Rackauckas to Hand Off DiCarlo Case to the State

Dist. Atty. Tony Rackauckas said Thursday that he will hand off to state officials any prosecution of an extortion case involving a friend and political contributor amid questions over whether his role amounted to a conflict of interest.

His decision involves the case of Newport Beach businessman Patrick DiCarlo, who in April came to Rackauckas to say he was being extorted as part of a business deal gone sour. The D.A. assigned two investigators to the case but pulled them off weeks later, saying they were treating DiCarlo more like a crime suspect than a victim.

Since then, some in the office have complained that Rackauckas’ action was politically motivated--a point he denies. In fact, the district attorney says the two investigators stole evidence related to the DiCarlo case and gave them to outsiders, allegations the state attorney general is reviewing.

Rackauckas said Thursday that he will also ask the attorney general to handle any criminal case that might stem from the DiCarlo matter, saying he wants to avoid any appearance of a conflict.

Gerald Uelman, a Santa Clara University law professor, said the decision makes sense given the infighting within the office.

“It sounds like a real hornet’s nest,” Uelman said. “It’s achieved a problem of appearance of impropriety where you have got people hurling accusations at each other.”

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

In addition to the political contributions, Rackauckas confirmed Thursday that DiCarlo counseled him and his wife on a business deal in July. The prosecutor’s wife, Deputy Dist. Atty. Kay Rackauckas, later used corporation papers originally filed by DiCarlo’s son to register the business.

Kay Rackauckas abandoned the business--the idea was to help attorneys make courtroom appearances through the Internet--without raising or spending any money, the district attorney said.

Another source of debate at the district attorney’s office has been Rackauckas’ decision last year to have investigators run criminal background checks on prospective members of his nonprofit charity.

A Rackauckas spokeswoman last year confirmed that the investigators used confidential criminal databases while investigating applicants for the foundation. Such databases are supposed to be used only for law enforcement purposes, but the spokeswoman said the use of Rackauckas’ name met that standard.

Rackauckas said he does not consider the background checks inappropriate.

“I don’t have anything to hide,” he said. “We didn’t do anything that was inappropriate or illegitimate.”

Rackauckas said he is discouraged that the DiCarlo matter has prompted negative publicity about his office.

“The people of this office are doing a great job,” he said. “None of this should reflect on the entire group.”