My Fair Lady 

Don Perata helped raise Sandra Polka from debt and into a position of wealth and power. The big question is why? Campaigning the Perata Way: Second of two parts

Don Perata just wanted his gal to get paid. Early in 2006, the state senate leader sent word to Tom Umberg, a three-term Southern California assemblyman who was running for the Senate: Hire Sandi Polka as a campaign consultant and you'll breeze through the June primary. But Umberg declined the offer and it cost him, according to two knowledgeable Sacramento sources. A year later, he was out of politics.

Rather than support Umberg, Perata secretly backed Lou Correa, an Orange County supervisor. Sandra Polka did the dirty work. She was hired by the innocuous-sounding political action committee Californians United — which is funded heavily by Perata's top campaign contributors — and proceeded to engineer vicious attack ads targeting Umberg. These included two mailers exploiting an extramarital affair the assemblyman had admitted to. The hit pieces, one titled "A Cruel Man," lifted quotes from distraught e-mails Umberg's wife had sent just after she learned of his infidelity.

Umberg claims that Perata asked him to drop out of the race after the mailers were sent. But the former federal prosecutor again refused. So, over the next few months, Californians United and two other PACs associated with Perata spent more than half a million dollars to defeat Umberg in the primary. Correa won in a landslide, and then took the 34th Senate District seat last November.

Over the last year, Perata has quietly involved himself in a number of electoral campaigns in which he seemed to have no political stake — indeed, races in which the outcome appeared irrelevant. Why did Perata get involved in the campaign against Umberg? The official reason, according to Perata's supporters, was that Umberg's affair and his liberal politics made him unelectable in conservative Orange County. They also claimed that, if elected, Umberg had planned to back a more liberal senator to unseat the moderate Perata as Senate president pro tem.

But two knowledgeable Sacramento sources claim that Perata had another reason for running his own candidate in the race. It evidently wasn't Umberg's politics or his affair. Instead, they said, the senator's overriding concern was to make sure campaign money was flowing Polka's way. "He sent a message that Umberg should fire Richie Ross," one of the sources said. "And he should hire someone more amenable to him ... such as Sandi Polka."

Perata has issued similar ultimatums to other Democratic legislators, according to two sources unfamiliar with the details of the Perata-Umberg dispute. If the candidate refused to hire Polka, or worked with people Perata didn't approve of, the senator would no longer side with them. Just ask Correa; earlier this year, Perata locked the freshman senator out of his own capitol office because Correa had attended a fund-raiser the boss hadn't authorized.

The common thread uniting most of these cases appears to be Perata's desire to secure consulting business for Sandra Polka. Public records show that political committees associated with the senator paid her $302,379 last year for work on four such legislative primaries, three of which she lost.

Those defeats don't seem to have affected Polka's business. In fact, she has emerged over the past two years as one of the state's highest-paid political consultants, charging some PACs $16,000 a month just to keep her on retainer. In all, campaigns controlled by or associated with Don Perata have paid her at least $1.41 million over the past three years.

Polka and Perata, meanwhile, have become inseparable. Sacramento sources say she won't take a client without the senator's blessing, and that it's common for him to stroll into her office across from the capitol dome two or three times a day. Since the FBI began a federal corruption probe of Perata's financial and professional relationships with his best friend, Tim Staples, and his son, Nick Perata, Sandi Polka has replaced those two men as the senator's main beneficiary. "They're attached at the hip," one knowledgeable source said. "You don't get much tighter than they are."

But the relationship is mysterious: Why would the state's most accomplished backroom politician, a power player who plays to win, cozy up to a small-time political operative with a mediocre track record? And why is he so keen to steer business her way? Neither Polka nor Perata would comment for this story, but this much is certain: Polka owes everything to the senator. It was he, after all, who helped lift the intensely secretive, fiercely loyal sixty-year-old woman out of debt and into a position of wealth and power.


When Sandi Met 'Tony'

Six years ago, when Don Perata first took Sandra Lynn Polka under his wing, she was bankrupt and married to an out-of-work janitor. During the 1990s, according to public records, she and her husband, John Barr, ran up a mountain of debt and fell so far behind on their taxes that in 1995 the IRS placed two liens on their home, totaling more than $47,000. Two years later, a bank sued them for running up their credit card and not paying the bill. In August 1997, they filed for bankruptcy, listing debts of nearly $153,000.

At the time, Barr was a maintenance man at the Auburn Journal, a small newspaper in the Sierra foothills, and the couple lived in a three-bedroom, two-bath home just off Highway 49 outside Grass Valley. The house, which they bought for $197,000 in 1991, sat on ten acres at the end of a dirt and gravel road. Behind a gated fence, they tilled the land, raised donkeys, and mostly kept to themselves. One neighbor said recently that he saw Polka only on her way to and from work, speeding by in her car.

Some people who know Polka describe her as a loner with a searing temper. "She doesn't like anybody in Sacramento," one Sacramento source said. "She's very aggressive, very rough around the edges," another added.

By 1998, Polka's fortunes began to change. She landed a job as a mid-level aide to John Burton, the San Francisco Democrat who preceded Perata as Senate president pro tem. Having once worked for Richie Ross, a prominent political consultant with whom she'd had a nasty falling-out, Polka had some campaign experience and quickly gained Burton's trust. The next year, Burton's good friend Willie Brown hired her to help with his San Francisco mayoral reelection. Then, in 2000, Burton put Polka on his powerful Senate Majority Fund committee, which he used to get his Democratic allies elected. Perata donated $100,000 to the fund that same year — greasing the skids for Burton to appoint him Senate majority leader two years later.

The Perata-Polka relationship began to blossom in 2001. When she launched her own consulting company out of her home, Polka's first client was Tim Staples, Perata's old college buddy. At the time, Staples also was the sole client of Perata's consulting firm, Perata Engineering. The senator also put Polka on his reelection campaign payroll that year, and she worked on redistricting with Perata, who headed the Senate's redistricting committee.

As Perata and Polka's bond grew tighter, Polka's marriage unraveled. In March 2001, she sued Barr for divorce, citing irreconcilable differences. He had been out of work for two years, and despite her jobs with the state's most powerful political leaders, the couple was still smothered in debt. That July, she told the court her monthly expenses for 2000 were $4,858 — nearly twice her monthly take-home income of $2,951.

Judging from the divorce records, Polka seemed bent on extracting everything she could from the marriage. She demanded custody of the couple's three donkeys, the rototiller, two Chinese rugs, and a 1993 Taurus wagon. Despite her debt, she somehow hired a lawyer, and appeared ready to take Barr to trial.

In late 2001, however, Polka suddenly came into money and closed the books on her troubles. She paid off her creditors, the IRS, and her husband. In the divorce settlement, she got the house and everything else she asked for. In return, she paid Barr, who could not afford an attorney, $10,000. He packed up the rest of his belongings and moved across the highway to slot nineteen of a small, squalid trailer park, which on a recent visit was full of empty beer cans and barking dogs.

As Barr's fortunes plummeted, the senator made sure Polka's star was on the rise. "She found in Don Perata," said one Sacramento source, "the Tony Soprano she's always been looking for."


The Money Train

Sandi Polka's career really began to take off in 2002. Perata put her on his statewide campaign to overturn term limits, where she joined Tim Staples and Nick Perata on the payroll. The elder Perata faced term limits in 2004, and although voters soundly rejected his ballot initiative, the senator's friend, then-Attorney General Bill Lockyer, subsequently issued a favorable opinion that let Perata stay in the Senate through 2008.

Polka, who was still on Burton's payroll, picked up two new consulting clients in 2002. BART hired her to do "public outreach" in anticipation of a bond campaign, while the City of Oakland retained her to spearhead its own redistricting based on the 2000 Census. Polka's contract — $110,000 — raised some eyebrows. By contrast, San Francisco, with eleven legislative districts to Oakland's eight, paid its own redistricting consultant $61,000.

Polka's no-bid deal with Oakland was engineered by City Council President Ignacio De La Fuente, Perata's closest East Bay political ally. At the time, De La Fuente touted Polka's experience with statewide redistricting. Ultimately, though, the council mostly ignored her work and adopted a redistricting map assembled by De La Fuente and Councilman Larry Reid. "She was asking questions about our preferences, just doing minor tweaks to the districts," recalled Councilwoman Nancy Nadel, who said she viewed Polka as yet another instance of the city overpaying for politically connected consultants.

As the year ended, Perata took over as Senate majority leader, Burton's number two. While his rise to power would prove a boon for Polka, his son Nick Perata was still reaping most of the benefits. The younger Perata received $159,310 from campaigns associated with his father in 2002, compared to Polka's $31,382.

But Polka saw firsthand how much money there was to be made by partnering with the senator. In May 2003, she quit her Burton gig to consult full-time. She opened an office near the statehouse; her partners included Tim Staples' son Sean, and Michael Rosati, husband of the senator's daughter Rebecca Perata-Rosati, according to a 2005 San Francisco Chronicle story. Polka's move paid off. By November, she had surpassed Nick on his dad's reelection campaign payroll, pulling in $5,000 a month in consulting fees, public records show.

But Polka had yet to experience a hard-fought political campaign until 2004, when Claudia Alvarez, a moderate Santa Ana councilwoman, challenged the liberal Umberg for state Assembly. Alvarez paid Polka $40,000, but the team proved no match for Umberg and Richie Ross in the March primary. "She was very bitter about that loss," one Sacramento source said of Polka. "She started telling people that there was no way Umberg would ever be elected to the Senate."

The defeat didn't appear to faze Perata. That July, he increased Polka's monthly retainer to $7,500. By fall, four PACs had hired her to assist two of his legislative allies from the Central Valley with their reelection campaigns. Polka grossed $146,385 in a matter of months as Mike Machado was reelected to the Senate and Nicole Parra retained her seat in the Assembly. Perata's own reelection, of course, was never in doubt.

As 2004 drew to a close, Polka's luck was about to get even better thanks to the senator — and the FBI.


Lowbrow Politics

It's unclear why a committee that runs Democratic voter registration drives throughout California needed a bare-knuckled operative like Sandi Polka. Apparently not for her fund-raising skills. Perata is one of the most prodigious fund-raisers in the state, but some people who know Polka say she detests cocktail parties and political schmoozing, and rarely attends large donor parties — the very traits most prized among political consultants.

Nonetheless, the Voter Registration and Education Fund started paying her $16,000 to $18,500 a month in early 2005, and continued the payments at least through the end of 2006. Suddenly, Polka's retainer fees were on par with those of Richie Ross and Gale Kaufman, widely regarded as California's two top political consultants. This was all Perata's doing, according to two Sacramento sources. "She's determined to be the most powerful consultant in California, but she can't do it without Don," one source said. "She doesn't have the talent, she doesn't have the charm, she doesn't have the ability."

But Polka, according to sources who know her, does possess qualities Perata covets: She's unfailingly loyal, and carries out his wishes without question. In 2005, for example, the voter registration fund spent $1.96 million — money raised to register voters — on one of the senator's pet projects: defeating Governor Schwarzenegger's attempt to wrest control of state redistricting from the legislature. Later that year, Perata put Polka on Rebuilding California, a committee he established to raise money for the $20 billion statewide transportation bond he would push the following year. As the 2006 election cycle revved up, the senator added more campaign work to Polka's résumé. In the process, he involved himself, for the first time, in state-level campaigns that pitted Democrat against Democrat, even though the outcomes did not appear to affect his political interests or power base. Perata made his moves quietly; the funds were directed through little-known PACs, a strategy that ensured that few would know what he was up to. "The purpose was to make money, not to win elections," said one knowledgeable Sacramento source.

The big money, apparently, was in Southern California. In addition to the Umberg-Correa race, Polka was hired to help elect Glendale City Councilman Frank Quintero. In that case, her benefactor was the California Latino Leadership Fund, an Oakland-based PAC controlled by Perata associate Robert Apodaca, who also is involved, according to one Sacramento source, in the Voter Registration and Education Fund. The Latino Leadership Fund paid $49,800 to Polka and launched mean-spirited attack ads against Quintero's opponent, Burbank school board member Paul Krekorian.

In robocalls and hit-piece mailers, the ads asked: "What does Paul Krekorian have in common with a convicted terrorist? Plenty." The allegation, however, was bogus. The ads asserted that Krekorian, who is of Armenian descent, had received an endorsement from the Armenian National Committee, a group that once gave an award to a man who later pled guilty to weapons charges, and who the FBI said was linked to an Armenian terrorist group. But there was no evidence that the Armenian National Committee knew of the weapons crimes, let alone endorsed them. Nor was there evidence that Krekorian had any knowledge of it.

Polka's ads totally backfired. "She's not the smartest tactician in town," one Sacramento source said. Another put it more bluntly: "People were horrified about what she had done." The ads engendered a strong backlash and spurred an outpouring of sympathy for Krekorian. Even Quintero, the man Polka was hired to elect, denounced them.

Before the ads hit the streets, Quintero had been considered a friend of the Armenian community. But the mailers ruined his reputation, and Krekorian trounced him 58 percent to 42 percent in the June primary. When asked last year about the California Latino Leadership Fund, Quintero told the LA Weekly, "You mean the group that completely fucked up my campaign and fucked me up with all my friends?"

Polka's failures didn't end there. She collected $175,016 for two other losing races. Bill McCammon, a former Alameda County fire chief, hired her as a consultant for his East Bay Assembly campaign. But they couldn't beat political neophyte Mary Hayashi, who had hired Richie Ross. In Southern California, meanwhile, Polka was hired to help ex-Assemblyman George Nakano, who was up against Assemblywoman Jenny Oropeza in the Democratic state Senate primary. But Oropeza cruised to victory and is now in the Senate.

Polka's benefactor in that race was the California Real Estate Independent Expenditure Committee. Perata's association with this PAC is more tenuous than his connections to Californians United and the California Latino Leadership Fund. The same is true about his association with two other independent committees that hired Polka in 2004 — the California Dental Association Independent Expenditure Committee and the California Agribusiness Independent Expenditure Committee. But hiring Polka is a de facto Perata association. When a committee hires Polka, according to multiple Sacramento sources, it's tantamount to receiving the senator's blessing, because she won't take a client without his permission (see sidebar "Free Associating"). Although Perata was careful not to publicly support a candidate in three of the four Democratic primary races Polka worked in 2006, Umberg smelled a rat in his own defeat. Just before the primary, he filed a complaint with the Fair Political Practices Commission alleging that Perata, Polka, and Correa had illegally conspired with Californians United. The PAC, which spent $509,345 and paid Polka $77,563 in defeating Umberg, is registered as an "independent committee," and by law cannot coordinate activities with a politician. Although Umberg's foes have denied the charge, the FPPC has yet to rule on the case.

Perata, however, has passed judgment in his own way. Last summer, as Umberg's last term was ending, Perata stripped the assemblyman's name from Umberg's final four bills. The message was clear: If you take on the Don, you'll regret it. Umberg, now a lawyer in the private sector, didn't want to talk about Perata's request that he hire Polka, or what happened when he refused, but he does believe the senator sought vengeance for the FPPC complaint: "I thought it was extremely petty that he would use the power of his office to retaliate against me for exercising my legal rights."

Petty or not, Umberg is out, and Polka is in. In 2006 alone, she grossed at least $760,873 from political campaigns. More than 68 percent of that money was for generic consulting fees — as opposed to, say, attack mailers. Beyond things like ads and mailers, state law does not require candidates or PACs to disclose specific details about what political consultants actually do to earn their money.


In and Out Also out are Tim Staples and Nick Perata, who used to rake in cash from the Perata money train. From 2000 through 2004, the senator's various campaigns and those closely associated with him cut checks to Staples and the son for at least $1.56 million in all. Nick Perata collected more than $1.2 million of that. Perata's daughter, Rebecca Perata-Rosati, also got in on the action, taking in $70,699. "His family, they all had to be taken care of, they had to be hired as vendors," one Sacramento source explained.

But that changed abruptly in the fall of 2004. On November 3, the day after the general election, the FBI and a federal grand jury began serving subpoenas that revealed a public corruption probe against the senator. On December 15, the feds raided the Oakland homes of Nick and Don Perata. At Nick's house, they carted off bags of documents along with his personal computer. The feds were especially interested in the financial dealings among the father, the son, and Staples, and whether the elder Perata was laundering campaign money through the two men and back to himself. In the early part of the decade, Staples paid the senator about $100,000 a year as a "consultant" even as Perata's committees paid Staples.

Nick, meanwhile, provided his father with tens of thousands of dollars in rent for a home and office space. He also purchased two homes from his dad for $850,000 while collecting huge consulting fees from his father's various campaigns. Multiple sources say Senator Perata believes it was Richie Ross who prompted the ongoing federal investigation.

Perata has said these relationships were entirely lawful, and yet, once the federal probe went public in late 2004, the senator cut off all direct financial relationships with his son and Staples, public records show. And since the subpoenas went out, neither has paid the senator a dime, at least on paper, nor have they received direct payments from any state PAC or candidate.

The business that once went to these men now goes to Sandi Polka, whose earnings began to soar after the subpoenas went out. From 2004 through 2006, the various campaign committees paid her a total of more than $1.4 million. Despite this newfound wealth, she hasn't acted like someone rolling in dough. Last year, Polka bought a modest, four-bedroom, two-bath house in the Sierra Gold Country town of Rescue for $512,500. But public records show she financed most of it — she put down only $51,500 and is carrying two mortgages totaling $461,000.

What, then, is she doing with the money? Mutual funds? It's unclear. The Express has found no public records that suggest any of the consulting income has made its way back to Senator Perata, as was the case with Tim Staples and Nick Perata. And the senator, his son, and Polka refused to answer questions for this story. Polka's only response came via her employee Paul Hefner, who e-mailed the following: "Sandi Polka refuses to subject her good name to the biased, irresponsible twaddle and relentless character assassination your publication shamelessly markets as 'news.' The law protects private citizens damaged by false and defamatory claims published with reckless disregard for the truth."

It is similarly unclear how the younger Perata now covers his own considerable expenses. Since the late '90s, Nick Perata has depended on his father's political campaigns for income. So is he now out of politics? Is Sandi Polka paying him as a subcontractor? No one in the Perata camp will say, and even if he were on Polka's payroll, state law would not require her to disclose it. This much is clear from public records: He bought a home in Napa for $749,000 last year, with a monthly mortgage of nearly $3,600.

For someone with Polka's recent income, a $3,600 mortgage would be peanuts. And 2007, normally an off-election year, promises to be another profitable one for her. Perata already has announced his intention to mount three statewide campaigns for the February 2008 primary — a healthcare initiative, a measure to extend term limits, and a referendum on the Iraq war. Earlier this year, Polka reportedly was paid to produce a TV ad for Perata's healthcare plan, and each of these upcoming measures will no doubt generate plenty of business for the Don's fair lady.

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