By Matt Coker
By R. Scott Moxley
By Charles Lam
By Nick Schou
By Gustavo Arellano
By Gustavo Arellano
By Steve Lowery
By R. Scott Moxley
Things can't get much tougher for Tony Rackauckas. He's running strong against Deputy DA Wallace Wade in his bid for a second term as district attorney, but the campaign rhetoric is turning ugly. So far, Wade has called his boss "a desperate politician" who "flip-flops" and "turns a blind eye" when it comes to allegations against his powerful supporters.
Meanwhile, the California attorney general's office—acting in concert with the Orange County grand jury—is pursuing a criminal investigation against Rackauckas.
The attorney general's office would not comment on its investigation, and the DA would not comment intelligently. At first, DA spokeswoman Tori Richards told the Weekly there was no investigation. Then she told The Orange County Register the grand jury was merely conducting "a routine audit" of the DA's office.
But documents reviewed by the Weekly show Deputy Attorney General James Dutton and the grand jury aren't just crunching numbers—they're pursuing possible criminal charges. Since last December, Dutton has subpoenaed dozens of witnesses, ranging from former DA employees and attorneys to current administrative personnel and senior attorneys and managers. Sources familiar with the investigation say the testimony will continue even after the election, perhaps ending in mid-March.
For those keeping track, this is far more expansive than the attorney general's previous Charitable Trust Section investigation of Rackauckas. That investigation concluded in December that the "Tony Rackauckas Foundation"—a secret "charity" set up by Rackauckas—had "failed to properly govern its operations and failed to exercise proper care" in managing its assets. Rackauckas denied any wrongdoing and then shut down the foundation.
Rackauckas' actions during the current criminal investigation exemplify his troubled tenure in office. In November, shortly before Dutton began issuing his subpoenas, Rackauckas got the county Board of Supervisors to approve a massive $7.4 million contract for the Newport Beach-based law firm Robinson, Calcagnie and Robinson to help prosecute half a dozen oil companies accused of contaminating local ground water.
The DA's office couldn't provide us with a list of environmental cases handled by the firm. But the Robinson firm is unusually tight with Attorney General Bill Lockyer—the man for whom Dutton works.
What is actually being said about Rackauckas in the grand jury hearing room remains secret, but considering the mismanagement, bad judgment and hypocrisy that has plagued the office since his 1998 election, there's plenty to talk about.
There's Patrick N. Di Carlo, the mysterious Newport Beach multimillionaire whom Rackauckas counts as one of his closest friends and who has long been under investigation by the DA's office for alleged ties to organized crime. Di Carlo, who has given Rackauckas thousands of dollars in campaign contributions, asked for help getting DA investigators off his back. Rackauckas happily obliged.
Then there's George Argyros, the billionaire chiseler and major Rackauckas campaign donor who spent 20 years amassing millions of dollars, in part by stealing thousands of his apartment tenants' security deposits. A year ago, Deputy DA Wendy Brough tried to prosecute Argyros, alleging the current ambassador to Spain was "personally liable" for the systematic robbery. Rackauckas nixed naming Argyros, undercut Brough 90 minutes after she filed suit, and kicked the whole thing up to Lockyer, who gave Argyros' development firm a slap on the wrist.
And don't forget Scott Steiner, the politically connected deputy DA who improperly used DA office equipment and time during his failed 2001 bid for a seat on the Orange City Council. Rackauckas once again asked Sacramento to investigate but otherwise failed to discipline Steiner, whose father is former county Supervisor Bill Steiner. Rackauckas could have fired Steiner outright, something he did back in 1999 to office manager Karen Davis for similar wrongdoing. But Rackauckas miscalculated in the Davis case: she had already been disciplined, and a county arbitrator recently ruled that the firing was improper. Now the county has to reinstate Davis and pay her three years of lost wages.
For these and other reasons, Wade isn't alone in opposing Rackauckas. Over the past three years, 11 of Rackauckas' 19 senior managers have left or are trying to leave the office. Both the Orange County Attorney's Association and the Orange County Association of Deputy District Attorneys have taken the unprecedented step of endorsing Wade, the challenger.
That Rackauckas is favored to win is a tribute to the Orange County Republican Party, which has gotten all five county supervisors and nearly every GOP city council member in the county to back Rackauckas.
All of which means beating Wade may be a hell of a lot easier for Rackauckas than beating the rap.