The defenses the county is constructing in response to the federal civil rights, conspiracy, retaliation, malicious prosecution and breach-of-contract lawsuits the Colonies Partners and Jeff Burum lodged last month and this month are both factually and legally insufficient, the lead attorney for the plaintiffs told the Sentinel this week.
Burum, who is one of the managing principals of the Colonies Partners develop consortium, went to trial in January 2017 on a host of criminal charges pertaining to the corruption of government. He was tried along with former San Bernardino County Supervisor Paul Biane, Mark Kirk, who was the chief of staff to former supervisor Gary Ovitt, and Jim Erwin, the one-time president of the union representing the county’s sheriff’s deputies who also served a short stint as assistant county assessor.
That trial was an outgrowth of the personal and political implosion of Bill Postmus, who was more than a decade ago the chairman of the board of supervisors and simultaneously serving as the chairman of the San Bernardino County Republican Central Committee. From those dual perches, Postmus, who had meteorically vaulted to the pinnacle of governmental power and influence in San Bernardino County in 2000 by representing himself as a rock-ribbed conservative Christian-and-family-values Republican, in 2006 successfully vied for county assessor, the primary taxing authority in the county. By 2009 he had crashed to earth in a cascade of scandals in which he was exposed as a drug-addicted homosexual who had installed more than a dozen of his boyfriends/”political associates” into high-paying nonproductive positions in the assessor’s office. As a consequence, Postmus was induced to resign, and he and some of his employees were charged with and prosecuted for misusing the assessor’s office for partisan political purposes. Ultimately, Postmus and his associates and boyfriends would be convicted or pleaded guilty to those charges.
In March 2011, Postmus entered into a plea arrangement in which he acknowledged guilt to one misdemeanor drug count and 14 felony charges relating to political corruption, including conspiracy, bribery, misappropriation of public funds, conflict of interest, fraud and perjury. He turned state’s evidence and the following month served as the star witness before a grand jury that in May 2011 returned a 29-count indictment of Burum, Biane, Kirk and Erwin.
That indictment revolved around the circumstances of a $102 million settlement of the lawsuit the Colonies Partners brought in 2002 against the county and its flood control district over storm water drainage issues at the Colonies at San Antonio residential and Crossroads Colonies commercial subdivisions in Upland. In the indictment, prosecutors cataloged their allegations that prior to the November 2006 vote to approve the settlement Erwin and Burum had bullied Postmus and Biane with threats to expose their personal vulnerabilities, including Postmus’s drug use and homosexuality and Biane’s financial difficulties. Prosecutors alleged that Burum and Erwin thus successfully blackmailed Postmus and Biane into supporting the settlement and then provided them both $100,000 each in kickbacks after the settlement was ratified and that those bribes had been hidden, or laundered, in the form of political donations. Similarly, the indictment described $100,000 provided to Kirk’s political action committee as a kickback to reward him for helping convince Ovitt to support the $102 million settlement. Erwin was also rewarded with a $100,000 donation to a political action committee he had set up, and prosecutors said that was a reward to him for having assisted the Colonies Partners and Burum in effectuating the settlement.
The eight month-duration criminal trial before two juries last year included testimony by Postmus in May. During his first three days of testimony under direct examination from May 1 through May 3, Postmus replicated the key elements of the prosecution’s narrative. In the latter half of 2006, Erwin, working on behalf of Burum and the Colonies Partners, Postmus testified, had threatened to expose elements of both his and Biane’s personal lives in an effort to persuade them to support the settlement. And Burum had promised to support him in either or both future political and business endeavors once the settlement was finalized, he said. Moreover, Postmus said, he believed the $102 million paid out to the Colonies Partners was ridiculously more than the development company was due. The threats and promises of reward, he testified, along with the desire to put the whole thing behind him prompted the settlement. And after the settlement was in place, Postmus testified, the Colonies Partners had come through with $100,000 for him in the form of two separate $50,000 donations to political action committees he had control over.
Thereafter, when the defense was given an opportunity to cross examine Postmus, under the withering questioning of one of Burum’s attorneys, Jennifer Keller, Postmus began to go sideways, and he testified that he had been intimidated by the district attorney’s office investigators to meet their expectations of what they needed to make the case against the others. Keller elicited from Postmus his acknowledgment that he was in the throes of methamphetamine addiction at the time of the events in question, rendering his memory unreliable and leaving him vulnerable to manipulation by the prosecution.
The trial closed out without the defense calling any witnesses and without testimony from the accused, all of whom stood on their Fifth Amendment rights. The jury which heard the case against Burum, Biane and Kirk returned verdicts of not guilty against all three on all remaining charges against them after less than two full days of deliberation. The other jury deadlocked on all of the charges brought against Jim Erwin. Thereafter, on a motion by the prosecution, the charges against Erwin were dismissed.
On March 1, 2018 the Colonies Partners filed a civil rights lawsuit in Riverside Federal Court against San Bernardino County District Attorney Mike Ramos and former state attorneys general Jerry Brown and Kamala Harris, other members of the prosecution team and witnesses involved in last year’s unsuccessful political corruption trial. That suit, which seeks $80 million in damages, alleges both prosecutors and investigators in the criminal case disregarded or hid evidence vindicating the defendants and furthermore “fabricated evidence to prop up their case.”
On April 2, Burum followed up with a $50 million malicious prosecution lawsuit in federal court against San Bernardino County, district attorney Mike Ramos and former state attorneys general Kamala Harris and Jerry Brown, prosecutors Lewis Cope and Melissa Mandel, former assistant district attorney Jim Hackleman, district attorney’s office investigators Robert Schreiber and Hollis Randles, and county supervisor Josie Gonzales, asserting overzealousness and retaliatory motives on the part of prosecutors, who, he claimed, used fabricated evidence in accusing him of involvement in an extortion and bribery conspiracy relating to the $102 million settlement.
At issue in both the suits brought by the Colonies Partners and Burum is that in entering into the settlement agreement in late 2006 and the working out of those arrangements in the months thereafter, the county agreed to indemnify the Colonies Partners over any legal challenges relating to the settlement that might arise and that the county also carried out a validation proceeding through the courts in which the public at large was invited to challenge the settlement, after which, the Colonies Partners claim, the settlement was locked in and could not be overturned for any reason. Part of the damages the company and Burum are seeking, aside from the assertion that no criminal prosecution should have taken place at all, are based upon their claims that the county should have paid for Burum’s legal defense in keeping with the indemnification agreement.
Charles E. Slyngstad, the lead attorney representing the county, in court papers filed with the U.S. Federal Court in Riverside on March 26 and in subsequent statements, has said neither the Colonies Partners nor Burum have a basis for the legal action they have brought.
In particular, Slyngstad maintains that the Colonies Partners should not be entitled to recover damages from the county or the defendants in the federal suit in general based on the assertion that Burum, Biane, Kirk and Erwin conducted themselves in such a way that their prosecution was justified under the several laws referenced during the prosecution. A central tenet in the county’s initial answer to the lawsuits is that Postmus in his guilty plea established that there was a violation of Government Code Section 1090, relating to a conflict of interest on the part of a government official, which renders any action by the government or agreement or contract entered into that is tainted by that conflict of interest null and void. This, Slyngstad maintains, excuses the county, the district attorney’s office, the California Attorney General’s Office and their employees from any allegations of malicious prosecution or torts growing out of any legal action against the Colonies Partners or the defendants in the criminal prosecution. Similarly, Slyngstad holds, the bribe talking Postmus admitted to engaging in rendered the indemnification agreement null and void. Nor does the indemnification agreement stand up to the consideration that the bribe originated with Burum and the Colonies Partners, and the ensuing conflict of interest that entailed, according to Syngstad.
“The defendants allege that plaintiff cannot establish that it has been deprived of a constitutional or statutory right,” Slyngstad wrote. Despite the exonerations at trial, Slyngstad maintains the prosecution was justified in pursuing a criminal case against Burum, Biane, Kirk and Erwin. “The fact that Mr. Burum and others were found not guilty is not a vindication of their conduct and does not make the county and the [flood control] district responsible for the cost of a criminal defense or other costs allegedly paid for by Colonies Partners,” Slyngstad said. Slyngstad denied the lawsuits’ contention that district attorney’s office investigators Robert Schreiber and Hollis Randles engaged in deceptions aimed at planting in the drug-addled Postmus’ mind false memories for the purpose of manipulating him into giving perjured testimony against Burum, Biane, Kirk and Erwin.
Slyngstad dismissed the suggestion in the lawsuit that the county engaged in breach of contract by not funding Burum’s legal defense in the face of the criminal charges lodged against him. Any governmental contract tainted by a conflict of interest is not enforceable under California Government Code Section 1090, according to Slyngstad, and Postmus’ guilty plea to a violation of Government Code Section 1090 as pertained to his approval of the $102 million lawsuit settlement excused the county from having to abide by its indemnity guarantee. “Plaintiff is not entitled to indemnity and/or defense for any matters that relate to plaintiff’s and/or its agents’, confederates’, or alleged indemnitees’ actions in violation of Government Code Section 1090 and other provisions of California law pertaining to conflicts of interest,” Slyngstad wrote in his answer to the lawsuit filed by the Colonies Partners in March. “Defendants allege that they have fully performed all terms, conditions and obligations that were theirs to perform under the agreement that is the subject of those claims. [W]ithout admitting that defendants engaged in any of the acts or conduct attributed to them in the complaint, any breach of the agreement sued upon was excused by plaintiff’s prior breach.”
Slyngstad said, “The county and the district deny they are liable to Colonies in any amount whatsoever. Defendants affirmatively allege that plaintiff’s allegation that ‘the prosecution’s case was marred by repeated use of fabricated evidence and perjured testimony’ is made without a good faith belief that it is true. Mr. Burum is treating this case like a bargaining chip in a business deal. The defendants in this case were unjustly sued.” Slyngstad said county officials “are looking forward to an opportunity to show in this civil case that [the]  Colonies [Partners] and Mr. Burum acted inappropriately and continue to act inappropriately in influencing politics for their own financial gain.”
Stephen G. Larson, the lead counsel for the Colonies Partners and Burum in the civil suit who was also Burum’s primary defense attorney during the criminal trial, told the Sentinel that Slyngstad is being wishful in his pronouncements and that the defense theory he is pursuing on behalf of the county is wrong factually and in terms of applicable law.
“As we demonstrated during the criminal trial, there was absolutely no justification for any of the charges brought against Mr. Burum—a fact confirmed by the jury’s quick not guilty verdict and the outrage they expressed about the prosecution’s conduct,” Larson said.
Larson said the county’s citation of the Government Code 1090 conviction prosecutor’s obtained against Postmus in seeking to excuse itself from abiding by the indemnification agreement falls short. “The prosecution spent nearly six months trying to prove their case, including charges of violating Section 1090 against Paul Biane and Mark Kirk,” said Larson. “The jury took only a few hours of deliberation to reject their case and find Mr. Biane and Mr. Kirk not guilty of those charges. As we established during the trial, and as Mr. Postmus admitted on cross examination, his guilty plea was the result of his heavy drug abuse, his financial struggles, and the manipulation of his memory by the prosecution team. It was not an informed and knowing plea, and thus absolutely did not give the prosecution license to pursue this meritless case.”
In a letter dated April 16, 2018 obtained by the Sentinel, Larson wrote to Slyngstad and his law partners Susan Coleman, Brian Ginter and Lauren Krapf, asserting the county’s position “which seeks to invalidate the indemnity provisions of the 2006 settlement agreement is not only baseless, but will subject the county to further liability for indemnity. The Colonies Partners was forced to sue the county because the county has tried to avoid its obligations under the settlement agreement, either directly or through the disastrous prosecution of Mr. Jeff Burum and others. At the same time, the county has hypocritically argued in favor the settlement agreement’s validity before multiple courts. The county’s misguided ‘defense’ is the same rabbit hole the county has been diving into for over a decade, which will have the same result: To increase the county’s liability and to further waste taxpayer dollars.”
Larson referenced a lawsuit brought more than six years ago by a citizens group which sought to overturn the $102 million settlement based upon the allegations of graft contained in the indictment. “In that 2011 attack, a group of taxpayers challenged the settlement agreement arguing, among other things, that former San Bernardino County Supervisor Bill Postmus’s guilty plea to a Government Code Section 1090 violation made the agreement unenforceable,” wrote Larson. “The Court of Appeal utterly rejected this challenge in 2015. It held, ‘[t]he judgment, if no appeal is taken, … shall … be forever binding and conclusive, as to all matters therein adjudicated or which at that time could have been adjudicated, against the agency and against all other persons, and the judgment shall permanently enjoin the institution by any person of any action or proceeding raising any issue as to which the judgment is binding and conclusive.’ The Court of Appeal further held that Mr. Postmus’s 2011 guilty plea had no effect on the validation judgment or the enforceability of the settlement agreement. It stated that the validation judgment could not ‘be collaterally challenged on the basis of later discovered facts’ as that ‘runs squarely afoul of the principle that a validation judgment, once any appeals are exhausted, is ‘forever binding and conclusive.’ Thus the court held that any ‘claim that plaintiffs seek to assert is barred by the effect of the 2007 validation judgment.'”
Larson continued, “Here, the county seeks to avoid the settlement agreement’s indemnity clause because ‘Jeffrey Burum and Jim Erwin were charged and prosecuted for allegedly aiding and abetting former supervisors Postmus and Biane in bribery.’ Indeed, the county’s current attack is far weaker than that made in the taxpayers’ suit because the Section 1090 charges were dismissed against Mr. Burum and Mr. Erwin in 2015 as legally unsupportable. Put simply, the fact that Mr. Burum and Mr. Erwin were ‘charged and prosecuted’ for nonexistent crimes cannot form the basis of a challenge to the settlement agreement. As the gravamen of this challenge is identical to the taxpayer group’s challenge, the county’s attack fails for the reasons already articulated by the Court of Appeal.”
-Mark Gutglueck