Orange County District Attorney Tony Rackauckas will be clearing Santa Ana Mayor Miguel Pulido of any criminal wrongdoing related to a property swap between the mayor and a city contractor, according to sources with knowledge of the decision.
Revelations in late 2013 of the real estate deal, which netted Pulido a nearly $200,000 profit that a good government expert said could be construed as a bribe, led to investigations by Rackauckas’ office and the Fair Political Practices Commission (FPPC).
FPPC officials were astonished late last year when they learned that the DA’s office was terminating its investigation, according to a source familiar with both probes.
Despite the DA’s apparent decision, the FPPC will likely go ahead with plans to issue a fine to Pulido for violations of the Political Reform Act relating to an illegal gift, not disclosing the real estate interests on public filings and possibly an illegal vote, the source said.
Although the investigation remains officially ongoing, the source said DA investigators have never interviewed any potential witnesses, or given any other indications that an actual investigation has taken place.
“If they had done a thorough investigation, that’s OK I can respect that,” the source said. “To say we’re not even going to do an investigation — they just stalled the whole thing out — to me that’s no good.”
Rackauckas spokeswoman Roxi Fyad refused to address the issue when reached for comment. Pulido has also not returned a call for comment.
In late 2013, Voice of OC revealed that in 2010 Pulido had traded a parking lot in Santa Ana to the owner of NAPA Orange County Auto Parts for a house in Westminster, with the mayor receiving the house for what public records showed was $230,000 below fair market value.
Then in 2011 he voted twice to give NAPA Orange County contracts, including a $1.35 million no-bid agreement to be the city’s sole supplier of auto parts. In 2012, Pulido sold the house at a $197,000 profit.
Tracy Westen, former CEO of the Center for Governmental Studies, said the transaction could easily be construed as a massive gift to Pulido, if not a bribe.
The Santa Ana City Council hired former Riverside District Attorney Grover Trask to investigate the property swap. Trask found that Pulido structured a cover-up and could be guilty of felony violations of the state’s conflict of interest code. He said in his report that a follow-up investigation by the Orange County DA’s office would be needed for additional evidence to confirm that Pulido did indeed commit felony crimes.
The DA’s office let a statute of limitations on a possible misdemeanor charge against the mayor expire. However, there remain possible felony charges, according to the Trask report.
Initially, DA officials told the FPPC they were waiting for the IRS to launch its own probe before taking any action, according to the source. But then, just after Pulido celebrated his reelection victory last November, the DA’s office told FPPC officials that the IRS wasn’t interested in the case, and that the DA wasn’t going to take any further action, the source said.
The situation left FPPC officials working on the Pulido case suspicious that Rackuackas might be protecting the mayor in an election year, the source said.
“What [the DA’s office] said specifically was that the IRS guy, or gal, was on another assignment, and they were waiting for them to be done with that assignment,” the source said. “Once I heard the DA wasn’t going to do anything at all, that made me smell a rat… It also makes me question whether [the DA’s claim about the IRS] was true at all.”
The FPPC had finished its investigation of the property swap months before the election, but DA officials had the FPPC hold off on issuing its fine until they wrapped up their investigation, according to the source.
“The part that is still disturbing is [FPPC officials] were all waiting,” the source said.
What makes the DA’s apparent non-investigation into Pulido even more puzzling to FPPC officials is the fact that the DA is “aggressively” pursuing an investigation into whether state Sen. Janet Nguyen’s election campaigns have direct ties to a group that allegedly engaged in political money laundering on her behalf during her campaigns for county supervisor, a position she held from 2007 to late last year, the source said.
“That’s what really surprised me about Pulido — they were so gung ho on Janet Nguyen,” the source said, adding that criminal prosecutions are likely to stem from the DA’s investigation into laundering contributions to Nguyen’s campaigns.
Last year, the FPPC filed court documents stating that six Nguyen donors admitted to being reimbursed for their campaign contributions, which constitutes illegal campaign money laundering. The source said there isn’t yet direct evidence that Nguyen’s campaign was involved in the scheme, but that there’s lots of “smoke.”
“There was enough smoke to make me think that we might get lucky enough to link [Nguyen] directly” to the money laundering, the source said.
Regarding the Pulido investigation, the source’s account also confirms reporting by Voice of OC last year that showed DA investigators hadn’t contacted potentially key witnesses at Santa Ana City Hall – including the former city manager, the city’s fleet manager and finance director – several months after the investigation began.
James Weddick, a former FBI agent who worked on high-profile cases like ABSCAM in the 1970s, at the time was puzzled by the DA’s failure to interview witnesses while their memories were still fresh, saying it “doesn’t make sense.”
There has long been speculation that politics could be playing a role in the Pulido investigation.
While Pulido is a Democrat and Rackauckas is a Republican, they run in the same political circles and have a longstanding relationship.
The mayor’s criminal defense attorney is Al Stokke, a longtime friend of Rackauckas and campaign contributor. A 2002 grand jury report called out Rackauckas for intervening in cases at donors’ behest, including in a case where the client was represented by Stokke, and pushing to either drop the cases or lessen the charges.
Last year, for the first time ever, Pulido’s campaign manager Dennis DeSnoo, a Democrat, donated the maximum $1,900 contribution to Rackauckas’ campaign for reelection. Other Pulido allies also donated thousands of dollars to Rackauckas’ campaign that year.
Pulido and Rackauckas’ relationship was symbolized visually when the DA attended Pulido’s state of the city last year as a VIP guest, sitting at the mayor’s table. A photo of the two together at the event raised eyebrows.
City Council members David Benavides and Michele Martinez, both opponents of Pulido, have expressed doubt that Rackauckas would prosecute a political ally.
“Does it really come down to who you know for what you can get away with?” Benavides said earlier this year upon hearing news that the misdemeanor deadline had passed. “It gives any taxpayer reason to lose confidence in the system.”
Tracy Wood and Thy Vo contributed to this report.