Orange County D.A. Will Close Foundation

Orange County Dist. Atty. Tony Rackauckas agreed to dissolve his nonprofit charity after a state investigation concluded the organization mismanaged its assets, the attorney general’s office disclosed Friday.

The Tony Rackauckas Foundation, which the district attorney founded last year, will contribute its remaining funds to “legitimate charities” to be approved by the attorney general or a court, said Nathan Barankin, spokesman for Atty. Gen. Bill Lockyer.

Barankin said the investigation found that the charity “failed to properly govern its operations and failed to exercise proper care in managing [its] assets.”

Officials declined to elaborate on the allegations or say how much money the foundation raised.

State investigators began looking into the foundation earlier this year after three prosecutors flew to Sacramento and told top officials in Lockyer’s office that Rackauckas was utilizing public employees to help run his foundation. Specifically, they charged that the district attorney used employees to run background checks on potential foundation board members. They also said the charity ordered district attorney badges--like those issued to prosecutors and investigators--that it planned to give to some contributors.

Barankin said that once Rackauckas agreed to dissolve the foundation, there was no further need to investigate the allegations.

Rackauckas declined to discuss the foundation’s demise but issued a statement saying he was pleased that no criminal charges were filed.

Rackauckas has steadfastly denied any wrongdoing in connection with the foundation, which he said was formed to support programs for troubled children.

“These volunteers had the best intentions and should be thanked for their selfless efforts to help the community,” Rackauckas said in the statement. “We are pleased that the attorney general . . . found no criminal wrongdoing on the part of anyone connected with the foundation.”

The charity’s closure is likely to become an issue in the upcoming district attorney campaign. Deputy Dist. Atty. Wally Wade, who is challenging Rackauckas in the March election, questioned whether the foundation was merely an effort by Rackauckas to raise money--as well as his public profile.

“If it’s a legitimate operation, you don’t shut it down under pressure from the attorney general,” Wade said. “The mismanagement of the foundation at a minimum [raises questions about] his ability to manage a $70-million budget.”

But some volunteers who worked on the foundation said they feel the whole issue was blown out of proportion to embarrass Rackauckas.

“This foundation was created by a group of community volunteers looking to help kids,” said foundation board member Donna Porter. “It’s a shame that taxpayer money was wasted on allegations which I believe came from Wally Wade.”