State to Probe Charges That D.A. Officials Stole Evidence

At the urging of Dist. Atty. Tony Rackauckas, state prosecutors on Wednesday launched a criminal investigation into whether officials in the D.A.’s organized-crime division stole evidence related to an extortion case they were probing.

The move is the latest twist in a long-simmering controversy within the district attorney’s office over the case, which involves a friend and political supporter of Rackauckas. The district attorney alleges that reports and a taped interview with his supporter were taken from the office in violation of state law.

At the center of the case is Patrick DiCarlo, who in April told Rackauckas he was being extorted over a business deal that went sour. The district attorney handed DiCarlo’s complaint to investigators in the organized-crime unit.

But within a few weeks, Rackauckas pulled two investigators off the case and reassigned them to other units, saying the officials treated DiCarlo more like a crime suspect than a victim. Some in the office have accused their boss of protecting his friend from the investigators’ scrutiny, a charge Rackauckas strongly denies.

Rackauckas said he sought the state probe after learning this week that the recorded interview with DiCarlo, which one of the investigators stated in a memo had been destroyed months ago, still existed. Several people outside the district attorney’s office reportedly had copies of the tape, one of which Rackauckas reviewed this week.

Legal experts said an outside examination of the case makes sense given all the charges and countercharges.

“You have a terrible situation where the district attorney is accusing a group of people in the office . . . and a group of people are accusing the district attorney,” said USC law professor Erwin Chemerinsky, who teaches a course on legal ethics. “There has to be a full and impartial investigation.”

In addition to seeking the state probe, Rackauckas took the unusual step Wednesday of asking Riverside County Dist. Atty. Grover Trask to conduct a separate investigation into whether disciplinary action should be taken against the Orange County investigators.

“I don’t want there to be any question of bias as to either of these investigations,” Rackauckas said. “These are going to be done by people not in our office who have no bias whatsoever.”

Upheaval Marks D.A.’s Tenure

The outside probes come after a series of personnel controversies Rackauckas has encountered during his two years in office.

Three of Rackauckas’ five top managers resigned or were demoted within his first 18 months in office. One of them, former chief assistant Devallis Rutledge, contends in a federal lawsuit that Rackauckas demoted him because his wife pursued a lawsuit against the office.

Rackauckas said the criticism is a natural consequence of his effort to make dramatic changes in the office, particularly among the 200-plus sworn officers in his Bureau of Investigation. He has now replaced four of six investigators in the bureau’s organized-crime unit.

His relationship with DiCarlo has concerned some district attorney officials, who have investigated DiCarlo in the past but never charged him with a crime, Rackauckas said. In 1988, DiCarlo filed a $150-million claim against the office, accusing investigators of damaging his reputation by spreading false information. The claim was later dropped.

Since 1997, Rackauckas has accepted $5,000 in political contributions from DiCarlo, his family and business, according to campaign records. In addition, DiCarlo hosted a fund-raiser for the campaign.

When he took office, Rackauckas said investigators cautioned him not to associate with DiCarlo. But he said they were never able to provide him evidence against DiCarlo.

Rackauckas said he was dissatisfied with the way DiCarlo was treated by the two officials. One of the investigators interviewed DiCarlo, the other supervised the case.

The audiotapes are a key part of that case, Rackauckas said, because in them DiCarlo describes the alleged crime, which involves an elaborate stock market fraud DiCarlo claims he uncovered. Since the initial interviews, DiCarlo has stopped cooperating with Orange County investigators.

Rackauckas said his office now wants to relaunch the extortion probe and plans to contact agencies like the Securities and Exchange Commission.

“I’ve already given direction to crank this thing up,” Rackauckas said. “It really demands further inquiry.”

Opinions varied as to whether Rackauckas should have declared a conflict of interest when DiCarlo asked him to investigate the extortion.

“Whenever there’s criminal charges against somebody who’s closely associated with the district attorney, the district attorney is better off to get off the case,” Chemerinsky said. “What’s making this different is DiCarlo is the victim.”

Shirley Grindle, an Orange County political watchdog and outspoken Rackauckas critic, said the district attorney’s office should not have handled the DiCarlo case in the first place.

“He should have recused his office from this,” Grindle said. “It’s not fair for him to be involved in this when it involves close associates of his.”

For his part, Rackauckas scoffed at the suggestion that his personal or political relationships could affect how he handles a criminal case.

“If I get evidence that anybody who is an acquaintance or good friend or family member has committed a crime, I’m going to do my duty with that evidence,” he said. “If it’s not a conflict, I’ll prosecute. If there’s a conflict, or the appearance of a conflict, I’ll turn it over to the appropriate authority.”

DiCarlo’s lawyer, Wylie Aitken, said his client is a law-abiding man who has long been harassed by Orange County district attorney investigators.

“My client is confident when there’s a true independent investigation not only will he be vindicated and his integrity confirmed, but the process will confirm the independence and integrity of our district attorney, assuming anyone would question it,” Aitken said.