Missing Wives, Lousy Lies & Mob Ties

Exhaustive grand-jury investigation confirms DA corruption

Photo by Daniel C. TsangEight months ago, an offended Orange County District Attorney Anthony J. "Tony" Rackauckas strenuously denied the existence of a grand-jury investigation into corruption allegations at the DA's office. A couple of months later, Rackauckas admitted the existence of the probe but claimed it was a "routine" administrative audit undeserving of public attention. Late last month, we learned not only that Orange County's top law-enforcement officer is fond of employing misleading media spin, but also that he is, indeed, corrupt.

On June 26, the Orange County grand jury rocked the local legal establishment when it declared that Rackauckas routinely abuses his awesome prosecutorial powers to protect friends and punish perceived enemies. According to the grand jury's fact-filled, 100-page report, "Office of the District Attorney: An in-depth investigation," the DA is Nixonian in the darkest sense of the word: paranoid, petty, partisan, secretive, retaliatory and arrogant. And though this was a civil proceding, it's easy to conclude that the jury's findings demand a criminal investigation.

To those who read the Weekly, that description is hardly news. We've chronicled Rackauckas' numerous ethical lapses since he took office four years ago. What's impressive is that the grand jury—historically a panel of 19, mostly lethargic citizens who avoid the county's uglier controversies—had the courage to investigate the DA and then report its disturbing findings.

For that public service, the 2001-2002 jurors haven't been applauded, but rather ridiculed. Rackauckas accused them of political bias. Editorial writers at The Orange County Register questioned the jurors' integrity and proclaimed the panel was uninterested in discovering the truth. In Register reality, the truth is the DA "may have done some things wrong," but the public should be, as the Register is, "generally pleased with the job he is doing."

The spin didn't end there. Both the Register and Rackauckas argued that the report would have been more favorable had the jurors received "the complete story." Neither mentioned that it was Rackauckas who hampered the grand jury's duties. Consider this: when the grand jury subpoenaed Deputy District Attorney Kay Rackauckas, the DA's wife and a key player in office mischief, Rackauckas claimed he couldn't locate her. Sources tell the Weekly another key player the grand jury sought—deputy DA Susan Schroeder, the wife of Michael Schroeder, the Orange County Republican Party bigwig and key Rackauckas defender—did not testify.

To their credit, the jurors were not amused by the MIA deputy DAs. They noted, "The grand jury requested the assistance of the district attorney's office to locate the two witnesses, both of whom are extremely close to the district attorney, and were informed by the district attorney's office that they were unable to contact them."

Kay Rackauckas went to extraordinary lengths to avoid assisting the grand jury. She took months of personal leave from her six-figure job and then, after she failed to return to the office, was quietly fired on May 27 by Orange County CEO Michael Schumacher. There has been no official explanation.

According to the grand jury report, Kay Rackauckas' absence was an illusion. While they were searching for her, she was using a taxpayer-paid cell phone to call in orders—at times highly questionable if not unethical—to more senior prosecutors, records show. Despite her relatively modest management experience, the jurors found that the DA's wife "was left, in large part, to her own devices." One of those devices was to convert part of the DA's public offices and resources into a de facto campaign headquarters for Stephanie George, a personal friend and fellow deputy DA who was a winning Superior Court judge candidate in 2000.

But the biggest question emerging from the grand jury report is a question neither the Register nor the Los Angeles Times has asked: Why was Kay Rackauckas—a public servant sworn to uphold justice—afraid to testify?

Telling the truth about Tony Rackauckas can come at a cost. Just ask Michael Jacobs. The tough, veteran prosecutor had endorsed Rackauckas' DA run in 1998 and was rewarded with the top assignment in the homicide unit. Cordial relations didn't last. Jacobs became frustrated with Rackauckas' ethical lapses and lack of professionalism. Afraid the misconduct would continue unless confronted by outside authorities, Jacobs shared his concerns with state investigators in 2000. Then, according to the grand jury, someone in the DA's office left the equivalent of a horse's head in Jacobs' bed one night. Several local news reporters anonymously received official DA office "confidential" files containing negative and highly personal information on the prosecutor. The message was clear: speak out and you'll be publicly punished.

The threats didn't work. Jacobs refused to back down and Rackauckas eventually fired Orange County's most acclaimed homicide prosecutor. A wrongful-termination lawsuit is pending.

If challenging Rackauckas can be painful, becoming his pal is advantageous. The grand jury documented in impressive detail dozens of cases when the DA used his position to aid friends and contributors in law-enforcement matters. In two key cases, for example, jurors determined:

•Tony Rackauckas didn't know millionaire Newport Beach businessman Patrick Di Carlo before 1998. That changed as soon as Rackauckas launched his candidacy. Di Carlo—who admits that organized crime cops have for years considered him a mob associate—invited Rackauckas to his Harbor Island estate for dinner and a sleepover; raised thousands of dollars in campaign contributions; and even paired the soon-to-be DA with his son as a potential business partner in a Las Vegas-based corporation. When Rackauckas won, Di Carlo hosted and paid for an elaborate private celebration. In 2000, Di Carlo asked the DA to block the organized-crime unit from investigating his business activities. Rackauckas complied. The officers cried foul; Rackauckas placed them on leave. Signaling his contempt for his officers, Rackauckas bought Di Carlo a $600 Glock handgun and helped secure him a concealed weapons permit. Remarkably, Di Carlo says he wanted the gun to protect himself from the DA's agents. Rackauckas told the grand jury that he and his new friend "talk on the telephone several times a week and go to lunch together anywhere from once a week to once a month."

•Rackauckas had no experience handling consumer-fraud prosecutions, but that didn't stop him from rescuing Newport Beach billionaire George Argyros in his struggle with the DA's prosecutors. Without explanation, Rackauckas met privately with Argyros' attorneys and then overruled his staff's position that his political benefactor had personally directed the massive fraud scheme against approximately 11,000 local Vietnamese and Latino apartment tenants. The shakedown allegedly netted Argyros more than $33 million during a three-year period. The grand jury ruled that the DA had "not paid proper attention to a possible appearance of impropriety" in the matter and should not have been privately negotiating with his powerful friend.

•The DA created and refused to disclose information about a partially taxpayer-funded "charitable" foundation that glorified Rackauckas while giving official-looking law enforcement badges to Di Carlo and other businessmen who contributed money.

In any other major metropolitan area, a carefully researched and well-written 100-page rebuke of the DA's ethics might spark a public backlash or prompt an apology or resignation. But this is Orange County and—though the last grand jury did its job—there is no guarantee that any other legal body will do theirs.

Initially embarrassed by the report, Rackauckas' arrogance and claims of invincibility seem to grow each passing day. In a June 27 memo to staff, the DA was upbeat, confident and "proud of this administration's accomplishments."

Meanwhile, there are sure to be dedicated, law-abiding local prosecutors who are biting their tongues and have yet to come forward in public about Rackauckas' abuse of authority. We know because the grand jury also issued an ominous warning: "Of great concern to the grand jury were those deputy district attorneys and even members of the [DA's] management team that expressed fear of retaliation should the confidentiality of their testimony be violated."

Alarms should go off when good prosecutors fear their own boss.

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