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

Page 4 of 5

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.

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