashes.

But by last year, the party was over. The breakup of their twenty-year relationship sent Wishom into an emotional tailspin. At one point, he even checked himself into a hospital for psychiatric observation. Compounding Wishom's grief over his lost love were his mounting financial and health troubles. Just three weeks before his 63rd birthday, he died a broken-hearted, angry, and desperate man.

But Wishom didn't take all his secrets to his grave. Or, rather, he didn't take all his ex-lover's secrets to his grave. Before his death, Wishom talked to the FBI about Hu's business dealings with local politicians. A year later, it now seems likely that the current federal investigation of Perata, the East Bay's most powerful politician, began with a tip from a jilted lover bent on revenge.

By the time Frank met Lily, he already had been married twice. He seems to have had no interest in figuring out whether the third time was the charm. Wishom and Hu lived together for more than a decade without getting married or having kids -- aside from their two Dalmatians. Still, friends say they referred to one another as husband and wife.

Married or not, Hu meant the world to Wishom. In his will, written in 1998, he left everything he had to her, snubbing his two grown daughters from his first marriage. But by the time he died, Wishom had little to leave except a mountain of debts.

Early on in their relationship, long before Lily Hu became an Oakland power broker, Wishom had the better business and political contacts of the two. He was a well-connected black businessman in a town with an entrenched black power structure. With Frank Tucker, Wishom formed F2 Technologies (F2, for the two Franks), an information and telecommunications technology consulting company. In the mid-'90s, the company boasted accounts with the city of Oakland, AC Transit, and the East Bay Municipal Utility District. According to court records, F2's accounts with Cable & Wireless and Northern Telecom alone grossed the company more than $30,000 a month. Wishom's longtime friend and business associate Jay McGrath says Frank was a top-notch consultant and an easy person to get along with. "He was charismatic, very articulate," he says. "Women were attracted to Frank like bees to honey."

In the early '90s, few people in political circles outside of Chinatown had heard of Lily Hu. She worked for Alameda developer Ron Cowan, who is now one of Perata's biggest campaign contributors. Her biggest claim to fame was being the first woman to serve as the president of the Chinatown Chamber of Commerce. Then, in 1994, she burst onto the local political scene. Community leaders including architect Yui Hay Lee recruited her to run for Oakland's new "Asian" council seat. Two years earlier, the district had been gerrymandered to create a 35 percent Asian plurality. Hu, however, moved into Oakland shortly before she made her run, a fact seized upon by her opponent, John Russo.

It quickly became apparent that Hu was in way over her head. "She was not known," says Lee, now a member of the city's Landmarks Preservation Advisory Board. "She hadn't paid her dues in the community." Nor did Hu have a grasp of the issues. When former San Francisco Bay Guardian columnist Steve Stallone asked her to discuss her agenda for social programs, Hu asked, "What's a social program?"

Wishom did what he could to help his partner win support in the black community: 100 Black Men, a mentoring group he was active in, hosted a well-publicized reception for Hu. He also helped her get the endorsement of Congressman Ron Dellums. Wishom regularly played golf with a Dellums aide, Stallone recalled in a recent interview. Despite Wishom's efforts, Hu lost by a two-to-one margin to Russo, now Oakland's city attorney.

Yet after her defeat, Hu proved herself both gracious and shrewd. Like many campaigns, the Hu-versus-Russo race had its nasty moments. Russo backers tipped off the press that Hu had inflated her educational credentials. She claimed to have a bachelor's degree in business from the University of Massachusetts Amherst. In truth, she had attended the college but hadn't graduated. Rather than hold a grudge against Russo after losing the election, Hu hosted a fund-raiser in Chinatown to help her erstwhile opponent retire his campaign debt. Lee recalls watching Hu chat up and charm the guests. Lee says that, while she wasn't much of a political orator, Hu could work a room.

Losing the council election turned out to be the best thing that could have happened to Hu. She may have started the campaign a political novice, but by the end she'd made important new contacts. One of them was Alameda County Supervisor Don Perata.

At the time, Perata's reputation as a political boss was starting to blossom. Insiders had begun talking about the "Peratistas," a group of Oakland City Councilmembers he had helped get elected: De La Fuente, Sheila Jordan, and Nate Miley. Yui Hay Lee says that during the campaign he and others arranged for Hu to meet with Perata, whom she didn't know at the time. During the pow-wow, Lee recalls that Perata, always preoccupied with the mother's milk of politics, asked, "Can she raise money?" Perata didn't endorse Hu, but she obviously made an impression: After Perata was elected to the assembly, he hired her to join his staff in 1997.

By the late '90s, Hu parlayed her relationship with Perata, the friendship she established with De La Fuente, and the contacts she made from Wishom into a role as an East Bay lobbying powerhouse. Hu possessed the perfect combination of sociability and charm. But ultimately, city hall sources said, she owed her success to Perata and De La Fuente. "You tell me how she got so good so fast after losing a city council race," one Oakland business leader said.

Councilwoman Nancy Nadel recalled that Hu's first big foray in Oakland politics was lobbying for a contract with the software company Oracle. A fat slice of the lucrative 1998 pact, which was designed to deliver Oakland's municipal computer system out of the dark ages, was carved out for Wishom's F2 company, one of the minority contractors in the deal. But Wishom didn't need his girlfriend's help: He had enough juice of his own to win a piece of the contract, De La Fuente said.

The contract itself 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 the Oracle debacle had no ill effects on Hu's lobbying practice. On the contrary, her influence seemed only to strengthen. It was not unusual to see her take a cigarette break outside City Hall with De La Fuente. And she accompanied city officials on at least one junket to China as they sought out pandas for the Oakland Zoo.

Some 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."

Whatever role Lily Hu played, hiring her paid off for some of the city's biggest development interests, including the DeSilva Group, Forest City, and Signature Properties. The DeSilva Group won approval in 2002 for its controversial plan to build more than four hundred 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.

Earlier this year, Hu even hauled in a land deal of her own. Property records show that she bought waterfront property along Tidewater Avenue in Oakland as a minority stakeholder in a pact with Port Commissioner Anthony Batarse Jr. and Ana Chretien, owner of ABC Security, which supplies security for City Hall and the Oakland airport. Chretien and Batarse, who is the owner of Lloyd Wise Auto Center, also are close friends with De La Fuente. They each put in $746,145, while Hu coughed up $373,222.

Hu and Wishom's fortunes were going in opposite directions by the final year of their relationship. Hu had become the primary breadwinner, and Wishom, who was in the throes of a financial meltdown, was relying upon her for "contacts and contracts," as one City Hall watcher put it. Wishom owed the IRS $111,000 for unpaid taxes, penalties, and interest going all the way back to 1985. Court records show he also had a $145,000 judgment from March 2002 hanging over his head stemming from a lawsuit filed against F2 by tech vendor Avnet Inc. Faye Coulter, one of Wishom's attorneys, says her client was planning to heed her advice to file for bankruptcy.

Christmas 2002 came and went without Lily and Frank throwing one of their famous holiday parties. Behind closed doors, their relationship had begun to fall apart; he moved out of their house at the end of May. Wishom would later insist in court that their decision to split after the New Year was mutual. Privately, however, he told an acquaintance that Hu had just awakened one morning and ended it. As many men often believe in such a situation, Wishom suspected there was another man.

On June 8, 2003, Wishom confronted Hu at the home of an Oakland doctor she was meeting for a dinner date. She told police Wishom followed her there; he later claimed he just happened to be driving by and saw her car parked out front. Wishom rang the doorbell and confronted the doctor and Hu, who he said looked "disheveled." Hu said Wishom got angry and threatened to "blow everybody up." Two days later, Hu got a call from Wishom's therapist, who warned her that her ex had expressed a desire to harm her. While the therapist didn't think Wishom would really hurt her, he felt he legally had to notify her.

Several sources say Wishom suspected that Hu had more than a professional relationship with Perata. He even speculated to friends and acquaintances that Hu dumped him on Perata's orders. One source recalled Wishom complaining, "Don Perata told her she had to let me loose because I was bad for business."

Some time after the breakup, Wishom called City Hall gadfly Sanjiv Handa looking for gossip on Hu. First, however, he wanted Handa -- who publishes a newsletter read by Oakland political insiders -- to assure him that he was on a secure phone line. Wishom then told Handa he had incriminating information on Hu. "He said he was fighting for what was due him," Handa recalls, "and if he didn't get it, he'd name names."

Wishom wanted money. According to Handa, Wishom had done some research on palimony cases and figured that Hu owed him a financial settlement. Court records make passing reference to a settlement, but don't spell out any details. At least three sources close to Wishom say he had been negotiating with Hu to get a six-figure financial settlement. Those sources say that in return she wanted Wishom to agree to stop spreading allegations about her business activities. And two sources said he told them he was hoping Perata would nab a technology contract for him in the state capital.

Exactly what Wishom intended to reveal about Hu is unclear. He told several people he had bank statements, and one source who saw them said Wishom claimed they showed that Hu made much more money from lobbying than she had reported. Wishom also claimed he had hired a private investigator.

In early September, Hu petitioned in Alameda County Superior Court for a restraining order against Wishom. She painted him as a jealous and unstable man who couldn't get over their breakup and had made threats on her life (which he denied), although he never actually struck her. Hu's court filing said neighbors had spotted Wishom driving by her house several times a week, and that he pestered her with unwanted phone calls. A male acquaintance also submitted a statement accusing Wishom of accosting him in an Albertsons parking lot, calling him a "motherfucker" and threatening to kill him.

Ensuing correspondence between Hu's and Wishom's attorneys indicates that Wishom threatened to publicly reveal his knowledge of an FBI investigation unless Hu would agree to a mutual restraining order. Hu's attorney Sally Elkington refused to budge, telling Wishom's attorney in a September 22, 2003 letter, "Ms. Hu is no longer willing to accept Mr. Wishom's bullying through his threats to 'expose' false information about her. My client is confident regarding her business activities. She has no reason to believe that the FBI is investigating her and she is not taking or giving any 'kickbacks.'" A few days later, Wishom made good on his threat and submitted a written declaration to the court in which he said the FBI was investigating Hu's "lobbying activities, and her activities with politicians." He also denied making any threats. In fact, Wishom claimed in court that he was the one who had been threatened in an anonymous phone call from a man who warned, "Keep your mouth shut or you will find yourself floating in the bay."

On September 26, Hu, Wishom, and their attorneys appeared in Judge Julie Conger's court and worked out a compromise. Hu got her restraining order, but Wishom could arrange through Hu's assistant to use their vacation home in Wilseyville or to pick up the Dalmatians for which they shared custody.

But those concessions turned out not to matter. Wishom died a week later.

Scores of friends and family members packed St. Benedict's Parish in East Oakland to mourn Wishom's sudden passing. The 62-year-old had gone into Summit Medical Center in Oakland for surgery on one of his legs, which had nerve damage caused by his diabetes. He died shortly thereafter of complications from the surgery and was cremated quickly.

Though Wishom had been ill and lost a lot of weight in the prior months, his death came as a shock to many of his friends and family members. Several of them said he appeared to be on the mend. "I saw him the day before, and he seemed to be in pretty good spirits," said his brother, Lonald Wishom. "He talked about how he was going to get out of the hospital and come play with my kids."

Father James V. Matthews, who had presided over Wishom's second wedding, gave the eulogy. "He was a serious, kind-hearted guy," he recalled later. "That was the Frank I knew." Supervisor Nate Miley and Oakland City Councilman Larry Reid both said a few parting words about their old friend. De La Fuente and Perata also showed up, as did Hu. In fact, Father Matthews says Hu worked with Wishom's relatives to plan the somber occasion. One mourner remembers Hu all red-faced and teary at the funeral. And why not? Despite their nasty breakup, they'd spent twenty years together.

Early last month, federal authorities executed a search warrant at Hu's office, attorney Doron Weinberg confirmed. A federal grand jury also has been convened, and the US attorney has sent subpoenas to an unknown number of businesses and agencies to turn over any correspondence and payments made to Perata, Perata's relatives, and his business associates, including Hu. On November 8, the Bay Area Rapid Transit Agency received a 33-page subpoena that identified 26 checks made to Hu from June 6, 2001 to December 1, 2003. The Oakland Tribune reported that the transit agency hired Hu to do political groundwork in the lead-up to a seismic bond measure going on the ballot. Several close Perata associates were involved with BART's recent earthquake bond measures. Voters approved the more recent one, Measure AA, last month.

Sources say investigators are seeking evidence of bribes or kickbacks funneled through others to Perata. In Weinberg's view, the whole probe began with an "unreliable source" -- Frank Wishom. "He was very upset when the relationship ended," the attorney says. "He acted a little bit irrationally, made threats ... and had been talking to the FBI." Weinberg said Wishom was also "looking for money" from Hu, although he wouldn't go so far as to describe it as blackmail. But just because a source has an ax to grind doesn't mean he has no useful information. The key is whether the source has any proof or objective evidence to back up his allegations. No one except perhaps Hu and the FBI knows for sure what, if any, proof Wishom had.

Weinberg says he believes the investigation will show that Hu has done nothing illegal or improper. And that might well turn out to be true. But while the grand jury investigation slowly unfolds, Oakland's top lobbyist will have to hope the whiff of scandal doesn't drown out the sweet smell of success. And even if the federal investigation doesn't result in an indictment of Hu, it won't necessarily exonerate her, either. In politics, appearances are everything; just the fact that Hu, who just turned 49, was the subject of an investigation could make her damaged goods. And if that's what happens, Frank Wishom will get what he wanted even without an indictment: To make the woman who broke his heart pay a price.


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