Thursday, December 14, 2006

Exclusive: Peralta Trustees May Be Targets of FBI Probe

By Will Harper
Thu, Dec 14, 2006 at 3:25 PM

When the Express broke the story on the FBI investigation of Oakland developer Alan Dones, a Peralta Community College District spokesman was quick to point out in a carefully worded statement that no district "employees" were targets of the probe. But the Express has learned that not everyone at Peralta is an employee. Thuy Nguyen, Peralta's general counsel, told the Express last night that the district's seven elected trustees are not employees. Nguyen said she couldn't comment as to whether that means trustees are targets of the corruption investigation. But an October 26 subpoena from a federal grand jury indicates that they are. Among other things, the subpoena demands records on conflict of interest rules for trustees and on board member William Riley's brother.

The subpoena sent to Peralta focuses on developer Alan Dones, Dones' companies, and his business partners. But it also asks for any records on Virtual Murrell, Riley's brother who was convicted in 1995 of one count of extortion for after shaking down a developer doing business with the city of Oakland. At the time of the crime, Murrell was an aide to Councilman Leo Bazile, no angel himself (see second item).

Dones, who denies any wrongdoing, says that he has hired Murrell in the past as a consultant, but didn't use him in his controversial 2004 proposal to redevelop land at Laney College that the grand jury is examining.

At a recess during last night's board of trustees' meeting, Riley said he had no comment on the FBI investigation and abruptly walked away.

Murrell made headlines several years ago for allegedly shaking down people who wanted to do business with the city of Oakland between 1989 and 1991 while he worked for Bazile. A federal grand jury indicted Murrell in 1994 for soliciting and taking $37,090 in bribes from developers and other businesses. The following year Murrell agreed to a deal with prosecutors and pleaded guilty to one count of extorting $750 from a developer. A federal judge sentenced Murrell to one year and one day in prison.

The Chron's Chip Johnson reported in 2001 that Riley arranged a curious meeting between Murrell and the district's purchasing manager. According to Johnson, Murrell suggested the district dump its relatively new computer system and replace it with his client's system. When the purchasing manager refused, Murrell ordered him out of the room.

Another clue that the feds might be looking at trustees is contained in the grand jury subpoena's final demand for records on the district's conflict-of-interest rules and "relevant education" provided to trustees on those rules since 2000.

At the time of the board of trustees' vote two years ago on Dones' re-development proposal for Laney College, critics questioned whether trustee Alona Clifton had a conflict of interest that should have precluded her from voting.

Clifton is president of a nonprofit created to partner with one of Dones' two firms for the construction of a county social services facility in Oakland's uptown.

Around the time of the Dones-Laney controversy, Clifton said she had no conflict of interest. A December 2004 legal opinion by Nguyen, the district's general counsel, back up Clifton's assertion. Clifton also sought advice from the state Fair Political Practices Commission, which opined that even if she received income as president of the nonprofit, she wouldn't have a conflict voting on Dones' proposal at Laney.

Due to all the surrounding controversy, Dones eventually withdrew his plans for Laney.

Clifton hasn't returned phone calls seeking comment. Since losing her re-election bid last month to Abel Guillen, Clifton has been missing in action. She was a no-show at last night's meeting-- scheduled to be her last�during which Guillen was sworn in.

Back to 92510, the East Bay Express news blog.

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