Lawyers Got D.A.’s Charity Funds

Orange County Dist. Atty. Tony Rackauckas and members of his nonprofit charity for troubled youth spent most of its money on legal fees while the charity was under investigation by the state attorney general’s office, county records show.

The charity, named the Tony Rackauckas Foundation when it was formed in 2000, said its mission was to raise money for counseling and guidance programs for at-risk children ages 5 to 16. It was disbanded last December as part of an agreement between Rackauckas and Atty. Gen. Bill Lockyer, whose office concluded that the charity failed to properly “govern its operations” and “exercise proper care in managing [its] assets.”

The attorney general’s office investigated after some district attorney’s employees complained that investigators for the Orange County district attorney’s office were asked to conduct background checks on prospective donors to the charity using county databases. Criminal databases are to be used only for law enforcement purposes. At the time, Rackauckas said his use of them was appropriate.

The charity collected $58,000--all from members who sat on its board of directors. County records show that 71% of the money--$41,000--went to pay attorneys who represented the members who were questioned under oath during the attorney general’s charitable trust investigation.

Of the remainder, $4,365 went for plaques for board members, $1,972 for an awards banquet, $888 for commission dinners and $750 for speaker fees. Another $2,570 was spent to form the organization.

That would leave $6,455. Expense and income statements the foundation filed with the county for 2000 and 2001 don’t indicate whether any of those leftover funds went to charitable causes or what, if any, funds remain.

Rackauckas spokeswoman Tori Richards said the investigation left the foundation with no choice but to hire attorneys.

“The legal challenges to the foundation have been well-publicized,” Richards said in a statement. “All of the attorneys’ fees expended by the foundation were necessary and appropriate in light of these challenges.”

It’s unclear if the spending is in line with the agreement Rackauckas reached with the attorney general’s office. Lockyer spokesman Nathan Barankin would say only that state law allows charities to hire attorneys “to represent their interests.”

Meanwhile, one county supervisor called Tuesday for a clampdown on the types of expenses that charities sanctioned by the county can incur with donated funds.

Supervisor Todd Spitzer said he asked Rackauckas on Tuesday to provide the board with an accounting of “every dollar spent” by the foundation on legal fees. Supervisor Chuck Smith said he also wants Rackauckas to account for the charity’s expenses.

“On its face, it raises questions,” said Spitzer, who said he is reserving judgment until he reviews Rackauckas’ response.

“We’re graciously allowing [him] to use public resources for legitimate charitable causes,” he said. “The money was intended to go for charitable causes. How was $41,000 in legal fees intended to help a charitable cause?”

Richards said Tuesday it was regrettable that Spitzer questioned the expenditures before reviewing the financial breakdown that he requested.

Elected officials raising money through private foundations is troubling, regardless of how the money is spent, said Robert Stern, president of the Center for Governmental Studies in Los Angeles and co-author of the state’s Political Reform Act.

“There are all sorts of problems with potential conflicts of interest between the elected official and the donor,” Stern said.

He said he had “less of a problem” with spending a group’s money on attorneys fees, as long as the legal issue was related to the group’s activities.

About 40 charities are sanctioned by the county, including 24 charities that raise money for public libraries. The charities--except for Rackauckas’--filed reports for review by supervisors on March 5, the day Rackauckas faced reelection.

Of the 40 charities, only Rackauckas’ was affiliated both with the county and with a named elected official. It was renamed the District Attorney Advisory Commission before it was dissolved. The charity’s affiliation with the county meant it had permission to use county facilities.

Sheriff Michael S. Carona operates the Mike Carona Foundation, but it is independent of the county and doesn’t file a county charity statement. In September, supervisors adopted a number of changes to the county’s charity policy, prompted in part by questions about the district attorney’s charity. The amendments include barring charities from using county logos or the name of the agency or department head.