By Mark Gutglueck
In week fourteen of the Colonies Lawsuit Settlement Public Corruption Trial, what were likely the most impactful exchanges in court with regard to the eventual determination of guilt or innocence of the accused came on Wednesday April 12 outside the presence of the two juries hearing the case, as attorneys for the prosecution and the defense argued the admissibility of two elements of testimony and evidence.
Ultimately, Judge Michael A. Smith made one ruling in favor of the prosecution and another which favored the defense.
In each instance, one of the parties was seeking to limit the other from exploring information before the juries. With regard to the first issue, the defense attorney for Jim Erwin, Raj Maline, was seeking to elicit from one of the county’s in-house lawyers, Mitch Norton, how prosecutors had manipulated his testimony before the grand jury that indicted the four current defendants to prevent him from offering information the defense maintains exonerated rather than implicated those now on trial. Maline’s suggestion was that the prosecution had engaged in misconduct by hiding this information, and the prosecution spiritedly disputed that, telling Judge Smith that it would be improper for Maline to prejudice the jury against them. With regard to the second issue, the defense sought to prevent the prosecution from calling to the witness stand an attorney for the county, Thomas Winfield, who several years before the filing of criminal charges against the current defendants had advocated that the county file a breach-of-contract civil lawsuit against the company at the heart of the case, the Colonies Partners. The prosecution wanted to be able to question Winfield because it believes that Winfield could illustrate for the jury that it was the Colonies Partners that had engaged in fraudulent activity with regard to the development upon its property that was central to the lawsuit the Colonies Partners filed against the county. The criminal charges in the case stem from an alleged conspiracy involving, graft, extortion and bribery by one of the principals in the Colonies Partners, Jeff Burum, working in concert with Erwin to have county officials settle that lawsuit brought by the Colonies Partners against the county for what prosecutors allege was an unjustified $102 million. The prosecution wanted to use Winfield to offset suggestions made by defense attorneys that the county had indeed interfered in the Colonies Partners project in such a way that the lawsuit was fully legitimate and that the $102 million settlement was a reasonable one.
The first matter ruled upon by Judge Smith was precipitated by a series of objections raised by California Supervising Deputy Attorney General Melissa Mandel to questions being posed by the defense attorney for defendant Jim Erwin, Raj Maline, to deputy county counsel Mitch Norton, who had overseen all of the legal jousting that had gone on between the Colonies Partners and the county with regard to flood control issues at the Colonies at San Antonio residential and Colonies Crossroads commercial subdivisions in northeast Upland. When the county’s flood control district insisted on using between 67 and 72 acres of the 434-acres purchased by the Colonies Partners in 1997 for a catch basin to accommodate storm waters and thereby interfered with the Colonies Partners’ development plans, the company in 2002 sued the county. In 2006, a bare 3-2 majority of the county board of supervisors approved settling that litigation with a $102 million payout to the Colonies Partners.
Before that settlement was voted upon, Norton, along with three separate outside law firms the county had hired, vigorously opposed the Colonies Partners’ claims and allegations contained in its lawsuit. After the settlement, Norton represented the county nearly as vigorously in its effort to recover from its insurers a major portion of money paid out to the Colonies Partners. In seeking to make that recovery, which was contested by one of the insurers, Norton made representations that in large measure paralleled arguments since made by the defendants, who were indicted almost-four-and-a-half years after the settlement was ratified by the board of supervisors. That indictment alleged that the $102 million settlement was one tainted by conspiracy, extortion, fraud and bribery, based on the assumption that the settlement was not justifiable or reflective of the true level of damages sustained by the Colonies Partners as outlined in its lawsuit against the county.
At issue on Wednesday in the exchange between the lawyers and Judge Smith, was testimony Norton had provided to an exploratory grand jury in 2009, when he offered statements to indicate that his analysis of the issues contained in the suit and the totality of factors relating to the circumstance had led him to the conclusion that the $102 million settlement was “objectively reasonable.” But when Norton was called upon to testify before another grand jury in 2011, the one that indicted Colonies Partners Co-managing Principal Jeff Burum, former supervisor Paul Biane, one-time county sheriff’s deputies union president Jim Erwin and Mark Kirk, who had been the chief of staff to former supervisor Gary Ovitt, prosecutors had phrased their questions and in their own terms “cabined” Norton’s responses in such a way that the grand jury did not hear from Norton that he had subsequently concluded that the $102 million payout could be justified.
Erwin’s attorney, Raj Maline, while cross examining Norton after 10 a.m. Wednesday morning, initiated what he intended to be a series of questions with regard to Norton’s 2011 grand jury testimony. Immediately after Maline broached the subject, however, he encountered objections from Mandel, three of four of which Smith sustained. Maline gamely pressed on, or sought to, at which point Mandel asked for a sidebar, i.e., a hushed conference among attorneys and the judge outside the earshot of the jury. Instead, Smith at that point excused the jury from the room, and the discussion, which lasted from 10:32 a.m. until 10:54 a.m., was held openly and on the record.
Said Mandel, “The Court’s ruling … is that Mr. Norton’s prior inconsistent statements will be admitted, even though the general subject of reasonableness, or unreasonableness, after the settlement, which couldn’t have factored into the supervisors’ decision to settle, is generally irrelevant. That has been exhaustively explored. Mr. Norton has repeatedly testified about not only his inconsistent statements or his statements that the settlement was objectively reasonable, but [defense] counsel has gone far further and gotten Mr. Norton to testify that his current opinion is that the settlement is objectively reasonable … which we all know is based on additional litigation that he participated in and not what the supervisors knew at the time they were settling the case. None of that is true impeachment. Those aren’t truly inconsistent with his advice at the time, which was based on the information that he had at the time.
“Mr. Maline’s questioning is entirely improper,” Mandel continued. “First, along the lines of suggesting that Mr. Norton withheld information from the grand jury, it has always been the People’s position, and it’s been litigated thoroughly, that anything not known to the supervisors at the time was not relevant, and that, in fact, they had Mr. Norton’s post-settlement opinion in the Johnson materials.”
The Johnson materials Mandel referenced is information put up by prosecutors to overcome a so-called Johnson Motion, arising out of the precedent-setting case of People v. Johnson, which requires that in a case presented to a grand jury, prosecutors, as the only parties presenting evidence, must present to the grand jury any exonerating information of which they are aware . Before the Colonies case went to trial, the prosecution withstood a Johnson motion made by Burum’s attorney, Stephen Larson, to have the indictment thrown out.
“That’s not an issue for this jury,” Mandel said. “And the misleading implication should not be permitted. So, I think, this line of questioning is creating a very misleading and false inference for the jury to draw, and I think it should stop at this point. Mr. Norton has been extensively impeached with his prior statements, even allowed to testify about his current opinion.”
Maline, however, asserted, “This has nothing to do with Mr. Norton withholding information from the grand jury. It’s prosecutors withholding information from the grand jury. It was found out that the prosecutor possessed the information that the settlement was reasonable, and they believed that in 2009, and deliberately cut Mr. Norton off – or I forget the phrase they used – cabined his testimony to not include the fact that they had changed course. They knew that at that time in 2011. So it doesn’t go to impeach Mr. Norton on that issue. It’s the prosecutors withholding that information from the grand jury that I think is relevant. That’s where I’m going there.”
Smith responded, “That’s not relevant to this jury.”
Maline shot back, “I think it is, because the jury is wondering, ‘How did they get indicted?’”
Smith said, “The motivations of the prosecutors at the grand jury as to why they did ask or did not ask certain questions, why they did or did not elicit certain evidence, is not relevant to this jury. Even to the extent that if the prosecutors did anything that was improper before the grand jury, that also is not relevant to this jury. If they did anything that was improper that rose to the level of requiring a dismissal based on the Johnson line of cases, which we litigated extensively, that was an issue for the Court to decide, and I did decide, and decided that it did not rise to that level. So those issues of what the prosecution did or didn’t do before the grand jury, Number 1, is not relevant to these proceedings for this jury. Number 2, under Evidence Code 352, if I allowed you to go into that, then the prosecution would be entitled to put on evidence as to why they did what they did. And we could have a whole trial on the prosecution’s tactics before the grand jury, none of which has any remote relevance to the charges in this case.”
Maline did not give up the ghost at that point, saying “I believe that a question that lingers with not only this jury, but with any jury, is ‘Why?’ If our position is that, and Mr. Norton has testified that, he believed the settlement was reasonable and they [the prosecution] have gone to great lengths to testify how bad it was in terms of the advice given to the board of supervisors, why are they [the defendants] sitting here then? I think it’s fair to answer that question for them. They [the defendants] are sitting there because they [the prosecution] withheld evidence from the grand jury, mainly, that in hindsight, as Mr. Norton indicated, the settlement was reasonable.”
Smith said, “I disagree. That’s no different than any other criminal case where there may be some evidence that was used as a basis for a prosecution at one point, maybe even at the preliminary hearing. At the time it gets to trial, that evidence is either in question or has been refuted, but there’s still other evidence. I certainly agree that when Mr. Norton gave advice to the board that, in his opinion, and county counsel’s opinion, the settlement was unreasonable or excessive, that his subsequent statements to the grand jury, even if it were in hindsight with the additional knowledge gained in the interim time period, that his opinion was now that the settlement was reasonable and not excessive, that is proper impeachment, and I allowed the defense to impeach Mr. Norton with that, to bring out the fact that he did give that subsequent contrary opinion to the grand jury, and that still is his opinion today. So I think he’s been impeached.”
Maline again told Smith that the issue went beyond simply showing that Norton adopted a position contrary to his earlier stance.
“Your Honor, this case is different,” Maline said. “Generally, the district attorney’s office is not participating in the investigation. And we are allowed to criticize the investigation. We are allowed to say that investigators withheld information or whatever. The Court would not stop us from doing that. Well, Mr. Cope [deputy district attorney Lewis Cope] sat as an investigator. He was part of the investigation. He was conducting the questioning in the investigative grand jury. This was a long process. And he got information from his investigation in that grand jury process. And then when he went to the indicting grand jury, that information was withheld from them. I think that’s relevant. I don’t see why we should hide that fact from our jury. We are allowed to criticize the investigation. This is part of the investigation, your Honor.”
Smith said he would not allow the defense to explore with Norton whether prosecutors prevented him from expounding on his position with regard to the reasonableness of the settlement before the grand jury.
“Number one, it’s not relevant.” said Smith. “Number two, it goes into collateral matters that would tend to confuse the jury, rather than help the jury, with regard to the issues before this jury to decide, and it would be an undue consumption of time. So for all of those reasons, both on relevancy grounds and Evidence Code 352, the objections are sustained.”
There ensued a discussion about the proposed testimony of Thomas Winfield, who was the first outside attorney hired by the county to assist it in the litigation against the Colonies Partners. Winfield was waiting in the hallway outside the courtroom as the discussion before Judge Smith was ongoing, waiting to be sworn in and questioned upon Norton being excused from the witness stand.
Mandel and the other member of the prosecution team, Lewis Cope, said Winfield’s testimony was needed to generally support the prosecution’s contention that the $102 settlement was not a fair, reasonable or equitable one. Moreover, Cope asserted, Winfield was knowledgeable about a deal the county had entered into with the Colonies Partners in which an arrangement was made to have the Colonies Partners construct a water holding basin on its property in return for the county surrendering the restrictions the county had over the property in the form of flood control easements it had recorded against the property in the 1930s. Cope said the Colonies Partners had failed to perform with regard to that agreement. Pointing out that the defense in the criminal case has sought to propound that the county was being unreasonable in its action in restricting the Colonies Partners from proceeding with the development, thereby leading to the lawsuit filed against the county, Cope said Winfield would be critical to illustrating that the Colonies Partners had failed to live up to the 1999 agreement and that the county’s actions were indeed justifiable.
Stephen Larson, the lead attorney for Jeff Burum, told Judge Smith, “Your Honor, I believe the next witness is Thomas Winfield. After we finish with Mr. Norton, the prosecution has indicated that they are going to be getting into the breach of contract case that he recommended based on the 1999 agreement. By the time this case had worked its way to a settlement, the time period that is relevant to the issues before this jury, November of 2006, the breach of contract case was not in play, at all. That was not what was before the board of supervisors. Mr. Winfield… wasn’t the attorney when these agreements were entered into and was not the attorney when Judge Warner made his decision and the settlement. I think this is really a red herring. They are going to have to get into this. I am going to have to impeach it. It’s going to be a lengthy exercise. It really has no moment in connection to the vote in 2006. I would object on that basis.”
Mandel, responded saying that “Mr. Larson just discussed this area with Mr. Norton and raised the issue himself, so it is an issue.”
Judge Smith asked, “Tell me what the evidence with regard to the 1999 contract or agreement [is]. What’s your offer of proof as to what that evidence is?”
Cope responded, “That there was an agreement between the parties that the county would give up some of its [flood control] easements so that Colonies could do some work on the basin. There was an agreement for each side to give up some things. The reason why Colonies was doing work was pursuant to this agreement. That agreement, basically, broke down, eventually. It’s been asserted here, several times, through questioning and opening statement, that [the] Colonies [Partners] is being taken advantage of, that they are doing all sorts of work and the county won’t do certain things. The problem with that is all of this began based upon an agreement to do certain things.”
Smith inquired, “How is it relevant to the charges?”
Cope responded, “Well, that’s part of the problem, because the defense, themselves, have made it an issue by removing that context. They’re claiming that [the] Colonies Partners has been left alone to do all sorts of work that they are doing, and the county is bad because they are not performing, they are not willing to pay for the improvements that are being done. Making that argument without explaining the 1999 agreement doesn’t allow us to address that accusation.”
Larson asserted, “Then that leads to the Judge Warner decision and his consideration of the 1999 agreement and that gets us into the weeds of that litigation. Your Honor, this is not relevant. Mr. Winfield… wasn’t there for the treatment of this trial before Judge Warner. And this is nowhere before the board of supervisors in November 2006. He’s
talking about stuff that took place in 1999 that he was involved with in 2003.”
Judge Christopher Warner presided over the 2006 trial of the civil case between the Colonies Partners and the county.
Judge Smith asked if Winfield was representing the county when the 1999 agreement was entered into. Mandel said he was not, but that he had extensive knowledge about the agreement because he was the attorney who was preparing a breach of contract lawsuit over the Colonies Partners’ failure to live up to its terms.
Smith asked, “What does he do with regard to the 1999 agreement?”
Cope said, “He makes the recommendation to the board, based on the lay of the land at that time, when [the] Colonies Partners was threatening a lawsuit, [that] the county should file its lawsuit for breach of contract and gives reasons why to the board.”
Smith said, “And Mr. Winfield was subsequently, basically, fired by the board because they weren’t satisfied with his performance.”
Cope said, “He was fired by the board. Some of the board was not satisfied with his performance. There’s also some evidence that the Colonies [Partners] didn’t want Mr. Winfield there. We won’t get into that with this particular witness, but there are witnesses who will comment on that later.”
Smith asked, “So if Mr. Winfield didn’t come on until four years after this agreement, if other people are going to be testifying about that agreement and its effect on the current state of affairs at various points, why do we need Mr. Winfield?”
Cope said, “Mr. Winfield is the one who made the recommendation to the board to file the lawsuit …because of his perception or the county’s perception of the things that [the] Colonies [Partners] was doing related to the agreement in not performing.”
Smith asked, “How is that relevant to whether or not there was bribery in 2006?”
Cope said, “From defenses’ opening statements and their attack on the county and the heavy-handed manner in which the county treated Mr. Burum, there’s a different side to that story. In their examination of the witnesses, they’ve continued to bring that theme out, and it’s just simply not true. Because of the 1999 agreement, both sides had agreed to do certain things, and that’s an agreement that fell apart.”
“That’s a written agreement, right?” Smith asked.
“Yes,” said Cope.
“So you can submit the agreement and show what the agreement was,” Smith said.
“We can do that and we can authenticate it through Mr. Winfield,” said Cope.
Larson said the defense would stipulate to the existence of the agreement but did not want testimony from Winfield on “its context and relevance.”
Judge Smith said Winfield would not testify at this point. “After the other witnesses have testified, perhaps, after defense puts on evidence, if you still think it’s relevant or it’s become relevant for rebuttal, I would certainly let you be heard on that. But at this point, I would sustain the objection on both relevancy and Evidence Code 352.”
In this way, Winfield did not testify.
The inability to have Winfield heard by the jury was an especial setback to the prosecution in that earlier in the week, Larson had continued to make inroads in weakening the initial impact of deputy county counsel Mitch Norton’s testimony before the two juries hearing the case. Under direct examination by Mandel, Norton had provided background on the dispute the county had with the Colonies Partners over the Colonies developments, and the clash between the county flood control district and the Colonies Partners. The flood control district, at the behest of the California Department of Transportation and the City of Upland, which had given go-ahead to the Colonies development, had constructed the 20th Street Storm Drain to carry away flood waters in the watershed of Upland north of the 210 Freeway as well as from the freeway itself. Relying on its easements, it put the terminus of the 20th Street Storm Drain at the mouth of the basin on the Colonies Partners’ property. This, the Colonies Partners’ contended, clashed with its aggressive development plan for the property. That dispute led to the lawsuit.
Norton’s narrative matched in many aspects the elements contained in the May 2011 indictment which maintains that Burum, increasingly impatient with the lack of progress on the project and the ineffectiveness of the litigation in bringing about that end, conspired with Erwin to blackmail then-board of supervisors chairman Bill Postmus and Paul Biane, who was then-vice chairman of the board of supervisors, by threatening to send by U.S. Post to voters all across the county “hit piece” mailers which took as their subject matter highly personal derogatory information about the two supervisors intended to damage their political viability and careers. Those mailers were never sent. After Postmus and Biane voted in conjunction with then-supervisor Gary Ovitt in November 2006 to approve the $102 million settlement, the indictment alleges, Burum laundered separate $100,000 bribes to Postmus, Biane, Kirk and Erwin, by disguising those kickbacks in the form of contributions to political action committees they controlled. Kirk, who was Ovitt’s chief of staff, the indictment alleges, was paid for delivering Ovitt’s vote in favor of the settlement. At the time his political action committee received the money from Burum in March of 2007, Erwin had been hired as assistant county assessor by Postmus, who had successfully vied to become county assessor in 2006. Postmus, who was charged criminally with regard to a host of criminal acts in February 2010 pertaining to the same conspiracy, extortion, bribery, conflict of interest, fraud and political graft charges contained in the May 2011 indictment, initially pleaded not guilty to those charges but in February 2011 pleaded guilty to 14 felony charges and turned state’s evidence, serving in April 2011 as the star witness before the grand jury that indicted Burum, Biane, Erwin and Kirk in May 2011. It is anticipated that Postmus will be testifying in the trial either later this month or in early May.
On Monday, Larson continued with further cross examination of Norton that he had begun last week. One area Larson focused upon was the trial held before Judge Christopher Warner over an intermittent period of 18 days in April, May and June of 2006, after which he entered, on July 31, 2006, a statement of intended decision, which was unfavorable to the county.
When the county opened the storm drain’s gates, Warner found, the county had overburdened the easements, resulting in damage to the Colonies Partner’s property, a risk to public safety, compelling him to conclude the easements had been extinguished. Warner said the county had irresponsibly sought “to walk away from the consequences of” what it had done. He found the testimony and representations of certain county officials, most notably flood control district director Ken Miller, to lack credibility, and he opined that the county had defrauded the Colonies Partners in entering into the 1999 agreement to have the Colonies Partners construct the storm water basin.
Larson asked Norton if the county’s legal team had conveyed to the members of the board of supervisors how soundly the county had been defeated in the Warner trial. Norton said the board had been so informed. Larson asked Norton if the county’s “legal team disagreed with Judge Warner?”
“I have testified to that effect, yes,” Norton said. Norton said he believed appealing Warner’s decision to the appellate court would likely have proven to be an “uphill battle,” but that the county’s lawyers, consisting of its in-house attorneys, known as the office of county counsel, and lawyers with outside law firms retained by the county were nonetheless advising the board of supervisors to take the matter to the appellate court.
One of the issues the county’s legal team was concerned with, Norton testified, was a report of improper contact between the Colonies Partners and at least one of the judges hearing the case. A complaint along those lines had gone to the California Commission on Judicial Performance. Norton said it was the county legal team’s advice to the board of supervisors that no settlement should be entered into before the outcome of the investigation into those charges was complete and the commission had made its determination. Larson sought to have Norton admit that there was no substance to the allegation. Norton did not. Rather, he said, a credible report to that effect had been received from one-time Hesperia Mayor Jim Lindley, who was also a county employee.
“Did any of you [county lawyers] have an evidentiary basis to make the allegation?” Larson asked. “Who saw it?”
“I have a general understanding,” Norton said. “James Lindley told another member of county counsel that Mr. Burum had been bragging about playing golf with one of the judges.”
Larson tried to shed discredit on a legal theory Norton and other county lawyers were touting in resisting making a settlement with the Colonies Partners and appealing Warner’s ruling, the so-called Ellena defense. The precedent-setting 1977 case of Ellena vs. the State of California involved a situation not too unlike the situation with regard to the Colonies Partners property involving severance damage compensation for property near Lytle Creek that was devastated during prolonged rainstorms in 1969. Using the Ellena case, the county was set to maintain that the $18 million paid to the Colonies Partners as the consequence of an inverse condemnation lawsuit filed against the California Department of Transportation for the state utilizing 40 acres at the top of Colonies Partners property included severance damage compensation for any impacts from the construction of the freeway. Since the 20th Street Storm drain was put in place to alleviate freeway flooding, according to the Ellena defense theory, the Colonies Partners was not eligible to recover any further damages from the county for its construction of the 20th Street Storm Drain. Larson referenced internal communications among the county’s lawyers in which the strength and weakness of the Ellena defense was discussed, in particular one memo from a county lawyer, Paul Watford, in which he questioned the Ellena precedent’s applicability to the Colonies Partners property. Lawyers with another firm working for the county, Jones Day, were far more confident the Ellena defense would work. To Larson’s pointed question regarding Watford’s expression of doubt, Norton said, “I’m still confident the Ellena argument is very strong, notwithstanding Paul’s concerns. I agreed more with Jones Day than I did with Paul Watford. While the Ellena defense is strong, it is not an ironclad theory, I always thought.”
Larson continued to work Norton over, returning to the subject of the viability of the appeal, getting him to acknowledge that appeals in general are statistically unsuccessful and that the county had “slim chance” of overturning Warner’s decision. And Larson returned again and again to the coup he had scored last week when he got Norton to acknowledge that in the aftermath of the $102 million settlement he had come to the conclusion that it could be seen as “objectively reasonable.”
On redirect examination of Norton, Mandel asked a set of questions to demonstrate that in the years since the settlement was made, Norton has been handling the county’s efforts to recover from its insurance carriers a significant portion of the money paid out in the $102 million settlement, putting him the position of having to now maintain the settlement was reasonable to carry out that assignment. Indeed, in response to Mandel, Norton indicated his assertion of the settlement’s reasonableness came about because of his role in pursuing the indemnity recovery.
By the end of his time on the witness stand, Norton, who had maintained his equanimity throughout the ordeal which had lasted for five-and-a-half days, was mentally exhausted. He had hewed, for the most part, to a narrative consistent with the prosecution’s version of events, but was continuously subjected to the whipsaw effect of Larson refocusing on the statements he had made before the grand jury and in other venues that were consistent with his role in pursuing the county’s indemnity claim. The toll upon Norton became evident toward the end of his testimony, when Mandel sought to display for the jury one last time that Norton had been an advocate of the county staying the course by continuing to fight the Colonies Partners in court by appealing Warner’s decision and refusing to settle the lawsuit.
“It was your opinion that [dissenting from Warner’s decision] had a substantial chance on appeal?” Mandel asked.
“I am not so sure about that, actually,” Norton responded.
On Wednesday afternoon and Thursday morning, the prosecution sought, and to a degree did, regain its footing with the testimony of former county counsel Ronald Reitz.
Reitz, who began as deputy counsel in 1978, promoted to supervising county counsel after that and then headed the office’s litigation unit as assistant county counsel before becoming county counsel – the county’s top in-house lawyer – in September 2003, testified that he regularly attended the closed door sessions of the board of supervisors during his tenure as county counsel. During that tenure, he said, the Colonies litigation was a major topic of discussion. He said that in addition to the closed sessions of the board, he also met with Postmus, then the chairman of the board of supervisors, and Biane, the vice chairman, at weekly “chair meetings,” that is, sessions during which ongoing issues facing the city were discussed. He said the Colonies litigation was a frequent topic in these sessions.
Reitz said he had not been involved directly with the Colonies litigation before he became county counsel, but that upon taking the county’s top legal position, he was brought up to speed very quickly with regard to it. He said he also learned in relatively short order that Biane was in contact with the Colonies Partners. “It came up a lot,” Reitz said. “It was frequent, no question about it.”
Cope asked Reitz if he had gleaned from his constant interaction with Postmus and Biane that they were in frequent contact with Burum. Reitz said he had, and he indicated the two leaders of the board had to some degree fallen under the Colonies Partners’ sway. On one occasion, Reitz said, Biane told him that Burum had informed him that the attorneys representing the Colonies Partners were top-of-the-line litigators who had won 40 straight cases they had taken to trial.
“I had Mitch [Norton] check that out,” Reitz said. “It wasn’t accurate at all.”
Reitz said Biane’s contact among the Colonies Partners appeared to be Burum rather than Dan Richards, the other co-managing principal with the company.
Early on, Reitz said, he recognized that Postmus, too, had contact with Burum.
“After he would come back, he would make a comment about something Jeff Burum was saying,” Reitz said.
Reitz said he could recall only a single conversation with Kirk regarding the Colonies issue, and that Kirk had said “You can’t handle the Colonies case like a regular case. It’s a political issue.”
Cope asked Reitz how he responded. He said, “We wouldn’t get involved in political issues. We only handle legal issues.”
Reitz said he had a few other conversations with Ovitt regarding the Colonies case but that Kirk was not present.
Cope asked about a meeting that took place on March 25, 2005 at Biane’s office in Rancho Cucamonga that initially involved Postmus, Biane, Burum, Richards, former state senator Jim Brulte, Norton, two lawyers with the law firm Munger Tolles & Olson who worked for the county, Paul Watford and Steven Kristovich, as well as two lawyers working for the Colonies Partners, Scott Sommer and Heidi Timken. After the lawyers for both sides held forth about a then-recently delivered tentative appellate court decision that reversed Judge Peter Norell’s 2003 ruling that the county’s flood control easements on the Colonies property had been abandoned, Postmus had directed the attorneys for both sides to leave the conference room while Brulte, who had been retained by the Colonies Partners, refereed a negotiating session in which Postmus and Biane accepted a settlement proposal to close out the litigation in return for $22 million in cash and handing over some surplus county flood control property in north Rancho Cucamonga valued at $55.5 million.
Both Watford and Kristovich were adamantly opposed to the terms of the settlement and wrote a memo in which they cataloged their objections and recommended against the full board’s ratification of what Postmus and Biane had accepted.
Cope asked, “Before the Munger Tolles memo was written, did Mr. Biane and Mr. Postmus approach you about the intention of Munger Tolles in reporting on that meeting?”
“They approached me to tell me to make sure they [Watford and Kristovich] didn’t put anything in writing about that meeting,” Reitz said.
“Who approached you?” Cope asked.
“Supervisors Postmus and Biane,” said Reitz.
“Did they approach you at the same time?” Cope asked. Reitz said they had come together to his office. “They told me to make sure they [Watford and Kristovich] don’t put anything in regard to that meeting in writing,” said Reitz. “It was a real brief meeting. It wasn’t an unpleasant encounter. It was sort of a matter of fact request. It was not just ‘Don’t disseminate this memo.’ They didn’t want any memo at all.”
The memo Watford and Kristovich authored was presented to the full board at its next closed meeting. During the meeting, Kristovich and Watford told the board, Reitz said, that any liability at the most “would be split four ways,” meaning among Caltrans, the City of Upland, the region’s transportation agency and the county. “Our outside attorneys never thought we had more than 20 or 25 percent liability, if there was liability,” Reitz said.
“Did you ever see any documentation to justify this amount?” Cope asked in reference to the proposed $77.5 million settlement.
“No,” said Reitz.”
Cope asked about a change in Postmus in the aftermath of his return from a trip to China in 2005. Testimony earlier in the trial placed Burum in China during that trip.
“It seemed real clear to me and others that once he came back from China he did take the lead in pushing for the settlement,” Reitz said. “Before it had been Mr. Biane. After he [Postmus] came back, there didn’t seem to be any question he was the one pushing for the settlement.” Reitz said that Postmus’ determination to settle the case was apparent at both closed session meetings of the board and in the chair/vice chair meetings.
Reitz said there was around that time another negotiation session involving county officials and the Colonies Partners where Postmus excluded the county’s lawyers from the deliberations. On that occasion, Reitz said, retired California Supreme Court Justice Edward Panelli was serving as a go-between, with the Colonies Partners’ representatives in one room in the county government center and the county’s contingent, involving members of the board of supervisors and the county’s lawyers, sequestered in a separate room. At one point Postmus ordered the county’s lawyers to leave the room, Reitz said. When it was pointed out that under California’s open public meeting law, known as the Brown Act, the board could only meet in such a circumstance in the presence of lawyers to receive legal guidance and that having the lawyers leave would constitute a violation of the Brown Act, Reitz said Postmus “said he didn’t give a damn about the Brown Act.” Reitz said this echoed a statement Panelli had made in his introductory remarks for the negotiating session, something to the effect that “you can’t literally follow the Brown Act and get anything done.”
Cope inquired as to how it was that Panelli, whose use as a mediator was advocated by the Colonies Partners, was chosen to serve as the mediator. Reitz said that Norton had told him that “Postmus had selected Panelli, which was pretty unusual.”
Reitz said that in early 2006, Postmus was evincing extreme impatience with the county’s attorneys’ unwillingness to accept the terms of settlement being pushed by the Colonies Partners, to the point that he, with the backing of Biane and Ovitt, was on the brink of eliminating the office of county counsel and outsourcing the county’s legal service providers so a settlement could be hatched without legal resistance.
Reitz said that on February 14, 2006, Postmus had told him he needed to fire Norton.
On another occasion in that time frame, Reitz said, Postmus told him he needed to control the outside law firms working for the county.
The culmination of Postmus’ hostility toward the county’s attorneys came on April 24 or 25, 2006, Reitz said, at an administrative budget meeting that involved the board of supervisors, members of the county administrative office, all of the county’s various department heads and each department’s senior finance staff member, a confabulation, Reitz said, of somewhere between 75 and 100 people at which each of the department heads was called upon to present their work plans for the budget. Postmus was late in arriving at the meeting, Reitz said. Agitated and angry, Postmus remarked that Reitz wasn’t doing his job because he would not make a recommendation on settling the Colonies lawsuit, Reitz said. When the county counsel office vis-à-vis the budget came up, Reitz said, Postmus said he wanted Reitz “to carry out a study on preparing to contract out the functions of the county counsel’s office as part of the budget presentation that would come back in June.” Reitz said no vote was taken, as in these meetings direction was given by consensus. He said that when Biane and Ovitt assented to what Postmus had suggested, it took on the weight of an official directive that he was obliged to follow or otherwise be insubordinate.
“There was no way I was going to do that study,” Reitz said. “I resigned before the week was out.” Reitz indicated the directive was given to him on April 24 or 25 and he tendered his resignation and left the county on April 28, 2006.
There are two juries hearing the case. One of those juries is considering the criminal charges against Erwin. The other jury is hearing the matter in relation to Burum, Biane and Kirk. On Thursday afternoon, with the jury for Burum, Biane and Kirk absent from the courthouse, the jury for Erwin heard testimony from Alan Mohill, a civil attorney from Temecula, under direct examination by Cope. Mohill had represented Erwin in his responses to lawsuits filed against him by the County of San Bernardino and the San Bernardino County Professional Attorneys Association. Cope had him review invoices he had sent to Erwin for that work and email communication he had with Erwin relating to the billings and the cases. Mohill attempted to raise attorney client privilege in avoiding the questions but was met by a finding from Judge Smith that the privilege had been waived, and he was ordered to answer Cope’s questions.
Some of the invoices went to Erwin’s political action committee, Committee For Effective Government, in some cases to an address at a post office box in Highland and in other cases to the Santa Margarita address for Betty Presley, the treasurer for the political action committee. Other invoices were sent to two political action committees controlled by political consultant David Ellis, the Neighborhood Preservation Coalition and the Committee Against Corruption at the same address in Tustin.
While Erwin generally faces the same charges as the other defendants, there are a set of charges lodged against him distinct from the others pertaining to his failure to report income and gifts on the statements of economic interest disclosure forms he was required to fill out in his role as assistant assessor in 2007. Those charges were filed against him as felonies. He now has a motion pending before Smith, due to be heard next Tuesday April 18, to have those counts thrown out entirely, based upon his attorney Raj Maline’s contention that they were improperly charged.
A state appellate court decision published in January holds that such charges as Erwin faces, failing to report accurately information on a Form 700 statement of economic interest, are properly charged as misdemeanors, not felonies. According to the motion, the five counts should have originally been charged as misdemeanors, but because they were not, the four-year statutes of limitations attached to those charges have lapsed, and refilling them would not be allowed if the motion is granted.
Erwin is charged with 12 felonies. If Judge Smith grants Maline’s request, five of the charges would be dismissed. They include three counts of perjury and two counts of filing false or forged documents.
By Mark Gutglueck