As the fall campaign season drew to a close, former Senate leader Don Perata had a choice: protect his party's power to draw legislative seats or shore up his deficit-riddled legal defense fund.

He opted for the latter, transferring $1.5 million he had ostensibly raised from donors for ballot campaigns to a legal fund he created to fend off a years-long FBI corruption investigation.

Meanwhile, the redistricting measure that the Oakland Democrat had hoped to defeat was approved by the narrowest margin of the dozen measures on the ballot – less than 200,000 votes out of nearly 12 million cast.

"I have no doubt we could have beat it, even with a modestly funded campaign," said Bill Carrick, who cut campaign ads for the No on Proposition 11 campaign.

The Perata-led effort struggled to compete financially with the measure's proponents, led by Gov. Arnold Schwarzenegger. The measure stripped the Legislature of the power to draw its own political boundaries.

The No on 11 effort was "grossly underfunded," Carrick said. It was outspent 10 to 1.

Perata had amassed a $2.7 million ballot measure war chest, but he tapped only $161,000 of it for the No on 11 campaign.

One day after the election, Perata made the $1.5 million transfer to his legal fund. Set to lose his Senate seat in December due to term limits, Perata faced the unwelcome prospect of $250,000 in legal debts and little leverage to raise future funds.

Carrick would not comment on Perata's decision to keep the ballot funds for himself.

But he did say that "when the voters had awareness of what exactly (Proposition 11) was and how complicated the process that (it) puts in place is, they definitely didn't like it." The problem was getting that message out, he said.

Paul Hefner, a No on 11 and Perata spokesman, said laying blame for the measure's passage on Perata's doorstep would be unfair. "Senator Perata did more than anybody else to raise the red flag and say this isn't a very good initiative," Hefner said. He added that when an election is close "you never know what would make the difference."

Perata's fund transfer was legal, though the state's political watchdog is considering stricter regulation of increasingly popular ballot measure accounts. They are held by more than 1 in 10 lawmakers.

Fair Political Practices Commission Chairman Ross Johnson on Thursday called the accounts "open-ended slush funds."

The new regulation faces opposition from lawyers for Schwarzenegger, the Republican Party and Senate President Pro Tem Darrell Steinberg, D-Sacramento, and will be taken up in January.

Jason Kinney, a Perata spokesman for legal issues, said Perata "had some remaining funds after the election and he appropriately made the decision to move that money to legal defense."

Kinney said Proposition 11 wouldn't even have been a close race without Perata, who "single-handedly funded a serious statewide campaign against overwhelming odds."

"Monday-morning quarterbacks like to sit on the sidelines and point fingers," he said, "but the last person they should be pointing at is Don Perata."

At least one major donor to Perata's ballot committee expressed frustration that the former president pro tem kept the money intended for ballot campaigns for his own legal troubles.

Doug Elmets, a spokesman for the California Dental Association, which gave Perata's committee $25,000 in late 2007, said the dentists group "did not contribute the money with the intention that it would be transferred to a legal defense fund for Don Perata."

"It was CDA's understanding that this money was intended to be used for ballot efforts at the time," Elmets said.

Other donors were more accepting of Perata's move.

"Anytime you donate to an independent expenditure campaign, you recognize that it's independent and we have belief in the leadership of Senator Perata," said Lance Corcoran, a spokesman for the state's correctional officers union, which was Perata's biggest ballot committee donor, giving $602,000 in 2008.

Kinney said Perata has been unfairly forced to raise vast sums to fight "a wrong-headed investigation that never should have been launched in the first place."

An Oakland-based federal grand jury launched the Perata probe in 2004, focusing on the business dealings of Perata, his family and close friends. Four years ago, FBI agents raided the homes of both Perata and his son, Nick. In 2005, investigators subpoenaed Perata's Senate e-mails over a six-year period.

No one has been charged with a crime, but Perata has racked up more than $2.1 million in expenses fighting the probe. "It just keeps going and going without any kind of clear direction or endpoint," Kinney complained.

Meanwhile, Perata's fundraising to defend himself against the FBI investigation has slowed, campaign reports show. Despite a controversial infusion of $450,000 from the California Democratic Party in the past year, his fund still faced a quarter-million dollars in unpaid bills at the end of September.

The Democratic Party opposed Proposition 11 and spent $391,000 to defeat the measure, making it the second largest supporter of the campaign. Party strategist Bob Mulholland declined to comment on Perata's decision to transfer ballot funds to his own legal defense.

"Perata did a very good job, he was one of the leaders to defeat that (campaign)," Mulholland said. ""We don't get involved in elected officials' decisions about their committees."

Call Shane Goldmacher, Bee Capitol Bureau, (916) 326-5544.