Operation Limelight

1

Forrest Anderson was nervous. The Oakland weed activist was about to walk into the last place a weed activist ever wants to be. But something dark was bubbling in the local marijuana community, something that threatened not just his livelihood but the very future of the movement, and the only people who could stop it were the traditional enemies of marijuana lovers everywhere.

He had to go to the FBI.

He had to tell them about Superman.

Superman wasn’t like anyone he had ever met, and Forrest, who was 32, had spent a decade in the cannabis industry. His family had long believed in the medicinal powers of marijuana, smoking together and spreading the good word. His stepmother, Minnie Watson, a former legal secretary and an activist on domestic violence issues, founded programs in several prisons to mentor victims of abuse. She saw marijuana as a healing force that could make communities stronger. Forrest’s father, Carl, a 58-year-old Army veteran and paralegal, became a midlife convert when he discovered that pot alleviated his glaucoma symptoms, and Forrest used it to manage pain from an old injury.

“We believe in it,” Carl said.

“Believing in the plant,” Forrest chimed in. “That’s what it was.”

Forrest and Carl had the same blue-green eyes and a similar style of beard, though Carl’s was grayer. When they spoke, they traded lines of dialogue, finishing each other’s sentences, and their shared passion for the plant spurred them to open one of the earliest retail dispensaries in Oakland. In 1996, California became the first state to legalize medical marijuana, allowing sales to patients but offering no protection against the U.S. government, which applied the same severe restrictions to pot as it did to heroin. At any moment, federal cops could kick down a dispensary’s doors, arrest the proprietors and prosecute the landlords for hosting an illegal business. The family thought it was worth the risk. They rented a 2,200-square-foot building on West Grand Avenue in north Oakland. Watson applied for a city dispensary license, an all-important piece of paper required to operate, and became one of only four license holders in the city.

The doors of the dispensary opened in 2001, and for the next five years, the activist family lived their dream, running a marijuana store in the United States of America. They developed a loyal clientele of almost 7,000 patients, they say, and sold millions of dollars’ worth of pot each year. But money wasn’t the focus, Carl said.

“It was the spirit of helping people,” he recalled. One block away was a care facility for AIDS patients, and some became regulars at the dispensary; they would enter in obvious discomfort and smoke right in the store, relaxing as pain melted away. If a patient couldn’t afford his dose on a particular day, he got it for free. The Andersons tried to be good neighbors, creating a “soup wagon” program that delivered groceries to low-income seniors. “We paid people’s dental bills,” Forrest said. “We paid people’s power bills. We took care of our patients.”

It was the spirit of helping people.—Carl Anderson

In 2004, a dispute over building and fire code violations put the family’s dream on hold. An inspection of their space turned up some illegal plumbing and mechanical work, according to a memo by the city administrator’s office. The violations weren’t life-threatening, and the Andersons promised to fix them, but they ended up losing their lease in the dispute. It was a serious setback, because few landlords in Oakland were willing to host a pot club, and without a space to sell pot, the Andersons had to surrender their precious dispensary license.

The family spent the next several years trying to regain access to the building, finally obtaining a new lease in 2009 and pouring money into renovations. Now all they needed to restart the dispensary was a new license. But by that point, everything in cannabis had changed. Pot was starting to go mainstream. Economists predicted that if California voters took the next step beyond medical marijuana and legalized pot for recreational use, it would spawn a multibillion-dollar industry in the state. Unapologetic capitalists were charging into the market, starting cannabis companies with Wall Street money.

And at the center of the action, cutting deals left and right, stood the guy who called himself Superman: a burly labor organizer who was reputed to be close with the Hells Angels. He rode around Oakland on a big black motorcycle with a Superman decal on the front, the iconic red-and-yellow shield, and his name, Dan Rush, written beneath in large blue letters.

Rush was cannabis director for the United Food and Commercial Workers, a powerful international labor union with 1.3 million members and close ties to the Democratic Party. Lately he’d become a major face of the legal pot movement in California and beyond, giving quotes to national media outlets and lobbying politicians to pass cannabis-friendly laws.

The Andersons, though, had seen another side of Dan Rush. Forrest found him scarier than even the FBI.

And so, one morning in the fall of 2012, Forrest and Carl drove over the Bay Bridge into San Francisco to speak with an FBI agent. Reaching the waterfront, they stopped for a few minutes near Pier 70 and shared a joint. Then they continued west, to the Phillip Burton Federal Building and U.S. Courthouse. Several agencies that busted and prosecuted marijuana dealers kept offices here, including the FBI, the Drug Enforcement Administration and the U.S. attorney. The top federal prosecutor in the region, Melinda Haag, was a notorious hard-liner when it came to marijuana, saying that the state’s medical pot law was being “hijacked” by criminals and profiteers.

FBI Special Agent Roahn Wynar met the Andersons in the lobby. For Wynar, this was also an unexpected moment. The FBI didn’t typically arrange friendly meetings with cannabis dealers; it busted them. But the Andersons had promised to share information about a nest of white-collar crime linked to the cannabis industry, and that happened to be of deep interest to Wynar, who specialized in probing fraud and public corruption.

Forrest could feel his heart beating faster than normal. He didn’t know it yet, but he and Carl were about to set in motion one of the most surprising federal investigations in Bay Area history — one that would last three years, lead to a 15-count indictment against union official Rush, and ultimately redefine the landscape of cannabis in the region.

Wynar showed the Andersons to an elevator and pushed 10 for the U.S. attorney’s floor. As they rode up, the agent noticed a powerful smell of weed.

2

In 2018, The Chronicle emailed Dan Rush at the prison where he was incarcerated and asked whether he would talk about how he got there. “I’m an open book,” Rush typed back. “In fact I WANT this story told … and like I have said, many times … I committed a crime … and buddy, I am no Angel … in fact, I am the guy that gets the Job DONE … read my Wikipedia page.”

To assemble the following account, The Chronicle pulled from evidence generated by the FBI probe of Rush and his associate, including emails, text messages, audio transcripts, court filings and records of testimony. In addition, the newspaper interviewed agent Wynar, witnesses who cooperated with the FBI, Rush’s friends and Rush himself, who has exchanged dozens of energetic emails with the newspaper over the past two years. In some of these messages, Rush admitted mistakes and expressed remorse. But he also accused the government of abusing its power, saying that he drew a target on his back “because I was so successful in bringing cannabis as a topic to the mainstream.”

Rush said that for the first 49 years of his life, he hardly smoked marijuana and didn’t have any particular concern for people who did. Born in 1960 to Irish-Catholic parents in Oakland, he grew up in a compound of three adjacent homes owned by his extended family since the 19th century. Rush’s grandmother belonged to the Retail Clerks union, a forerunner of the United Food and Commercial Workers, and his father, James “Jimmy” Rush, was a local Teamsters official specializing in political strategy. Dinner-table discussions revolved around what everyone had done for the labor movement that day, and instead of playing catch with his son, Jimmy brought Dan to picket lines and precinct walks around the Bay Area, sparking what would become a lifelong obsession with politics.

According to Rush, his childhood was shaped as much by the Bay Area radical scene of the late 1960s and 1970s as it was by his family’s union lore. He says he lived near a violent street corner, West MacArthur Boulevard and Telegraph Avenue, populated by drug dealers and hookers. This made him, by his own description, “an addiction-level drug abuser since I was 10 years old”: cocaine, meth, alcohol, LSD. And because he was large for his age, with freckles and red hair, he gained access to some very adult subcultures. He says he dropped acid with the Merry Pranksters. He met famous Black Panthers including Bobby Seale and Angela Davis, who were amused, he says, by the weird white kid who kept appearing at their events asking about the politics of black liberation. “Had a great time, learned a lot about community organizing,” Rush emailed.

He hung out with the Hells Angels, too. He says he bought his first motorcycle at 16, the same year he dropped out of high school and joined the Teamsters. Working as a “lumper,” carrying hundred-pound sacks of sugar and chewing “a lot of meth,” his muscles bulked up, and according to his friends, he gained access to the Angels’ imposing brick clubhouse in Oakland. By all accounts, Rush never became an official club member, and he declined to discuss anything about the Angels. But it’s clear that he did grow close to them. In future years, photos of Angels would adorn the walls of his home, and he would speak with pride about “a very special community” of Oakland motorcyclists.

Despite his chaotic youth, Rush wanted to one day become a Teamsters official like his father. But in 1978, when he was 18, during a scuffle at a strike, Rush used a slingshot to fling a .44-caliber pellet toward a “jack booted strike breaking thug.” The pellet hit a cop in the eye instead, and Rush spent the next year in a jail cell for assault. Worse for him, as part of an eventual plea deal, he says, he was banned from the Teamsters for 10 years.

He eventually found his way back into Big Labor through the United Food and Commercial Workers, hanging out at the union’s local chapter in Oakland and talking so much about politics that the union put him in charge of monitoring legislation and gave him a cool-sounding title: special operations director. The role was unpaid at first, but Rush made the most of it, becoming an expert in the language of ballot measures and forging relationships with up-and-coming politicians. He first met Gavin Newsom, now governor of California, when Newsom was a parking commissioner; Rush helped with his first supervisor campaign in 1998. Similarly, Rush got to know future California attorney general Bill Lockyer when Lockyer was a state legislator in the 1990s. One day, according to Lockyer, Rush said he knew Sonny Barger, the Hells Angels founder. “Oh, I believe he’s a constituent,” Lockyer replied. Before long, Rush surprised Lockyer by presenting him with a motorcycle helmet autographed by Barger.

Rush was eventually hired part time to run political strategy for UFCW Local 5, which represents 30,000 food workers across Northern California. In the meantime, he seemed to be assembling all the pieces of adult success. To augment his modest union income, he built his own company, a private investigation firm. He married and had a daughter and later a son. And he got sober for the first time since he was a kid, joining 12-step groups and becoming a fixture in Bay Area recovery circles, showing up to meetings on his Superman bike.

The Superman fixation went back to his childhood, he says, when a friend gave him a toy model of the Man of Steel and he grew so obsessed with it that other kids started to call him Superman. Sobriety seemed to deepen his embrace of that identity: In the crucible of the 12-step rooms, Rush was transforming himself, gaining new powers. For years, he says, he had used prescription opioids to manage pain from an old weightlifting injury, growing dependent on those drugs.  Now he not only kicked his own habit, he started mentoring other addicts, connecting them with programs and counseling, he says.

I am no Angel … I am the guy that gets the Job DONE.—Dan Rush

“He’s one of the most dynamic, caring people I’ve ever met,” said Margaret Black, an optician in Hayward who credits Rush with saving the lives of her two addicted sons. Sometimes the recovery side of Rush’s life intersected with the political side: When Lockyer’s wife, Nadia, later struggled with meth abuse in an ordeal that became public, Rush “tried to be a helpful counselor during some of those months,” Lockyer recalled. “I appreciated his empathy.”

A Type 1 diabetic, Rush required daily insulin to manage his blood sugar, but as a recovering addict, Rush had to be careful with anything else he put into his body. He avoided medical marijuana and believed that using it would constitute a breach of his sobriety, a hard-line position that other recovering addicts did not share. Instead of pot, he chain-smoked unfiltered Lucky Strike cigarettes at a rate that horrified his friends. “Those things are like coffin nails,” said Rush confidant Troy Duffy, the writer-director of the “Boondock Saints” movies.

But then, one Thanksgiving, Rush had an epiphany.

The way he tells it, he was poring over a list of upcoming ballot measures in the fall of 2009 when one caught his eye: Proposition 19, a statewide measure to legalize pot for recreational purposes, as opposed to just medical use. It would be up for a vote the next year.

Rush pondered it. How would the world change if any adult could buy pot in the open? Just like alcohol?

Just like alcohol. That was the phrase that caromed through his skull, and in that moment, he recognized a massive opportunity for unions like his. Unions increase their power by adding new members, and they add new members by organizing workers. Rush saw that if pot were treated like liquor — taxed, regulated, sold by corporations instead of outlaws — a new industry would rise up, creating hundreds of thousands of new jobs.

And those jobs could be union jobs.

There could be union budtenders. Union builders of hydroponic greenhouses. Union infusers of cannabis into chocolates.

Years before the political mainstream started to embrace legal cannabis in bits and pieces, Rush was already imagining a scenario of almost limitless potential. In his lifetime, union-busting laws and the collapse of the manufacturing sector had shrunk the size and power of Big Labor. Legal pot, he realized, was a chance to rebuild the movement and breathe new life into struggling towns that depend on union jobs. He visualized a typical nuclear family making a living in weed: Mom works at the local dispensary, dad makes edibles at the production facility, and the tax revenues from those businesses fund schools for their kids and hospitals for their community. Weed wasn’t just a plant. It was a life raft for the drowning American middle class.

“It was kinda like getting hit by lightning,” he recalled.

He’s one of the most dynamic, caring people I’ve ever met.—Margaret Black

He wasn’t sure whether his colleagues in labor would see it the same way. The UFCW, originally formed in a merger between meat cutters, butchers and retail clerks, is a large institution with traditional values, and at first, he says, his union brothers either laughed at him or warned him not to bring “that drug-dealer shit” into the fold. But Rush argued that if the UFCW didn’t try to organize weed workers, a competing union like the Teamsters would. The president of Local 5 at the time, Ron Lind, was willing to give it a shot.

“He’s relentless,” Lind said of Rush, “and he’s a pretty good charmer.”

3

Outlaw businesses in America tend to get squashed by cops and rescued by capitalists. Every era has its examples. Dingy gambling dens become Las Vegas hotels. Music-pirating apps give way to Apple Music and Spotify. Investors and politicians notice that a black market can be lifted into the light, and then it is tamed and taxed and generally made safe for cities and states and corporate empires to benefit.

Yet there is often a Wild West moment in the middle, when the rules are still shifting, vast fortunes can be seeded or squandered, and everyone with a stake is scrambling for position: lawmakers, entrepreneurs, cops. This was the kind of moment catalyzed by California’s Prop. 19.

The measure was the brainchild of Richard Lee, then one of the nation’s most outspoken marijuana advocates. A paraplegic who depended on pot to manage pain, he had built an important Bay Area institution — Oaksterdam University, a school for cannabis growers — that made him a hero to reformers nationwide and helped establish Oakland as America’s capital of cannabis. Yet no major California politicians supported his vision.

“They looked at our issue as the electric rail on a BART train,” recalled Jeff Jones, a leader of the Prop. 19 campaign and the founder of one of the state’s earliest dispensaries. “You don’t touch the fuckin’ third rail, ever. We were a pariah.”

The main cause of that fear was the U.S. government, which had opposed California’s medical pot law from the start. The Drug Enforcement Administration staged raids and sent agents to cut down plants; the Internal Revenue Service investigated the finances of dispensary owners; the Department of Justice asked federal judges to stop dispensaries from selling pot, even to cancer patients. Though 12 states had followed California’s example and legalized medical pot, U.S. Attorney General Eric Holder maintained that “drug traffickers” were exploiting medical marijuana laws to commit serious federal crimes. In such an uncertain atmosphere, California elected officials and even their aides refused to meet with Prop. 19 campaigners. Newsom, who’d become San Francisco’s mayor, didn’t support the measure (“I’m just not there yet,” he told a reporter); Kamala Harris, then the city’s district attorney, vigorously attacked it.

Then Dan Rush showed up.

At first, the activists didn’t know what to make of him: a large, loud, friendly dude in a Superman jacket, cursing and slapping backs and telling fantastical stories about his adventures on picket lines and motorcycle rides. “Oh my gosh, he’s quite a character,” said Doug Linney, a veteran East Bay political consultant who worked on Prop. 19. “It’s hard to separate fact from fiction with him a lot of the time.” Rush sowed confusion by smoking Lucky Strikes instead of joints, according to Dale Sky Jones, Prop. 19’s spokeswoman and Jeff Jones’ spouse. Rush confided to her that he was still “struggling morally with cannabis,” she recalled, “trying to understand, is this medicine, or is this just another drug to be run by the gangs?”

Among a ragtag army of true believers, he was a mercenary, using the movement for his own ends — to build union power. Yet in that goal he seemed completely sincere, and he quickly proved useful to the underdog campaign, lending it the halo of the UFCW brand. He convinced the union to endorse Prop. 19 and started arranging meetings with legislators, lobbyists and faith leaders. “What other national organization was affiliated with marijuana? NORML? High Times? This was like having the Girl Scouts or the National Guard,” said Brian Webster, a close friend of Rush’s and a Bay Area community organizer who promotes hemp-related events.

Rush also connected the Prop. 19 activists with a more secret world of power. In the summer of 2010,  Dale Sky Jones said, he arranged a clandestine meeting with the Hells Angels. He brought the Joneses and Lee to the Angels clubhouse in Oakland, where they were met by three bikers, including Elliott “Cisco” Valderrama, the now-deceased president of the club’s Oakland chapter.

The activists’ goal was to show respect toward the Angels as their Oakland neighbors. Outlaw gangs make money by selling drugs, among other things; no one wanted the Angels to think the ballot measure might threaten their business. Pitching Prop. 19 to the bikers, the weed activists framed it as an effort to restore fairness: If the campaign succeeded, they argued, police would have one less weapon to target minority groups, whether those minorities are people of color or bikers. The Angels, Sky Jones recalled, “basically gave us their blessing and left us alone.”

Oddly, the bikers didn’t seem as scary to her as some of the state’s elected officials. The very next day, Sky Jones said, a Prop. 19 group sat down with a state senator in Sacramento, and he seemed to be sizing up the campaign’s pocketbooks. She got a funny sense that the official wanted a donation or a bribe. After the meeting, she asked Rush about it. “Yes, he had his hand out,” he replied, like he had seen it before.

When he wasn’t flexing his political muscles on the campaign, Rush was thinking about how to leverage cannabis to rebuild the labor movement — his big vision. The UFCW’s lobbying power was the key. He believed that if the union applied enough political pressure, fighting to liberalize cannabis laws, the nascent industry would realize that Big Labor was its friend, and cannabis companies would gladly let the union represent their workers.

All he needed to get started was a test case, an employer willing to take the plunge. He found one in Carl and Forrest Anderson.

He’d insist on love: ‘I love you, brother.’—Forrest Anderson

The father and son first met Rush in early 2010, introduced through a mutual friend. The Andersons explained their plight: They were marijuana crusaders who used to run a mom-and-pop dispensary in Oakland, spreading the gospel of the plant. Their dream was to reopen the club, and they needed a new license to do it.

Rush said he could help them. For years, Oakland’s marijuana industry had been frozen in place, capped at four dispensaries by the City Council. By using the union to lobby the council, Rush could persuade Oakland to reopen the licensing process and expand the size of the market. Then, if the Andersons signed a labor deal with the UFCW, agreeing to pay union dues once they were up and running, the union would support their license bid, giving them an edge.

Father and son were encouraged. Rush seemed excited too. He said it would be easy to champion them because they believed so deeply in the cause. “They were pioneers of trying to offer safe access to early patients in Oakland,” recalled Dale Sky Jones. “Dan loved them. He spoke so highly of them.” Their company was called AMCD Inc., for American Medical Cannabis Dispensary; Minnie Watson served as president, Carl was executive director, and Forrest was board director. After the family agreed to unionize AMCD, Rush praised them in a news conference and told a reporter they were “decent, hardworking people.” Carl said in the same article, “We’re 100% union. It brings credibility to what we are doing.” To spread the union message, Carl filmed a promotional video with Watson, who called herself “a proud member” of the UFCW. Rush mainly dealt with the father and son. When he saw them, he wrapped them in a bear hug.

“Oh, he seemed straight up,” Carl remembered. “He wanted to call you ‘brother’ all the time.”

“He’d insist on love,” Forrest said. “‘I love you, brother.’ And he’d insist on hearing it back.”

“ ‘You love me, don’t ya?’ That’s what he’d say,” Carl said.

Then, they said, he started to ask for money.

4

It wasn’t much at first: $2,500 one day, $5,000 another. According to the Andersons, Rush said he needed the money to make campaign contributions: He was lobbying Oakland politicians to expand the city’s cannabis market and secure the family a license.

Rush has vigorously disputed the Andersons’ account of their dealings. “The amount of LIES / MISCHARACTERIZATIONS that they told you and everyone all along are just preposterous,” Rush emailed, and in a court filing, his attorneys called Carl’s allegations “unfounded” and false. But several of the Andersons’ key claims have been corroborated by documents and court testimony, and the FBI considers the Andersons to be “very credible” witnesses, Wynar said. (The agent wrote in an affidavit that Carl “is a regular marijuana user, though I have not observed any impairment of his memory or cognitive abilities.”)

The Andersons say that in spring 2010, Rush began to show up at their building on West Grand accompanied by prominent local officials. “He was showing us he had the connections,” Forrest recalled. Vice Mayor and former City Council President Ignacio De La Fuente appeared one day with Rush; Rebecca Kaplan, the veteran councilwoman and perennial mayoral candidate, also paid a visit. Kaplan ended up holding two fundraisers in the Andersons’ space, and public records show that Forrest, Rush and others close to them donated a total of $4,200 to her campaign committee in May and June 2010.

De La Fuente said he doesn’t remember being introduced to the Andersons, but he had known Rush for years before that, seeing him on picket lines and motorcycle rides: “I’m a biker too,” he said. Kaplan did not return requests for comment.

Rush also told the Andersons he was “best of friends” with Gavin Newsom, then campaigning for lieutenant governor. Once Rush showed Forrest a special ID card, signed by Newsom, that granted access to the state Capitol building.

Through his spokesman, Newsom did not respond to repeated requests to comment on his relationship with Rush.

The Andersons had no reason to doubt Rush’s political power, especially because he seemed to be delivering on his promise: Before long, the city announced it would double the number of dispensaries from four to eight. Not only that, the new application process would favor unionized companies like the Andersons’.

According to Carl, Rush took credit for these developments. He had gained so much influence over the process, he said, that his best friend, an attorney named Marc TerBeek, was helping to write the city’s licensing rules.

He seemed to know everyone in the world.—Marc TerBeek

TerBeek lived in Berkeley and worked from a law office in Oakland. Forty-nine years old, with a slight build and a soft voice, he had a knack for turning Rush’s misspelled emails and spontaneous brainstorms into documents that made the ideas stick. Whenever Rush needed a legal brief or contract to advance the cause, TerBeek wrote it. He ended up providing cannabis guidance to city officials in both Oakland and Berkeley on an informal basis, and the Andersons would later retain him as their own attorney.

TerBeek had moved to the Bay Area from Grand Rapids, Mich., in the early 1980s. As a young man with liberal views, he’d volunteered for environmental causes until he realized there was no money in it and ended up in law school. After a few unremarkable jobs at plaintiffs’ firms, he struck out on his own in 2001, launching a new firm with a partner in Walnut Creek, handling insurance disputes and property spats between neighbors. In 2002, when he befriended Dan Rush, TerBeek was getting most of his clients from an ad in the Yellow Pages.

They met at a San Francisco labor event honoring Teamsters President James P. Hoffa, son of Jimmy Hoffa. TerBeek perked up when he learned that Rush worked for the UFCW: An attorney who knows people in unions can receive steady legal work. Soon the two men were regularly meeting at a Vietnamese pho shop in Oakland, chatting about the struggles of working people as they slurped bowls of soup.

They began helping each other professionally. Through his law firm, TerBeek hired Rush’s private investigation company to handle a few odd jobs, while Rush drummed up clients for TerBeek. Rush “seemed to know everyone in the world,” TerBeek recalled. One day the attorney found himself talking on the phone with Sonny Barger, the Hells Angels founder, who hired TerBeek to represent his wife in a small legal matter; another day he was invited to coffee with Bill Lockyer, by then the state’s attorney general, who gossiped with Rush as if they were old pals.

TerBeek also leaned on his new friend for support during a rough period in his personal life. In 2007, the attorney and his wife divorced and he became depressed. His drinking spiraled out of control; Rush noticed and urged him to enter Alcoholics Anonymous. In 2008 they started going to AA meetings together every day in Alameda, and Rush soon became TerBeek’s sponsor.

During TerBeek’s difficult early months of sobriety, Rush was “my rock,” the person who guided him through the program’s 12 steps and even made sure he had an income. TerBeek’s law firm had recently collapsed because of an employee’s embezzlement, so he decided to start fresh, opening a new solo firm in Oakland, and Rush steered business his way. The lawyer “was broke and in dire straights emotionally / financially / spiritually,” Rush emailed from prison. “The fact was that we both had survived our personal nightmares, and like brothers / survivors of a shipwreck as we used to say... we set out to build our ‘working Man’s best friend FULL SERVICE law firm / progressive politics consulting firm.’ ”

This is the moment when their personal and financial relations started to become deeply and intricately enmeshed. Ultimately, it would lead both men to ruin.

Rush was involved with the Instituto Laboral de la Raza, a San Francisco nonprofit that advocates for migrant laborers and files workers’ compensation claims on their behalf. As the organization’s treasurer and a board member, Rush was able to redirect those cases to TerBeek, bringing him $240,000 in fees each year. Similarly, Rush started referring cannabis clients to TerBeek, hooking him up with companies and officials who needed help navigating weed regulations. These consultations and associated legal tasks would ultimately earn TerBeek $350,000 in total revenue over four years.

By the end of 2009, the alcoholic attorney had salvaged his life and career. He even fell in love again, with a woman he had met at Café Gratitude, a vegan hangout in Berkeley where the names of the dishes on the menu all began with an affirmation. Jasmine Brown was a fundraiser for nonprofits. She and TerBeek moved in together that year and began the process of adopting an infant daughter. In 2011, Rush would attend their wedding.

Your success now is because of me.—Dan Rush

TerBeek knew he had Rush to thank for his resurrection. But it was strange: The better he felt, the colder his sponsor became. Rush griped with increasing frequency about his finances, saying he was broke and couldn’t put food on the table for his family. He asked TerBeek for money.

It turned out that Rush had gotten into debt trouble. TerBeek learned that he had taken out a $420,000 loan from a private lender, putting up one of the Rush family properties in Oakland as collateral. Today Rush says he borrowed the money to turn a piece of his family’s property into an assisted living care center; FBI Special Agent Wynar says there is no evidence that Rush took any steps to develop that real estate project. In any case, the money was now gone, and the loan was about to come due. Rush stood to lose his family’s house.

For the first time in their friendship, but not the last, Rush and TerBeek argued about money. According to TerBeek, Rush pressured him for funds, claiming that the lawyer owed him hundreds of thousands of dollars from private investigation jobs that Rush supposedly performed for TerBeek’s firm. (Wynar says there is no evidence to support this claim, and TerBeek denies it.) Rush accused TerBeek of ingratitude.

“I got you to sobriety,” Rush told him once, according to TerBeek. “Your success now is because of me.”

The lawyer didn’t like being pressured. Still, his sponsor had a point: Without Rush’s mentorship in AA, and without the clients he kept referring, TerBeek had no idea where he would be. He didn’t want to jeopardize their relationship at a delicate moment in his recovery.

Besides, they were starting to explore their most exciting venture yet: building the cannabis movement. Rush needed a detail-oriented person to craft legal arguments and contracts, and TerBeek was all in. He viewed pot the way Rush did: not as a lifestyle but as a political weapon, a hammer for smashing America into a lovelier shape. As the parent of an adopted African American daughter from his previous marriage, TerBeek worried about her exposure to racist policing. Decriminalizing cannabis would make the country fairer, he reasoned, and it might be good for his law practice too: If he developed a reputation as a cannabis attorney, he could attract big-time weed companies as clients.

To keep his new life on track and set himself up for the future, TerBeek somehow needed to come up with almost half a million dollars to retire Rush’s huge personal debt.

5

Just then, around December 2009, TerBeek heard from a young man in the cannabis world.

Quick-thinking, ambitious and only 26, Martin Kaufman was a weed prodigy. Born to Austrian parents and fluent in German, he’d grown up in Marin County and started selling pot in middle school. After college in Santa Barbara, he moved back to the Bay Area and founded a string of construction and security companies that catered to state-approved medical collectives.

Kaufman specialized in building large grow facilities, designing everything from the layout to the electrical and HVAC systems. His work straddled the line between the old outlaw industry and the new legal one: Although his own businesses were licensed and paid taxes, his grower clients were technically flouting federal drug laws — and they paid Kaufman in cash. But for a while now, he had hoped to move more fully into the light, branching into the retail side of cannabis. He wanted to own a dispensary in Oakland.

His office was located across the street from Oaksterdam University, the stronghold of the Prop. 19 effort, and as the campaign unfolded in late 2009 and early 2010, Kaufman started to worry that he would be locked out of the market. He noticed a stream of “deep-pocketed suits trying to get rich quick off cannabis” pouring into the city. Montel Williams, the talk-show host, was rumored to desire a dispensary. Another hopeful was Derek Peterson, a 36-year-old financial analyst who had left a job at Morgan Stanley to seek his fortune in legal weed. Peterson had founded Terra Tech, a publicly traded company headquartered in Irvine that supplied cannabis agriculture products and was looking to expand into distribution and retail.

“Cannabis is becoming more legitimate, right?” Peterson explained in “Marijuana Gold Rush,” a 2011 documentary. “So, traditional legitimate business practices are now entering the arena. And that is: cutthroat, backstabbing, stepping on, and trying to grab market share.”

Wondering how he could compete, Kaufman took stock of his finances. Money wasn’t an issue; he had done well enough already to buy a house in Marin County. The problem was documentation. Cities usually require dispensary applicants to demonstrate access to startup capital; he would need to show bank statements. But he dealt in cash. Sometimes lots of cash. One recent construction job for a grower had netted him $500,000. Was it possible to place that much cash into a bank account? What were the tax implications?

He decided to get a professional opinion. He had never dealt with TerBeek before but knew that the lawyer had touted his financial expertise, so Kaufman approached TerBeek with his questions.

TerBeek could hardly believe it: Suddenly, here was the promise of more than enough money to bail Rush out of debt.

He came up with a plan.

TerBeek offered to hold the cash in his firm’s trust accounts, where he said it would be secure, and within the next few weeks, he, Kaufman and Rush worked out a deal. Kaufman would loan the $500,000 to Rush for his project to develop an assisted living complex in Oakland. In return, Rush would pay Kaufman $3,000 a month as interest and eventually repay the full half million. TerBeek promised to handle all the details. He would cloak the origin of the cash by drawing up a phony agreement that disguised the interest payments as “consulting” fees.

He manipulated weak and vulnerable people. I was one.—Marc TerBeek

In January 2010, Kaufman showed up at the lawyer’s office with a brown double paper bag from either Safeway or Trader Joe’s. (He says he doesn’t remember which, but he is certain the bag wasn’t from Whole Foods; he prided himself on frugality.) Inside the bag were stacks of crisp, rubber-banded $100 bills — $410,000 worth, Kaufman recalled. A subsequent delivery of cash brought the total to $500,000.

At that point, TerBeek took custody of the half million and did something that felt “oily,” he later admitted. Over a period of two months, the lawyer made dozens of deposits in Bay Area banks, $9,000 or $9,500 at a time, to avoid raising suspicion. This is a method known as “structuring,” and banking regulations forbid it. Then he withdrew $420,000 and wrote a check to pay Rush’s existing debt, TerBeek later said in a federal court declaration; Rush kept the remaining $80,000. Soon after, Rush failed to make the required $3,000 interest payments, upsetting Kaufman — and TerBeek paid them out of his law firm’s account, according to the declaration.

Why take such risks to bail Rush out of debt? Two reasons, TerBeek says: fear and hope. He feared angering his friend and sponsor, who, according to TerBeek, pressured him to take the cash and structure it, barraging him with “verbal and emotional abuse as well as threats of violence,” TerBeek said in his declaration. Rush denies this, saying he “never understood the deal that much” and it was purely TerBeek’s idea; Rush says he thought the money was an investment in his real estate project, not a loan to be repaid.

“He’s the ultimate predator,” TerBeek says today. “He manipulated weak and vulnerable people. I was one.”

At the time, TerBeek also rationalized the financial sleight of hand by telling himself it was for a higher cause. Cannabis. The movement. It needed hard-driving people like Rush and Kaufman, especially in 2010, as the enemies of legalization seemed to grow bolder.

In mid-October, two weeks before the vote on Prop. 19, U.S. Attorney General Eric Holder released a letter promising to “vigorously enforce” the federal marijuana ban regardless of what California voters decided. “The Department of Justice strongly opposes Proposition 19,” Holder wrote. His comments raised the specter of messy legal battles, and Prop. 19 was defeated by a slim seven percentage points.

Then, starting in 2011, the top federal prosecutor in Northern California, Melinda Haag, leveraged a range of powers to make life difficult for growers, retailers and public officials backing reform. She threatened to seize and prosecute a small cannabis cooperative in the Tenderloin, contending it was too close to a playground, although a porn theater, a strip club and four liquor shops were closer. She filed a forfeiture lawsuit against Harborside in Oakland, the largest dispensary on the West Coast. Meanwhile, in April 2012, DEA and IRS agents raided Oaksterdam University, purportedly looking for evidence against Richard Lee. Although he was never charged with any crime, the raid struck at the citadel of Bay Area cannabis and forced Lee into silence.

Together, these events sent a chilling message, and the effect was devastating: Hundreds of dispensaries either left California or closed, while public officials across the state put new cannabis regulations on hold. Outgunned and in retreat, the young industry seemed to be facing an existential threat.

With his huge debt no longer dragging him down, Rush made his boldest move yet.

At a Los Angeles drug-reform conference in November 2011, he took the podium, planning to speak about the role of organized labor in the marijuana movement. Wearing a black windbreaker with the UFCW logo, he began with a joke: “Hi, I’m Dan, I’m an alcohol—”

He cut himself off, smiling — “oh, wrong meeting” — and started talking in blunt terms about the federal government’s drug war. “I don’t want my kids and my grandkids growing up in a war,” he said, “in laws and societies that make absolutely no sense.” He said cannabis activists were in a tough spot, but there was hope, because they could unite with labor and fight back with weapons provided by the UFCW. “You’re David,” he told the assembled, “and Goliath has shown up.” Then he leaned into the microphone, his smoker’s growl roaring through the ballroom: “We’re gonna rise up,” he said, the audience whooping, “and we’re gonna kick their asses.” He pounded his fist on the podium.

To hear Rush and his friends tell it, this is how his legal troubles really started: He vowed to kick the DOJ’s ass, and then, against all odds, actually did.

Over the next year, he lobbied for bills that would protect medical marijuana patients and providers and crisscrossed California making speeches. At one rally, outside the U.S. courthouse in Sacramento, Rush accused Haag and her colleagues of harassing cancer patients while leaving the real bad guys alone. “You’re supporting the cartels!” he roared.

Duffy, the filmmaker, remembers that around this time, Rush invited him to tour the sprawling marijuana greenhouse at Oaksterdam University. A couple of high-ranking Hells Angels were hanging out with Rush — guys Duffy had read books about — and Rush seemed more intense than usual. “He said, I’m gonna legalize this stuff,” Duffy recalled. “I was like, yeah, right.”

Rush continued to extend his influence over the politics and business of cannabis, locally and even nationally. In the Bay Area, he became a member of the Berkeley Medical Cannabis Commission, giving him some power to approve or deny pot licenses in that city. And he leveled up in the union hierarchy, too, after making a pitch to UFCW leaders based in Washington, D.C. Rush urged them to pump more resources into cannabis organizing, and the bosses decided to hire him full time, at a salary of $100,000. With their permission, Rush started referring to himself as the union’s director of medical cannabis and hemp.

I always EMBRACED being a Robin Hood.—Dan Rush

By mid-2012 he was promoting his vision across the country, traveling thousands of miles a week with his friend Brian Webster, who was hired as a part-time organizer for the union. Together they flew to states including Minnesota, Nevada, Colorado, Washington and Oregon, trying to grow the UFCW cannabis division from seedling to empire. If they could lay the groundwork for unionizing 50,000 to 100,000 workers, “for us, that would change the United States,” Webster recalled.

Everywhere they went, people came up to them, wanting advice on starting cannabis businesses, getting licenses, writing ballot measures, running campaigns. Webster says they weren’t sure whom to trust, so they often gave people TerBeek’s phone number and kept moving, counting on the lawyer to handle details of various contracts and relationships. Today, Rush says this is one of his chief regrets: He didn’t pay closer attention to TerBeek, he says, letting the lawyer cut deals that Rush didn’t fully understand and would come back to haunt him.

Even so, Rush admits he was “a rule bender and breaker” out of zeal for the union cause. “I always EMBRACED being a Robin Hood and an Outlaw for my members (against the system and corporations),” he emailed from prison. “That is the problem with the Labor Movement now. Everyone is too comfy.” The UFCW wasn’t militant enough for his taste, and he viewed some of his own colleagues as threats. Once, before a trip to Las Vegas, Rush warned Webster to be on his best behavior, because “this is where they nailed Hoffa. We’re going to be watched by the feds, we’re going to be watched by our own union.”

I’m not saying he’s a saint. He’s no fuckin’ saint.—Brian Webster

Because of Rush’s penchant for exaggeration, it’s hard to know exactly how successful he was as a political operator or a union organizer. He bragged that he turned 4,000 cannabis workers into UFCW members; Webster says the real number was closer to 600, but even that figure may be inflated. Rush said he signed 90 union agreements with cannabis companies; the FBI says many of those were sham deals, the contracts never forwarded to union headquarters. Rush says he drafted the language of both Amendment 64 and Initiative 502, the historic campaigns that legalized recreational pot in 2012 in Colorado and Washington state, respectively, but it’s hard to find proof of it.

Still, Rush certainly left traces of his influence, pressing his thumbs into the wet clay of media coverage and shaping the policy views of sympathetic politicians. “You looked and sounded great on TV last night,” Oakland Councilwoman Rebecca Kaplan emailed him in 2011 after one of his many press conferences made local news. (The FBI would later overhear Rush bragging that he could throw “24-7 fucking press conferences” because the “media loves it: unionizing marijuana.”) He thrived as a storyteller, able to frame the stakes of the cannabis movement in a way that fired dreams and ambitions and got him quoted in the New York Times, the Associated Press, the Chicago Tribune and the New Republic. And he played a role in persuading at least one major elected official to embrace the decriminalization of pot: Gavin Newsom.

Rush claims, credibly, that he is the one who persuaded Newsom to “be the Cannabis Gov,” arguing that Newsom could do with cannabis what he had famously done with same-sex marriage — take a bold progressive position that would do a lot of good and raise his national profile. In 2012, Newsom became one of the first major politicians to call for full legalization, helping inject the idea into the zeitgeist.

While he didn’t respond to requests for comment for this story, in 2014 Newsom filmed a video praising Rush for “his leadership” on “real cannabis reform,” saying, “I think it’s a remarkable thing that Dan’s been out there working as hard as he has all across the country.”

The more time Rush and Webster spent on the road, the more momentum they felt. The trips were grueling, though, the motion and blur of planes and hotels. Superman’s blood sugar spiked on junk food and three packs a day of Lucky Strikes, and he often complained to Webster about money, griping that his six-figure union salary was less than what he once earned as a private investigator. And he fretted about surveillance. Had his name pinged across the radar of some federal agent? Was he being watched?

“Dan was not Jim Hoffa,” Webster said. “Dan was a working-class guy who took a pay cut to organize an industry, and was targeted, and entrapped.” He added, “I’m not saying he’s a saint. He’s no fuckin’ saint.”

6

This next part of the Dan Rush story is a little tricky to tell. Everyone involved has his own wildly different version, and trying to figure out what happened is like tracing the origin of a mysterious explosion by sorting through its field of debris.

The ingredients of the blast came together in Oakland between 2011 and early 2012, while the city was selecting four cannabis dispensaries to receive new licenses. It was a challenging process, involving public hearings and long paper applications scored on a point system, and looming above it was the specter of the federal crackdown. That pressure shrank the applicant pool; only 12 groups dared to try.

The Andersons were among them, and for a while it seemed they were on track to win one of the four golden tickets. Their personal attorney, Marc TerBeek, helped them craft a persuasive application, and their bid remained alive as the city winnowed the field, first from 12 applicants to 10, then to a provisional four. The Andersons were ranked No. 4 by points, thanks in part to the “bonus points” conferred by their unionized status. The application states they were endorsed by cannabis advocate Richard Lee and Alice Huffman, president of the state NAACP, who praised Minnie Watson for her commitment to “transforming underprivileged and underrepresented neighborhoods of color.” Unless something pretty weird happened, they would finally get their dispensary back.

Then again, the whole process felt weird to the father and son, and it was getting weirder by the week.

He betrayed us. He was a crook.”—Carl Anderson

Dan Rush. They couldn’t understand him. Lately, instead of offering his usual bear hugs, he was growing meaner. He got irritated when they medicated themselves with pot, implying that they were too blazed to understand anything about business. And he kept raising the price for his lobbying services, the Andersons recalled, regularly demanding $5,000 and $10,000 in cash payments. “I was completely disheartened,” Forrest remembered. “It just didn’t smell right to me.” But when the father and son went to City Council meetings, they saw Rush talking and joking with important officials, demonstrating his power, so they kept trying to come up with the money. (The FBI would say later in an affidavit that Rush accepted $50,000 in payments from them, plus $51,000 of stock in their company; the Andersons say the true amount of payments was higher. Rush denies this, saying that he charged the Andersons $10,000 for his consulting services “before the union was involved in cannabis” and all other payments were used to make campaign contributions.)

Meanwhile, as the Andersons struggled to determine where they really stood, the top point scorer in Oakland was having no such trouble — a dispensary that was initially dubbed Oakland Community Collective and would eventually be called Blüm Oakland.

Blüm was the creation of Salwa Ibrahim, an entrepreneur in her late 20s. A native of Egypt who went to high school in Oakland, she had worked for Lee at Oaksterdam during the Prop. 19 campaign and was well connected in nonprofit and political circles. She was also the romantic partner of Martin Kaufman, who was impressed with her poise and found her stunning, and as they talked about cannabis together and tried to predict the future of the market, Ibrahim decided to apply for a dispensary license. She developed the application package mostly on her own, she says, with some coaching from Kaufman and a 12.5% investment from Derek Peterson, the Terra Tech CEO, whom she and Kaufman had recently gotten to know. Kaufman owned part of the new dispensary company too.

The Blüm group had little in common with the Andersons. For one thing, Blüm was indifferent to unionization; Ibrahim had avoided signing a deal with the UFCW, feeling that Rush was shady and disliking his constant cloud of Lucky Strike smoke. And both she and Kaufman prided themselves on their business savvy. They doubted the Andersons’ ability to run a successful modern dispensary. “They really meant well, I think,” Kaufman recalled. “But they were woefully underfunded and struggled at interpreting building code, regulations and cultivation.”

For the Andersons, the real trouble began with a small patch of weed that Carl decided to grow in a back building at their vacant dispensary. He figured he could sell some of it to replenish his dwindling funds while he waited for the license.

The city didn’t necessarily care, as long as he paid taxes on the grow. According to Carl, Rush told him not to pay the taxes because no one was looking, so he didn’t. (Rush says he never told Carl not to pay taxes and that Carl made the decision not to pay them on his own.)

That’s when everything started falling apart. To Carl’s surprise, the city started asking pointed questions about excessive electricity consumption — often a sign of weed cultivation — at his West Grand storefront. Nervous, he sought legal advice from TerBeek, who told him to blame his high electrical bills on leaky refrigerator seals, Carl says. During a crucial January 2012 city hearing on AMCD’s application, Oakland officials asked Carl about the electricity; he gave the leaky-fridge excuse. But when a city inspector paid an unexpected visit to Carl’s space, he went straight to the back building where Carl had been growing weed. The Andersons were busted, and in March, the city disqualified their license application, saying they had been dishonest.

All they had left now was their rented storefront on West Grand Avenue. But without a license, they lost their grip on it. One of their successful competitors, Blüm, now angled to take over the space, with the city’s support, and Carl, broke and defeated, accepted an offer from Blüm to buy out the lease. “At the end,” Carl recalled, “I lost it. I hollered and I yelled. I am a passionate man.” Kaufman says when he visited the space to accept the keys on Blüm’s behalf, he saw Carl sitting in his car, weeping. Blüm opened to customers in November 2012 and became a quick success; by 2016 it would rack up $14 million in annual sales. That year an accountant would estimate that Blüm’s dispensary license alone was worth $10.3 million.

There are multiple accounts of what happened here. Rush and TerBeek say that Carl acted erratically and made a series of poor decisions that led to his demise. But Carl was now convinced that the two men had screwed him over. “It was a setup,” he recalled later. He didn’t understand exactly how they had accomplished their goal, but he sensed that Rush and TerBeek had shifted their loyalties to the deep-pocketed Blüm group behind the scenes, manipulating Carl and his family out of their license and their space to make room for a richer competitor. In essence, Carl believed he was the victim of a conspiracy — and the FBI would eventually find persuasive evidence to support Carl’s version of the story.

The Andersons were angriest at Rush. They didn’t blame the competitors who took over their space — it was just business. (The FBI would ultimately find that the Blüm partners did nothing wrong; they won their license fairly and were unaware of any behind-the-scenes maneuvering.) But with Rush, the wound was personal. He had said he was their friend. “And he betrayed us,” Carl recalled. “He was a crook.” Said Forrest, “It was a con.”

The episode left them consumed with guilt and regret. Forrest feared that if they didn’t do something to stop Rush, he would prey on other cannabis purveyors and harm the community. Carl couldn’t bear to even look at his old store, detouring away from that block of West Grand altogether. He pictured all the money he had given to Rush for no benefit at all. Stewing, he complained to friends and associates about Oakland’s licensing process, saying it was corrupt and crooked.

After one such outburst, Carl received an unexpected message from FBI agent Wynar. Carl, curious, called him back. The agent explained that one of his sources had overheard Carl talking about corruption — would he like to discuss further?

And that is how Forrest and Carl found themselves on the 10th floor of the San Francisco federal building in fall 2012, face to face with Wynar.

He didn’t look like an FBI agent. His black hair was long and fell to his shoulders. His beard was gray, and he wore glasses that gave him the air of a scientist or a professor.

Wynar, it turned out, had followed a unique path to the bureau. As a young man he spent seven years as a Marine Corps officer, flying helicopters. Then he studied atomic, molecular and optical physics,  earning a doctorate at the University of Texas at Austin and building lasers to study an exotic quantum phenomenon called Bose-Einstein condensation. After reading some true-crime books about La Cosa Nostra, he noticed that the FBI was looking for technical-minded people. He applied and became an agent in 2003, ending up in Oakland, where he was assigned to investigate public corruption, civil rights abuses and complex financial fraud.

“The triumvirate of white-collar crime,” Wynar called it during the first of multiple interviews at the FBI’s San Francisco headquarters.

Their goal is headlines: ‘We got this trusted public servant doing these scoundrelous things.’—Dan Rush

It’s not typical for the bureau to speak so extensively, but when the newspaper initially asked for comment, an FBI spokesman agreed to make Wynar available, saying, “You caught us at a good time.” Rush, it seemed, had recently vented about his case on a podcast, accusing the government of fabricating evidence. He invented a new word to describe his skepticism of their motives — an inspired blend of “scoundrel” and “scandalous.” “Their real goal,” he’d said, “is headlines: ‘We got this trusted public servant doing these scoundrelous things.’ ”

Apparently this had not escaped the FBI’s notice, and so, three times in 2018 and 2019, at The Chronicle’s request, Wynar answered a reporter’s questions in person, in a room with the bureau’s seal on the wall. During one interview the agent was joined by a supervisor in the public corruption division, and each time a FBI spokesman observed.

Wynar has a friendly, self-effacing conversational style. He’s extremely polite and doesn’t speak in police jargon. These qualities, combined with his long hair, make for a disorienting experience; sit with him for a few minutes, avoid glancing at the gun on his hip, and you can almost forget he’s a cop.

This is more or less what happened with the Andersons: Soon after they got to talking with Wynar, their initial nervousness turned to a sort of relief.

Over three hours, they described a painful experience. The promise of a license. Meetings with politicians, contributions to their campaigns. The increasing demands for money from Rush. Then the betrayal by Superman and his lawyer partner.

Not holding back, the Andersons admitted they had been growing pot. They admitted to suspecting that some of their money was used for bribes, though they weren’t certain. They admitted that, yes, at that moment, they were high, which had been obvious to Wynar the moment they got in the elevator and it reeked so strongly of pot that he wondered whether he might “fail my next piss test” just from contact, Wynar recalled. “But that was the end of it. I told them they can't be like that anymore and they were entirely squared away from that point forward.”

It was a while before they believed us.—Carl Anderson

At first, Wynar didn’t know what to make of their claims. If they were telling the truth, Rush was flagrantly violating the Taft-Hartley Act, a 1947 law that curbs the power of unions. Though the labor movement has long resented Taft-Hartley, viewing it as an attack on working people, the law includes a provision meant to keep union officials honest, barring them from accepting things of value from companies that employ their members. If Rush was taking cash from the Andersons, he was committing potentially serious felonies.

Stranger still were the Andersons’ allegations against TerBeek, the lawyer. The FBI agent was skeptical: Lawyers who commit crimes or work against the interest of their clients can end up disbarred, and for that reason, it was rare to find one who was an actual crook. Wynar wondered whether the pot-smoking witnesses were simply paranoid, or whether they were telling lies as part of a revenge scheme, hoping the FBI would investigate their enemies.

“It was a while before they believed us,” Carl said.

Still, Wynar was struck by the level of detail they provided about money and power in Oakland. The Andersons weren’t sophisticated enough to know what they claimed to know, or to beat back the corruption they were describing. Wynar was also impressed that they were willing to talk at all. “People in the cannabis industry have an extremely conspiratorial view of the Department of Justice, right?” he explained later. “It’s just a — it’s a very bad trust relationship.”

He wondered: What could provoke a couple of pioneering weed dealers to walk into a building packed to the gills with cops and dish about corruption in their world? How bad must it be out there?

7

Although public corruption can take hold anywhere, it usually requires two accelerants — cash and dysfunction — to spread widely. When cash collides with a government process, some officials are tempted to reach out their hands, and when that process is confusing or arbitrary, businesspeople have an incentive to get things done by paying bribes.

The complicated, cash-soaked world of medical marijuana made for a nearly ideal corruption breeding ground. The vague, contested legal status of cannabis — partly regulated by the state, banned by the feds, unevenly embraced by mayors and city councils — left key decisions in the hands of local officials, and the industry was pumping rivers of cash into their cities. Earlier that year, FBI agents in Los Angeles County had caught three public officials in the working-class city of Cudahy and a councilman in Santa Fe Springs taking bribes from a dispensary operator who became an FBI informant.

Wynar says he wasn’t aware of those investigations and had no interest in cannabis until around January 2012, when he happened to meet Derek Peterson, CEO of Terra Tech, the weed company. At the time, Wynar was pursuing a fraud investigation, and Peterson, it turned out, was not the perpetrator but the victim — he was being ripped off by one of his business colleagues.

Until then, Wynar hadn’t even known that people like Peterson existed. The agent always assumed that old-school cannabis types like the Andersons would be the big winners of legalization: The glaciers of the old bans would keep melting, and the outlaws would come in from the cold. Instead, these Wall Street guys were racing across the ice. All they wanted was a free market so they could make money, and they weren’t as paranoid about the federal government.

Instead of refusing to talk with the FBI, Peterson volunteered to be a source. And in late 2012, he ended up providing the tip that first led Wynar to Carl Anderson: Peterson was the one who overheard Carl raging about corruption.

After Wynar sat down with the Andersons and heard their tale, he wanted to use them to gather evidence. In theory, they could become confidential witnesses, recording phone calls and in-person meetings with Rush and TerBeek. This wasn’t exactly orthodox. As far as the agent and his colleagues could tell, no one in the DOJ had ever partnered with someone like Carl Anderson, a man who had once sold and might still sell millions of dollars in cannabis products under a state law that the federal government considered illegitimate.

But Wynar believed there was much to gain and little to risk. Nineteen states had legalized marijuana in some form. Soon enough, in much of America, weed would be just another product, normal as coffee. And in a world where cannabis was being normalized, cannabis firms were not much different from other businesses that require licenses and are therefore vulnerable to corrupt officials. It should be possible to treat them “like they were gas stations, restaurants, nightclubs,” the agent reasoned, and overlook their marijuana activities to probe more important crimes.

After running the idea up their respective chains of command, Wynar and his prosecutor colleagues got the green light. But they soon realized that the father and son were of limited use as informants. The Andersons, it seemed, had already spooked people in Oakland by making noise about corruption, and besides, everyone knew they had no money left. No one was likely to tell them anything incriminating.

Wynar needed another way to get close to the targets. So he contacted Peterson, who had already been providing information on other cases. The weed CEO agreed to help with the new probe. He saw a chance, he says, to “clean up the narrative” of a dirty industry, and he was fascinated by the bureau’s sudden disinterest in making weed busts.

“That was a real paradigm shift,” Peterson recalled. “DOJ going from ‘We’re going to put you in jail for 10 years’ to ‘We’re going to protect the integrity of this business, like we would the gaming industry.’ ” Though he wasn’t close with Rush and TerBeek, he had crossed paths with them before, during Oakland’s licensing sweepstakes, when he was supporting Blüm’s bid as an investor. In March 2013, Peterson began secretly recording conversations with Rush, and later with TerBeek as well. “He had no fear,” Wynar recalled.

A few months after recruiting Peterson, Wynar also reached out to Martin Kaufman, leaving his business card at the office of the Millennial weed entrepreneur. The agent had never met Kaufman and wasn’t sure how he would react.

Kaufman tried not to freak out. He dialed the number on the card. Wynar picked up. His voice was polite, friendly. He said he appreciated the call back. He was looking into public misconduct in Oakland; was it OK if the FBI stopped by?

Initially, Kaufman says, when he was visited by Wynar and an FBI colleague, the agents seemed focused on political corruption. Kaufman didn’t know it yet, because the case was still secret, but recently, in a different investigation, the bureau had caught a state senator, Leland Yee, accepting cash bribes in connection with weed legislation. Yee would later be convicted of racketeering.

The FBI asked Kaufman only about political impropriety at first. It wasn’t until a later meeting, he says, that the agents mentioned the names Dan Rush and Marc TerBeek. At that point, Wynar also revealed that he knew about the bag of cash; his investigation had dug up information about it. The whole episode was “a problem,” Wynar told Kaufman, “a violation of like a dozen tax laws,” but the FBI believed Kaufman was a victim: “We think the money was stolen from you.”

Kaufman didn’t want to be talking to the agents. “I came from a walk of life where you don’t talk to cops and you definitely don’t snitch,” he recalled. Still, he sympathized with Wynar’s distaste for political corruption, and the FBI didn’t seem the least bit interested in Kaufman, his associates or “anyone making things happen” in cannabis. The agents also made it clear that they knew a lot about Rush and TerBeek already — the FBI “was trying to convince me, ‘Hey, they’re trying to fuck you over,’ ” Kaufman later recalled — and he didn’t need convincing that the pair were shady.

Rush will open a door, you walk through it.—Agent Roahn Wynar

Wynar got the sense that Kaufman was truthful and “really smart.” The agents asked Kaufman to rescind his attorney-client privilege with TerBeek so they could use information that would otherwise be protected, and he agreed.

By the late summer of 2013, both Kaufman and Peterson were making audio recordings of the two targets and giving the tapes to the FBI, and the investigation was off and running. The bureau dubbed it Operation Limelight, a nod to the Canadian prog rock band Rush, which shared a name with the target of the probe and had recorded a song called “Limelight,” about the downsides of fame.

Dan Rush would later complain that the informants came in “reading scripts” concocted by the FBI to entrap him. Wynar says that is not how it worked: “The way I tell these guys to do it is, Rush will open a door, you walk through it. He’ll open another door, you walk through it. The more doors you walk through, the more doors he will open.” Wynar did ask the witnesses to raise certain topics. He wanted to hear the targets talking about Kaufman’s bag of cash and what they did with the money. He wanted to know about any corrupt acts by Oakland officials. He also hoped to get a sense of the Rush-TerBeek relationship: Were they equal partners, or was one man controlling the other?

Many of the earliest conversations monitored by the FBI centered on legal cannabis in Nevada, the next state where a massive industry appeared ready to bloom. Peterson and Kaufman had formed a company, MediFarm, to explore opportunities there, and throughout the second half of 2013 and early 2014, as the FBI listened in, Rush and TerBeek discussed how they could help the new company gain an edge. Specifically, they offered MediFarm a special deal with the UFCW — a “bullshit,” toothless labor agreement — that would let the firm reap the political benefits of a union affiliation without actually unionizing.

In return, Rush seemed to expect kickbacks from the cannabis company. He suggested that he kept TerBeek around for this purpose, to serve as “the bank account” that cannabis executives “can write a check to.” Rush described the lawyer as a tool: “He is the monkey. We grind the organ.” He appeared to fantasize about getting rich. Speaking to Kaufman one day, Rush said, “As soon as everybody’s up and running, and you’re a fuckin’ gazillionaire and Derek’s a fuckin’ gazillionaire and everybody else is a gazillionaire … I’m gonna retire, and you guys are gonna give me enough money to make me happy.”

Today, Rush strenuously denies that he ever meant to betray his union members for personal gain, but he admits to getting selfish and losing his way: “Somewhere I stopped doing the right things, so much,” he emailed, “and started doing the wrong things.”

The FBI tapes also caught TerBeek in an unflattering light. He told the witnesses he was a go-to attorney in the cannabis space and a “player with the union,” and he referred to “certain algorithms that I implement” to mask money trails, according to audio transcripts and later testimony by an IRS agent. TerBeek now chalks up these comments to desperation: He overstated his command of the situation because he had long since lost control of it.

Over the previous few years, he says, Rush had grown more predatory, pressuring him for money through multiple channels. First, Rush asked for a credit card. TerBeek gave him one and paid the bill each month. According to an FBI affidavit, Rush ultimately charged $110,000, including some large payments to Verizon Wireless that turned out to be phone bills for Hells Angels. (In a court filing, Rush denied this.) On top of that, Rush said he was entitled to a sizable portion of TerBeek’s legal fees, claiming that the two men were “business partners” because Rush was steering him clients — cannabis companies and workers’ comp cases. “Ours not yours ours,” Rush texted TerBeek once, in a flurry of abusive messages pressuring him to pay up. “THATS MY BLOOD SWEAT TEAR.” TerBeek started kicking back money to him in 2010. The lawyer called these payments “haircuts.” In a November 2013 email to Rush, TerBeek calculated that Rush had driven $1.3 million in income to his firm; of that figure, the lawyer wrote, Rush had received $380,000 in haircuts, amounting to 30% of the lawyer’s gross revenue.

TerBeek realized that this arrangement was flat-out illegal, he said later. Under the Taft-Hartley Act, Rush wasn’t supposed to be profiting from his union role, and TerBeek wasn’t supposed to be paying him, either. If they ever got caught, the credit card payments and the haircuts might be considered illegal payments to a union official — serious felonies — and TerBeek could lose his law license. But despite his awareness of the risk, the lawyer says he felt trapped, afraid of defying Rush. “Whatever money I paid him was, in essence, extortion,” he later explained. And whenever TerBeek considered going to the FBI and fessing up, he stopped himself. What if he ended up with a drug-warrior agent who decided to go after him for his cannabis activities?

TerBeek started to leave little cries for help in electronic and paper records, just in case some future investigator cared to go looking. He sent Rush an anguished email in November 2013 with the subject line “Cant do this anymore”; Rush ignored it. He started writing “haircut” on the memo line of checks made out to Rush, a code that was supposed to scream “I’m being extorted”; Rush didn’t seem to notice. And in the meantime, TerBeek continued looking for a way to permanently sever his connection with Rush, which would require tying up a big loose end: The bag of cash. The outstanding loan from Kaufman.

Can’t do this anymore.—Marc TerBeek

It was still looming, an unexploded bomb of debt. Three years earlier, Kaufman had loaned $500,000 to Rush, followed later by an additional $100,000. The total debt now stood at $600,000. But Rush had never repaid the principal and seemed to have no intention of doing so; TerBeek was still taking care of the interest payments himself. What would Kaufman do when he learned for sure that his money was gone?

TerBeek, nervous to find out, broke the news first to Peterson, the calmer of the two business partners, and asked whether they could work it out. Soon the lawyer proposed a solution: Kaufman should forgive the debt. Out of gratitude, basically.

In a January 2014 conversation that the Terra Tech CEO secretly recorded, TerBeek argued that he and Rush had been instrumental to Kaufman’s success. In particular, Kaufman had become a player in the dispensary market through his involvement with Blüm Oakland — but that only happened after the Andersons were disqualified, making room for Blüm to slide in, TerBeek argued.

And the lawyer claimed he was partly responsible for pushing Carl aside. In that conversation and others that were secretly monitored by the FBI, he seemed to confirm what Carl had long believed — that TerBeek and Rush intentionally double-crossed him. On the tapes, TerBeek described a complex, Machiavellian power play, executed without Kaufman’s knowledge: Rush “convinced Carl not to pay taxes” on his cannabis grow and then snitched on him to Oakland officials, while TerBeek told Carl to “concoct a complete bullshit” excuse about leaky refrigerators to conceal the fact that he was using large amounts of electricity to grow weed. Then the city realized that Carl was lying and tossed out his license application. TerBeek summed it up with a pithy line: “We fed Carl to the wolves,” he told Peterson.

TerBeek now claims he was exaggerating, taking credit for Carl’s mistakes in a desperate attempt to get the debt canceled. In court testimony, TerBeek said he didn’t realize at the time that Rush told Carl not to pay taxes on his grow, and in an interview with The Chronicle, TerBeek said he tried to steer Carl down a better path, advising his client to pay the taxes.

TerBeek also says Carl came up with the leaky-refrigerator lie on his own. But the FBI and a judge would not find this explanation credible, and TerBeek would admit in court that he told Carl: “Maybe you can convince the city of Oakland that there were some leaky seals that contributed to all this power drain, but you’re going to need to get an expert to opine to that.”

As for Rush, he denies that he played any role whatsoever in Carl’s ouster: “I have never dropped a dime on anyone for ANY REASON!!! EVER, NEVER!!” he emailed.

In March 2014, two months after TerBeek raised the possibility of debt forgiveness with Peterson, the lawyer brought Rush into the discussion. Peterson told the two men he was sympathetic to the idea — “It’s a fucking horse trade” — and asked for a set of talking points to share with his business partner, Kaufman, that would explain why Kaufman should cancel the $600,000 debt. TerBeek agreed to write a “detailed memorandum” but said he wanted to exchange it in person, not by email. Then Rush chimed in, seeming to endorse the plan to wipe out his personal debt and mentioning his union clout in the same breath. He told Peterson that no matter what Kaufman decided — whether he forgave the debt or not — “I’m going to give you guys everything I have,” Rush told Peterson. “Because you’re going to be union employers. If (Kaufman) wants to give me consideration for that, thanks.”

In the meantime, the FBI started to turn up the heat on the targets. At the direction of agent Wynar, the witnesses pressed Rush and TerBeek to make things right with the outstanding loan, lest there be unpredictable consequences. Kaufman told the lawyer that some of his missing cash had originally come from a “dangerous meth dealer” named Michael Steele, who expected repayment. Steele wasn’t a real person — this was an FBI ruse — but a bit later, an undercover agent showed up at TerBeek’s office in the persona of Steele, sporting greasy hair and loose-fitting clothes. TerBeek thought he looked every bit the badass dope dealer.

In April 2014, TerBeek and Rush flew to Las Vegas, where TerBeek delivered the promised memo to Peterson — the case for debt forgiveness. It had two main sections. The first, titled “BENEFITS REALIZED FROM RELATIONSHIP,” appeared to take credit for sabotaging Carl Anderson. According to the memo, the “former occupant” of Blüm’s dispensary — Carl — was “advised” to “not pay taxes” on the weed he grew and then was told “to justify tax decision with outlandish story,” and “as a result,” his license bid was disqualified, clearing the way for Blüm to take over. The other section of the memo, “RISK OF ADVERSARIAL PROCEEDING,” was essentially a list of threats — bad things that might happen to Kaufman if he insisted on getting his money back. One such risk was criminal exposure: The loan from Kaufman had been part of a scheme “to launder” cannabis funds, the memo said, and if the scheme were ever exposed, Kaufman’s current and future cannabis licenses and “maybe freedom” would be in peril.

All in all, the memo was comically explicit — essentially, a set of notes on a criminal conspiracy — and Rush and TerBeek have since tried to distance themselves from it. Rush says the memo was “not my doing” and claims he had “VERY LITTLE understanding” of its content, despite FBI tapes that show Rush was in the loop. As for TerBeek, he says the memo isn’t quite accurate; on the page, he says, he framed some facts “a little differently than the actual reality,” to persuade Kaufman to forgive the debt.

Still, the lawyer says, he felt “dirty and soiled” about the whole effort. His frustration boiled over as soon as he and Rush boarded their flight home from Las Vegas. When TerBeek got to his seat, he tried to stuff his suitcase into the overhead compartment. It wouldn’t fit. Frustrated, he punched the bag. Then he smashed it harder, again and again, cursing, sweating, drawing concerned stares from the flight attendants.

Rush sat there, watching. Then he started to laugh.

One row behind them, a man with long hair observed the two men with interest. It was Wynar. He had been in Las Vegas to monitor the meeting, and by chance, he’d booked the same flight home as his targets. TerBeek, he thought, appeared to be bearing a terrible weight. And Rush’s callous response seemed to say a lot.

It was only a quick snapshot of a complex relationship. But at that moment, Wynar felt he knew exactly how the case was going to end.

8

At 7 a.m. on Jan. 7, 2015, a clear winter morning in Berkeley, Marc TerBeek’s wife, Jasmine, heard a knock at their front door. Two men were standing on the steps. They showed her FBI badges and asked to talk with Marc. She went and got him, confused about what was happening. He walked to the door, still groggy, and saw the two agents: one a squarish G-man, the other more like a hippie, with shoulder-length black hair and a peacoat. The man with long hair introduced himself as Special Agent Roahn Wynar. He was there to talk about Dan Rush, he said, and it was really important.

TerBeek said he didn’t want to talk in front of his family. Could they meet in a few minutes at a Starbucks up the street?

Wynar agreed, but issued a warning.

“You gotta show up. And do not call Dan.”

“Oh, I’m not gonna call Dan,” TerBeek replied.

This list is just a laundry list of criminal acts, right?—Roahn Wynar

The way he said it, with a small nervous laugh, as if calling Rush was the last thing he wanted to do, seemed to confirm Wynar’s suspicions about the relationship.

In the beginning of Operation Limelight, the agent had wondered which of the two friends was calling the shots. Now, after more than two years on the case, he believed that “Rush was the absolute mastermind” and “TerBeek was the lackey,” as he later recalled. Agents had watched the dynamic play out with their own eyes. One day, after Rush had asked Peterson for $10,000, the FBI provided Peterson with the cash in an envelope, to see what Rush would do with it. The bureau videotaped the handover. When Peterson counted out the cash and tried to hand it over, Rush did not take it. Instead, he pointed at TerBeek, steering the money to the lawyer.

TerBeek seemed to be functioning as a shield, “the front-man surrogate for all of Rush’s misdeeds,” which created a challenge for the FBI. Many of their audio recordings featured TerBeek’s voice, not Rush’s; Wynar worried that when the case eventually got to trial, Rush might pin the blame on the lawyer and escape accountability. Before bringing Operation Limelight to a close, the agent wanted to learn more, to get closer still — and for that, he needed TerBeek’s help.

When they reconvened at Starbucks, no one bought coffee. Wynar did most of the talking.

The government, he said, was prepared to seek a criminal indictment against both TerBeek and Rush. In fact, a few miles away at that very moment, FBI agents were conducting a search of TerBeek’s law office. He and Rush would probably be prosecuted together.

This was no bluff. The IRS agent on the case later testified that “we had enough evidence to prosecute Mr. TerBeek for five money laundering-related felonies,” and the bureau had been stunned by how far the lawyer had sunk. When Wynar first saw the “BENEFITS REALIZED” document that TerBeek brought to Las Vegas, “My jaw dropped,” the agent recalled. “This list is just a laundry list of criminal acts, right?” For him, it confirmed that the Andersons had been telling the truth all along: They really were victims of a conspiracy, squeezed out of a license and their storefront in Oakland — and TerBeek, Carl’s own lawyer, had “literally betrayed him.”

Now, Wynar gave TerBeek a choice. He could sit next to Rush at the defense table. Or he could “help steer the ship in a different direction.”

TerBeek tried to invoke attorney-client privilege, telling the agents he was Rush’s personal lawyer. Wynar shook his head. He knew from the informants’ recordings that Rush and TerBeek were deeply involved with things that had nothing to do with legal representation.

“You know, Dan Rush has brought a lot of misery to a lot of people,” Wynar told him. “But we’re not here to go after cannabis.”

Beat by beat, TerBeek’s heart began slowing to a normal tempo. For years he had been looking for a way to cut Dan Rush out of his life. Now here was the FBI, promising to do it for him.

Wynar said it was a big decision to make, and TerBeek should probably hire his own attorney to think it through, which he did. Over the next two weeks, an experienced criminal defense lawyer represented him in debriefings with the FBI, and TerBeek agreed to become an informant. In the bureau’s Operation Limelight documents, he would be known by the alias Warsaw.

His mission was straightforward: Connect with Rush, talk about the future of their business relationship, and get the details on tape. It seemed likely that Rush would want to continue the partnership; after all, it was a major source of his income. And because the partnership was built on a corrupt foundation — kickbacks from cannabis companies — Rush was bound to discuss potential crimes.

At least we came out the other side, man.—Dan Rush

On Jan. 22, not yet wired for sound, TerBeek met with Rush for the first time since the FBI search of his law office two weeks earlier. Rush had heard about the raid and was anxious about it, wondering whether he was a target. At the FBI’s direction, TerBeek lied, assuring Rush that the bureau was investigating someone else — Carl Anderson, his former client — and Rush was in the clear. Rush seemed to buy it.

Two weeks later, on Feb. 7, TerBeek made his first secret recording at a labor dinner in San Francisco’s Marriott hotel. He was so nervous that he started to sweat and failed at first to activate the recording device. He was convinced that Rush would see through him and figure out he had flipped — and then what? Finally, he captured some small talk.

“So how are you doing?” TerBeek asked Rush.

“I’m tired,” Rush replied.

“Yeah,” TerBeek said. “God, we’ve been through so much together.”

“You know?” Rush said. “And at least we came out the other side, man.”

“We made it,” TerBeek said.

“We made it, brother,” Rush said.

At first, the bureau wasn’t sure whether TerBeek could handle the stress of his new role. “It’s a very emotionally difficult circumstance,” Wynar later explained, “especially with TerBeek and Rush.” The pair had been partners for more than a decade, forming a deep psychological bond; even if TerBeek was now sick of Rush and motivated to succeed as an informant, could he actually pull it off?

“Warsaw” continued to make recordings in the weeks that followed. In communications with the FBI, he referred to Rush by a code name he chose himself: “Clark,” after Clark Kent, the alter ego of Superman. Sometimes TerBeek and Rush met at their favorite pho place in Oakland. The target wore sport sweats. The informant dressed in business casual, the recording device tucked in the left-hand breast pocket of his jacket. TerBeek soon added a backup recorder, which he kept in a leather satchel, and provided Rush with a “burner” cell phone he said would ensure the secrecy of their text-message exchanges. In fact, the burner was monitored by the FBI.

During their early meetings, Rush veered wildly from mood to mood. Sometimes he appeared defeated, complaining that he wanted to retire from the union but was afraid of disrupting his health insurance, which he could not afford to lose. By the start of that year, diabetes had taken a toe on his right foot, amputated by surgeons, and while recovering in the hospital he’d become addicted to opioid painkillers. In late February, he told TerBeek he was checking himself into a two-week drug rehab program.

When the two men reconnected, Rush raved about the facility, saying he had weaned himself off the painkillers and learned about yoga. But later in the same conversation, he surprised TerBeek by mocking the maxims of Alcoholics Anonymous, which mandates surrender to a higher power. “Fuck all that shit,” Rush scoffed. “You know, God’s will is that we fucking thrive.”

Gradually, TerBeek warmed to his task. He found that it wasn’t difficult to pretend that Rush was still his friend, because he had been doing that for years. And he was coming to appreciate his FBI handler, agent Wynar, who was giving him a chance to redeem himself, and who also happened to be a fellow science-fiction geek. One day, while checking in about Operation Limelight, the informant and the agent cheerfully discussed the lightsaber design in a recently released trailer for “Star Wars: The Force Awakens.”

The harder thing for TerBeek was coming clean to his wife. Jasmine had known that her husband and Rush were close, but she never guessed the true nature of the relationship. Now TerBeek told her the whole story, bit by bit, “every night, late at night, a couple of hours a night, for months,” she later testified. He told her he had made terrible mistakes. He told her he felt betrayed by Rush and had “missed the signals” of when their friendship morphed into “something very different.” He told her he was afraid of going to prison but was trying to make things right. He told her he was sorry.

All he wanted now was to do a good job as an informant. But even knowing that the bureau was watching his back, he remained terrified that Rush would discover the hidden audio device and retaliate physically.

Rush’s vindictiveness seemed to be growing. He nursed grudges against certain high-level UFCW officials, complaining to TerBeek that they were “fucking idiots” with “no fucking vision” and describing how he planned to ruin them. “I’m gonna put him in a trick bag where he’s gonna lose his fucking wife,” Rush said of one official in his own union. “He’s gonna lose his fucking house. He’s gonna be a shit bag in the media.”

On another occasion, he said that two particular UFCW officials “should be looking very closely at who is sitting next to them on planes” and “in the room next door to them in fucking hotels.” Then he referred to “resources I have across the fucking continent.” TerBeek understood “resources” to mean the Hells Angels or other outlaws. In an email, Rush denied that these were threats, saying he was just speculating about the results of screwups by union colleagues: “A lot of people got on the cannabis campaign and started partying,” he wrote. A UFCW spokesman declined to comment on any matters related to Rush.

That’s your agent in charge, pissed off because you’re taking too long.—Dan Rush

When agent Wynar listened to these recordings, he concluded that Rush was just bloviating and TerBeek was in no danger. Rush “implied that he had access to this worldwide network of violent thugs,” Wynar recalled. “And that’s just not how the Hells Angels work.”

But one afternoon in March 2015, a lunch between TerBeek and Rush took an unexpected turn.

They met at their usual Oakland soup joint, Pho Mekong, and within a few minutes of ordering, Rush started asking pointed questions about the federal search of TerBeek’s law office two months earlier. What was written on the FBI warrant?

“It — it — it described the office,” TerBeek said.

“Uh-huh,” Rush said.

He kept probing: Had the FBI followed up after the raid? Had the lawyer received any calls from the feds? “Wires, faxes, smoke signals?”

“No, no, nothing,” TerBeek said.

“I can’t tell you how much better I feel,” Rush said.

“Good.”

“OK? And I love you with all my heart,” Rush said.

“I love you, man, yeah,” TerBeek said.

Then Rush said: “I feel like fucking Tony Soprano talking to Big Pussy.”

The reference was not lost on TerBeek. In the TV series “The Sopranos,” Big Pussy is a close friend of mob boss Tony Soprano who flips and wears a wire for the FBI. When Tony finds out, he shoots him in the chest.

Rush seemed to relax after that exchange, content with TerBeek’s assurances, and their conversation drifted toward business. Rush said he wanted to keep their partnership moving forward, but on new terms: Instead of taking a 30% cut of TerBeek’s fees, as before, Rush wanted 50%.

“Everything you’re working on originated from me,” Rush said.

“I understand,” TerBeek said.

Rush appeared to be trying to refresh their corrupt partnership, just as TerBeek and the FBI had anticipated.

Then, several minutes later, a car screeched around the corner at high speed outside the restaurant.

Rush looked straight at TerBeek.

“That’s your agent in charge,” Rush said, “pissed off because you’re taking too long.”

TerBeek felt his blood drain to his toes. Was there a leak in the investigation? He forced out a laugh.

“That’s funny, man,” he said. He joked that his FBI handler drove “a real shitty car” and wished he could upgrade to an agent who drove a Lexus.

Years later, Rush would remember this moment, saying, “I knew deep down inside, something was off.” But he had not yet figured it out. He laughed, too.

9

It wasn’t until the summer of 2015 that the agents of Operation Limelight felt ready to end the investigation and move toward arrest. Their decision to wrap it up was triggered by a particularly wild piece of audio: According to the bureau and a transcript of the conversation, Rush made an extortion threat against a Berkeley cannabis company.

The threat had to do with Rush’s desire to leave the union. “I want to retire at 55,” he told TerBeek, “I want to get out of where I am, I want to stop traveling.” He imagined making a soft landing at a private company, with a six-figure salary with health insurance and a 401(k). He had fixated on Amoeba Music, a record store chain that wanted to convert the Jazz Room of its Berkeley location into a weed dispensary. Amoeba was applying for a city cannabis license. Rush, as a Berkeley cannabis commissioner, held power over the company’s fate — and TerBeek was Amoeba’s lawyer, giving Rush another point of leverage.

Through TerBeek, Rush had already asked Amoeba to give him a job, but no answer had come, and on June 4, 2015, Rush’s patience appeared to run out. He claimed he had been “breaking my ass” to make sure the company got a license, “and if they think they’re going to fuck with me, fuck them. I’m not kidding. …. I will go in there and fucking trash the whole fucking thing.”

Two months later, on Aug. 11, 2015, Rush and TerBeek were having lunch at Pho Mekong when agents in FBI jackets approached the table. TerBeek looked at Rush and saw a “small slight smile on his face” as the union official realized what was happening. The agents handcuffed the lawyer and led him away — a pretend arrest, planned in advance, to make Rush believe that he and TerBeek were both going down — and for the first time, Wynar sat with Rush face to face.

The agent wanted to see whether Rush would consider working with the FBI, to provide leads about other crimes. Wynar delivered the line he always uses in such situations: Everybody has a chance to do the right thing, he said. Help us turn this big federal battleship in another direction, and I promise you won’t be sorry. Rush was polite. He said he didn’t know much. (“I’m not the FBI’s boy,” he explained later.) The agents arrested him, then searched his Oakland home, seizing papers and documenting personal photos on the walls: Rush posing next to outlaw bikers, Rush smiling with local and national Democratic politicians.

I’m not the FBI’s boy.—Dan Rush

Wynar had long ago concluded that Rush was “a chronic liar” who exaggerated his influence to con people, and he viewed the photos of elected officials in that light; Rush “could literally, you know, talk a turkey into a Thanksgiving banquet,” Wynar recalled. He never did figure out the true scope of Rush’s clout. But he didn’t need to. Operation Limelight, which began as a probe of public corruption in Oakland, had evolved into a fraud case against a union official, and that is how it was finally announced to the world, a month after Rush’s arrest, when a grand jury indicted him on 15 criminal counts, including union corruption, honest services fraud, attempted extortion, conspiracy and money laundering.

None of the charges mentioned the Andersons or their claims. Instead, the indictment focused on things of value that he allegedly took or tried to take from others — the credit card payments and “haircuts” from TerBeek, the debt forgiveness from Kaufman, the Amoeba job. In a later court filing, prosecutors would call it “an insidious pattern of corruption,” concluding that he illegally pocketed at least half a million dollars, possibly more: “Despite efforts, the government was unable to determine where all the money went.”

Rush pleaded not guilty. The Andersons attended his initial court hearing. Carl wore a suit, Forrest a T-shirt with a Superman shield glowing Kryptonite-green. “Dan could not stop glaring,” he remembered.

What “got Dan in trouble … was the money he took. Right? And you can’t change that.”—Roahn Wynar

Now that the lurid details of the case were finally public — the bag of cash, Hells Angels, cannabis execs turned informants — the news raced throughout Bay Area cannabis circles, and no one knew what to think. Even those who saw Rush as flawed never imagined he was a crook. “He’s a good guy that did dumb stuff,” said Dale Sky Jones, who’d worked with Rush on the Proposition 19 campaign.

Rush’s friends insisted he had done nothing wrong, arguing that he was just blustering and “talking shit” on the recordings, Brian Webster said. He and others pointed at federal prosecutor Melinda Haag, speculating that she had ginned up the case to punish Rush for opposing her marijuana crackdown. Haag stepped down as U.S. attorney in September 2015, the month Rush was indicted. Now in private practice, she did not respond to a request for comment.

As Rush put it in an email, “Melinda Haag would have never paid attention to any of this if I was organizing Peach pickers and going into development deals with peach Farmers” instead of with cannabis companies. To his fans, he was nothing less than a political prisoner. “I still marvel at what the hell the guy did,” said Troy Duffy, the filmmaker. “He fuckin’ legalized weed, bro. What the fuck? Holy shit.”

The FBI says this whole narrative is ridiculous. Operation Limelight developed organically, driven by tips and old-fashioned detective work, Wynar says; Haag played no role. And the case was never about weed to begin with. It wasn’t about politics or ideas or even the words on the recordings. It was about something more concrete: money.

“The things that got Dan in trouble wasn’t the shit he said,” Wynar explained. “It was the money he took. Right? And you can’t change that, right?”

Rush’s defenders also blamed the informants for snitching — TerBeek, who had flipped on his onetime friend, and Peterson and Kaufman, who emerged from the investigation with their cannabis companies not only intact but thriving. Had they cooperated to save their own skins and get ahead in the industry? Peterson, Kaufman and the FBI all say no — the bureau considered them victims, and they volunteered the information. And for Kaufman at least, the publicity about his role caused no end of grief.

“I really hated most of that year of my life,” he said. Some of his business associates — people “who might bury me” if they thought he had ever mentioned them to the FBI — became paranoid. He had to sit with them, one by one, and explain: No one in cannabis got so much as one of their feathers ruffled by this. You’re OK. He went on to partner with Salwa Ibrahim on a chain of Blüm-branded dispensaries in San Leandro, Las Vegas and Reno, winning licenses without the help of any union and joining forces for a time with Peterson’s Terra Tech. Since then, Kaufman and Ibrahim have opened a new dispensary in Oakland, an outpost of a popular weed brand called Cookies: “It’s like the Coca-Cola of cannabis,” Kaufman said.

Meanwhile, as Rush’s case crawled toward trial throughout 2016, he found himself frozen in place, speaking only in legal motions. Rush’s attorneys argued that he was being vindictively prosecuted for his cannabis views; the government countered that the case “is not about marijuana,” adding that Rush “has never been more than a bit player in the marijuana industry.”

On the advice of his attorneys, Rush laid low and didn’t defend himself in the media, which he found nearly unbearable. It got harder to remain silent as the months went on, because out there in dispensaries and legislatures, the wave of the legal pot movement was crashing onto beautiful new shores. In November 2016, California voters passed Prop. 64, a successor to Prop. 19, finally legalizing recreational marijuana in the state, and Nevada, Maine and Massachusetts did the same. One in 5 American adults would soon be free to buy weed for pure enjoyment; marijuana was now decriminalized to some degree in a majority of states.

The UFCW, meanwhile, continued to organize the industry. Today it is the top union in cannabis, with the Teamsters a distant second, according to a UFCW spokesman. Former Local 5 President Ron Lind said Rush deserves much of the credit: “His idea that the UFCW would be the union for cannabis workers? … It’s all really happened.”

Still, unionized companies account for only a small slice of the overall market. Today, the driving force in the legal cannabis market, estimated at $13 billion nationwide, is Big Capital — the tide of money that Rush always dreamed of unleashing. Large corporations and rich investors are crowding out some small cannabis companies and acquiring others in a frenzy of mergers, and wealth is filtering up and up, into fewer and fewer hands. Rush wanted cannabis to be just like liquor, and increasingly, to the sadness of many, it is.

In early 2017, Rush started running out of legal options when TerBeek took a plea deal and testified against him. The lawyer-turned-informant admitted he was guilty of one felony — making an illegal payment to a union official, Rush — as well as a misdemeanor charge of violating bank rules that prohibit “structuring.” At this point, Rush says, he was running out of money to pay his legal team, and the stress was taking a toll on his health, so he decided to give up, pleading guilty to three of the 15 felonies in June 2017.

He admitted that he violated the Taft-Hartley Act for receiving debt forgiveness from Kaufman. He also confessed to one count of honest services fraud and one of conspiracy to structure and launder money. The government dismissed the other 12 counts.

Hoping to avoid prison, Rush enlisted friends and family to ask for a sentence of probation. His daughter, Esther Kelly Rush, told the judge that Rush was a caring father and “the heart and foundation of this entire family.” Political figures including ex-Attorney General Bill Lockyer sent letters on Rush’s behalf, and colleagues from Bay Area recovery circles submitted dozens of short video testimonials. “To the many men and women who Dan Rush helps to become and remain clean and sober, he is their ‘superman,’ ” Rush’s attorneys wrote.

Prosecutors sought a prison sentence of 42 months, arguing that Rush had acted out of selfishness, not genuine concern for working people or the cannabis movement: “The interests of workers and patients were subordinate to her own greed.” Having earlier dismissed Rush as a “bit player” in cannabis, the government now called him “privileged,” writing that his union job carried “a sizable income” and “his political connections were real.”

The judge decided on 37 months in prison.

TerBeek escaped that fate. After prosecutors praised his “exemplary” cooperation, a judge let him off with three years of probation and a $7,500 fine, and the State Bar of California suspended his law license. He enrolled in weekly group therapy sessions at the Other Bar, an organization that helps lawyers who are battling addictions, and graduated in 2018 with hopes of returning to the law. The State Bar had other ideas, asking a court to disbar him for good, but during a hearing last year, Wynar made an appearance and said TerBeek had been manipulated by Rush, a “bully” who trapped the lawyer in an “abusive relationship.”

Though the judge ruled that TerBeek should get a second chance, the State Bar appealed, and the case remains open. If he wins his law license back, TerBeek says, he will go back to doing “what I had always done before, which was to represent the powerless against the powerful.”

10

Some outlaws go straight as they age. Either they get rich enough to erase the evidence of how they made the money in the first place, or the culture changes and catches up with them, deciding they were heroes all along. Samuel Bronfman, a Prohibition-era bootlegger, spun his black-market success into the vast Seagram empire. LSD pioneer Timothy Leary inspired Beat poets and John Lennon, living forever in songs and books. Indicted computer hackers of the 1980s ended up doing journalism and running corporate security firms. Dan Rush ended up at Terminal Island Federal Correctional Facility, a low-security prison on a mudflat near the Port of Los Angeles.

“This place TI is a trash pit of misery,” Rush said in an email.

He described the routine he was following while in prison. Each morning he woke up at 4 in his cell and went to the nurse’s station for the first of two daily insulin shots. If he felt well, he then spent the rest of the day writing letters to friends and talking on the phone with Margaret Black, whose sons he mentored. (Rush and his wife divorced after he was incarcerated; he is now in a relationship with Black.) He also passed the hours by working on a book about his life, writing chapters longhand in his cell and mailing them to Black, who edited the prose and handed the results to Troy Duffy for adaptation into a screenplay.

How did he ever land in prison? What really happened? Rush’s answers to those questions have been evolving. In late 2017 and early 2018, around the time of his sentencing, he lashed out at the government, giving three extended, bitter interviews to East Bay podcasters and claiming that Operation Limelight was built on lies. Last year, however, Rush began striking a different tone, filling his emails with expressions of regret: “I COMMITTED THE CRIMES I PLEAD GUILTY [to],” he wrote, saying he deserved to be in prison, was glad to pay his debt to society and was sorry to those he hurt: “THE VICTIMS OF MY CRIMES (especially Kaufman and my own family), my union members, my union and the people that placed their trust and confidence in me.”

Socially, prison was turning out to be a relatively easy experience for Rush — a large guy who lifts weights, knows a bunch of Hells Angels and is famous for trying to legalize weed. “Many cannabis prisoners here,” he said. “We take good care of each other.” The problem was his physical health. According to medical records he submitted to a federal court last year, his diabetes caused sores on his right foot and his penis that became infected. A festering wound opened on his foot, forcing him to use a wheelchair.

History is on my side. ... I know it!!!—Dan Rush

In July 2019, Rush filed a motion to reduce his sentence under the First Step Act, a criminal justice reform law that allows seriously ill prisoners to petition for “compassionate release.” Black told a judge she planned to care for Rush at her home in Hayward. Prison officials and federal prosecutors opposed Rush’s request, arguing that he was not sick enough to qualify for early release, and in January, the judge ruled against him.

But then, still in prison, he received a new set of orthotics that improved his mobility and let him ditch the wheelchair, and because he was now more self-sufficient, prison officials decided he could serve the remainder of his sentence in a halfway house in San Francisco.

On Tuesday, March 24, after 26 months at Terminal Island, Rush walked out the door, not quite a free man but freer than before. Black and his daughter picked him up. They hugged and drove north, toward the halfway house, spending the next seven hours in the car together, without any guards or bars, just like any normal family. Looking out the window as they approached San Francisco, Rush was amazed to see how the coronavirus pandemic has altered the city: empty streets, closed stores.

His family brought him to the halfway house. For the foreseeable future, Rush will live here, wearing an ankle bracelet; officially, his sentence extends to the end of August, but he could be released earlier to home detention. Cannabis is not allowed in the halfway house in any form: no extracts, no CBD, no hemp. He says he finds that policy “draconian” in principle, but it doesn’t bother him personally, because he doesn’t use cannabis anyway: “I’ve been clean and sober for some decades.”

He says the halfway house staff does a good job. He has a roommate, a friendly man in his 30s who speaks little English, and they share a big iron bunk bed: “I’m the old man, he’s the kid, so he gets the upper bunk.” He has been getting used to his new iPhone, smoking and texting friends and checking his Facebook page, where friends and supporters have cheered his release and welcomed him home. Rush has had a lot of time to plan his second act. He says he intends to be vocal on drug-reform issues, pushing to create new support systems for recovering addicts and to decriminalize drugs beyond marijuana. “I can see clearly what my next job(s) are,” he emailed. “History is on my side. ... I know it!!!”

It seems possible he will emerge from his prison experience empowered. He has a story to tell and an audience eager to hear it. And he has a community — the very thing the Andersons say they have lost.

“I’m devastated,” Carl Anderson said recently at an East Bay coffee shop.

“My life has taken a drastic downward spin,” said his son Forrest, who arrived walking slowly with the aid of a cane.

The ordeal in Oakland unpeeled them layer by layer. The first insult was the fraud itself, the pain of being cheated. Then the FBI investigation exacted its own surprising cost.

They didn’t regret going to the bureau; in fact, the father and son were grateful for the work of the agents and impressed and surprised by their sincerity. “In all honesty, they were protecting our industry, and that’s the amazing part that people don’t understand,” Forrest recalled. “To me, that was a first.” The problem was lost time. The Andersons imagined that cooperating with the government would take a few hours. But the investigation they sparked ended up taking three years. That whole time, the family “didn’t dare” grow weed or apply for a license outside Oakland, Carl said, fearing the FBI would disapprove.

So the Andersons never got a chance to thrive in the world they helped bring into being. As California legalized recreational weed, and other cannabis activists and entrepreneurs lived their dreams, Carl and Forrest could only watch. All they gained, in the end, was the moral satisfaction of cleaning up an industry that no longer had any place for them.

A few months after Rush was arrested, the Andersons left Oakland, settling in a city they do not wish to disclose. Forrest got a job as a cable TV and internet installer, only to be injured when a car ran a red light and T-boned his company truck, resulting in damaged discs and pinched nerves. Carl says he lives in a trailer now and sees almost no one. The Oakland marijuana community used to be the most important thing in the Andersons’ lives. Now they are exiled from it, because they tried to save it, and they don’t ever want to go back.

“We just want to be hermits,” Forrest said.

He gave a wince of a smile, picked up his cane and walked away, slowly, his father’s hand steadying his back.