FBI Investigating Business Activities of Perata, Associates

SACRAMENTO —  The FBI is investigating the business activities of incoming state Senate leader Don Perata (D-Oakland) and some of his associates, several sources said Wednesday.

Although the scope and target of the inquiry are not known, sources in law enforcement and others familiar with aspects of the probe said a federal grand jury has been impaneled and subpoenas have been issued in Perata’s East Bay district and in Sacramento.

Perata, who was narrowly elected Senate president pro tem in August, “has not been contacted by anyone involved in this investigation,” said Jason Kinney, a spokesman for the senator.

Law enforcement sources, speaking on condition that they not be identified, described the inquiry as a “public corruption” probe. The matter is in its early stages.

“These things never resolve that quickly,” one law enforcement official said.

A spokesman for the U.S. attorney’s office in San Francisco declined to comment late Wednesday. An FBI spokeswoman also would not discuss the matter.

One recipient of a subpoena, speaking on condition of anonymity, said Wednesday that the FBI demanded business records related to Perata and several others, including an Oakland City Hall lobbyist.

The lobbyist, Lily Hu, could not be reached. Her attorney declined to comment.

Hu, a longtime friend and associate of Perata, is among the most prominent lobbyists in Oakland, representing developers and companies that haul garbage, have cable television franchises and own billboards.

A reference to an “investigation” involving Hu surfaced in a suit she filed last year in Alameda County. In the case, Hu obtained a restraining order against her estranged longtime boyfriend, Frank Wishom, who has since died of natural causes.

In a declaration filed in September 2003, Wishom was quoted as saying, “It is true that there is an investigation being conducted by the Federal Bureau of Investigation, who is investigating Ms. Hu’s conduct in regard to her lobbying activities and her activities with politicians.”

Hu’s attorney, Sally Elkington, accused Wishom in a declaration also filed in September 2003 of “bullying” Hu by spreading “false information” about her.

“My client is confident regarding her business activities,” Elkington said in the declaration. “She has no reason to believe that the FBI is investigating and she is not taking or giving any ‘kickbacks.’ ”

There was no elaboration.

Word of the subpoenas came as Perata was working to consolidate his power by making committee assignments and other appointments in advance of his installation as Senate chief.

Legislators will return to Sacramento in early December and are expected to confirm Perata’s selection in what is normally a formality.

Times staff writer Greg Krikorian contributed to this report.