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Romero Called to Testify

State senator is to appear before a grand jury looking into the business dealings of her colleague Don Perata.

June 01, 2006|Dan Morain and Evan Halper | Times Staff Writers

SACRAMENTO — State Sen. Gloria Romero of Los Angeles was summoned Wednesday to appear before a grand jury in the FBI probe of Senate chief Don Perata's business dealings.

Romero, a member of Perata's Democratic leadership team and one of his closest allies, said an FBI agent delivered a subpoena to her Capitol office requiring her to appear in July in Oakland, Perata's hometown.

Romero said in an interview that she is being called to testify as a witness. She said she declined to be interviewed by FBI agents and asked that they issue the subpoena.

"All along, I've thought this has been a fishing expedition," Romero said of the investigation, which became public in 2004. "I asked them to be specific about their questions and to give me a subpoena.... I look forward to answering whatever questions they may have."

Agents have shown interest in legislation that Romero carried three years ago to raise taxes on alcohol by a nickel per drink -- a direction that has puzzled Capitol denizens. Romero's bill stalled early in the process.

The subpoena is believed to be the first issued to a sitting legislator in the Capitol since the 1980s, when the FBI launched an undercover anti-corruption operation that put a dozen lawmakers, lobbyists and others in jail. The bribery and extortion case became known as "Shrimpgate" because undercover agents posing as businessmen paid campaign donations in exchange for legislation to permit a new shrimp-processing plant.

The FBI's inquiry into Perata's business affairs became known when agents issued subpoenas to individuals and entities in Perata's East Bay district. That was three months after senators had narrowly elected Perata as president pro tem, the most powerful post in the upper house.

The Romero subpoena is "neither unexpected nor interesting," said Jason Kinney, a consultant serving as Perata's spokesman on the investigation. "This is the legal equivalent of hitting the snooze button."

Kinney said Perata "has acted ethically and appropriately" in public office. The investigation is "having no impact on ... the conduct of the business of the state Senate," he said.

Whether Perata took a role in the alcohol tax bill is not apparent from the public record.

The current investigation involves no known undercover operation, and no one has been charged in the Perata case. FBI and Internal Revenue Service agents are looking into the senator's official, private and campaign-related dealings in Oakland and Sacramento.

Agents have interviewed members of the Oakland City Council, and have subpoenaed documents from local agencies, including the Port of Oakland.

Law enforcement authorities have examined payments and communications involving Perata and his political advisors, friends, and son and daughter, and have questioned current and former Perata aides. They also have interviewed some lobbyists involved in legislation that Perata carried.

Last year, they subpoenaed state Senate e-mails. Agents have looked at his involvement in legislation related to billboards, finance, gambling and insurance.

Romero, one of Perata's top lieutenants, is Senate majority leader, a post that requires her to help raise money for Democratic candidates statewide. First elected to the Assembly in 1998 and to the Senate in 2001, Romero has made her name as a lawmaker by focusing on problems at the Department of Corrections and Rehabilitation.

In late 2002, with the state facing a budget deficit in the tens of billions of dollars, Romero introduced legislation to raise a projected $500 million for emergency rooms and trauma centers with a new 5-cents-per-drink tax on alcoholic beverages. The fee would have been paid by liquor vendors when their products were sold wholesale.

"California taxpayers cannot continue to bear the financial burden for an industry's product that is responsible for substantial healthcare costs to the public and the state," Romero said when she unveiled the proposal at White Memorial Medical Center in Los Angeles.

"The alcohol industry must assume greater responsibility for a product that, by its design, debilitates an individual's physical and mental capacities," she said.

The effort had considerable backing from unions, healthcare organizations and police and firefighter groups. But the opposition was also formidable. Among the many groups working to kill the bill was the Wine Institute, a trade and lobby association that includes major California vintners and long has opposed new alcohol-related taxes.

On Wednesday, Mike Falasco, lobbyist for the institute, said the FBI interviewed him and others at the Wine Institute roughly a year ago.

Falasco said FBI officials asked general questions about issues of concern to his group. He said he told them that fighting the alcohol tax proposal was a priority for his organization.

Falasco said he does not believe Perata was instrumental in killing the bill, which died in the Senate in 2003. Another Romero proposal, to allow counties to place on the ballot a local tax on drinks consumed at bars and restaurants, also failed that year.

"I don't believe there is any connection between the legislation and Sen. Perata," Falasco said.

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