Who the Hells in Charge?

A simple question knocked the smile off Anthony J. "Tony" Rackauckas' face in a March 9 interview: Does traditional organized crime operate in Orange County?

The powerful district attorney turned the palms of his hands out and up toward the reporter, opened his mouth . . . and said nothing. He stared with a pained expression as if his just-finished lunch was giving him trouble. He fell back in his dark leather chair and then leaned forward over the cluttered desk inside his surprisingly modest, 10th-floor corner office in Santa Ana. After he took a sip of lukewarm coffee from a burgundy, leaf-decorated mug, a smile reappeared on the DA's face.

"I don't . . . " said Rackauckas. And then he abruptly stopped speaking. "I don't want to . . ." He stopped again and glanced at Tori Richards, his press secretary. "It's hard for me to say, well, like, 'There is no problem,' you know? But I think we are in pretty good shape here. We don't have organized crime, you know, any of the traditional [New York or Chicago Mafia] families operating out of Orange County. From time to time, we have somebody in Orange County who we learn has connections with one or another of the traditional families. And then our organized-crime unit tries to keep track of them to make sure that they don't get involved in any crime."

It is odd that an organized-crime question—especially an uncomplicated one—should frustrate the usually unflappable Rackauckas. Or maybe it's not so strange: a scandal involving organized crime is threatening to make the DA's first term his last.

Rackauckas is a respected former Superior Court judge, a high-profile former homicide prosecutor, and a law-and-order politician whose campaign for DA three years ago was enthusiastically endorsed by the local Republican machine and its fat-cat contributors. By any reasonable measure, Rackauckas appeared an invincible candidate for reelection in 2002.

But the DA's public image has taken a savage beating lately. In early February, a behind-the-scenes intraoffice battle exploded into public view from the mysterious depths of the DA's clandestine organized-crime unit. The controversy centers on Patrick N. Di Carlo, a multimillionaire Newport Beach businessman and frequent contributor to Republicans such as Congressman Christopher Cox (Newport Beach). Legitimately or not, members of the organized-crime unit have long viewed Di Carlo with suspicion. That point is not in dispute, even by Di Carlo. In numerous legal documents—including a six-page complaint he filed with the Board of Supervisors in 1988—the 64-year-old Pennsylvania native has acknowledged that Orange County's organized-crime cops have investigated him since 1977.

To the horror of some law-enforcement officials, five additional key facts are also not in dispute:

•Rackauckas met and accepted $3,500 in contributions from the Di Carlo family after he announced his DA candidacy in 1998; shortly thereafter, the man who nowadays decides who does and doesn't get prosecuted for crimes in Orange County has become close friends with Di Carlo.

•In April 2000, Di Carlo—who possesses a concealed-weapon permit issued by the county sheriff—went to Rackauckas, said he was the victim of a Mafia extortion attempt after a business deal went sour, and asked the DA to use his office's resources against a Las Vegas man with direct family connections to an infamous New York City-based organized-crime syndicate.

•Rackauckas' organized-crime unit investigated but quickly focused on Di Carlo—not as a victim, but as a possible suspect. After Di Carlo complained to Rackauckas, the DA ordered the officers to "immediately cease" their probe into his friend's activities and to hand over their investigation file.

•After the incident, Rackauckas ignored his officers' concerns and, along with DA prosecutor Michelle Clesceri, took Di Carlo up on his proposal to go into business together. In July 2000, incorporation papers filed with the Nevada secretary of state's office show, they created an Internet shell company called Ecourt.com Inc.; to the DA, it "seemed like a good venture idea," but, he said, the business never got off the ground.

•In February, Rackauckas outraged many observers when he indefinitely suspended investigators Barry Foye and Lyle Wilson, both of whom had dealt with Di Carlo. Rackauckas later asked the attorney general to determine if the two had violated any laws after a secret recording of the businessman being interrogated ended up in the hands of an Orange County Register reporter.

The scandal has divided the DA's office into two camps. Some employees shrug off the controversy as a petty, if messy, misunderstanding undeserving of scrutiny. Other staffers are mortified and angry. In a campaign to underscore their displeasure with Rackauckas, DA employees last month created an unsparingly hostile website (members.tripod.com/solidarityii). On the site, they say their office is in "ethical free fall" and "there is nothing impressive about Mr. Rackauckas' conduct." In his interview, Rackauckas recoiled at the mention of the website and conceded that "an unhealthy situation" exists in his office. He says he worries that criminals are receiving "a dangerous signal" that county prosecutors have "lost their focus."