Death Claims Tim Sabo, Attorney Who Enabled Government Financing Schemes

(November 30)   Timothy John Sabo, the controversial attorney who spent much of his career working as  counsel to municipalities and local governmental agencies in and around San Bernardino County, has died.
Sabo was valued as a “facilitator” who rendered legal opinions other attorneys were often unwilling to provide to enable government to undertake projects or make funding arrangements that allowed cities and joint public agencies to proceed with policies that were controversial and subject to legal opposition or challenge.
In the 1980s, Sabo pushed the legal envelope himself by accepting work as redevelopment attorney, bond counsel and bond disclosure counsel simultaneously for several municipalities in San Bernardino County, including Ontario, San Bernardino and Fontana. Serving in those capacities entailed a considerable conflict of his functions, as he would stand to reap, as bond counsel and disclosure counsel, a percentage of the bond sales for bonds which he as redevelopment attorney had recommended for issuance. In this way, Sabo personally profited as a consequence of the legal advice he was providing as redevelopment attorney, throwing the wisdom of that advice into question. Sabo was able to function in this manner for several years, but the practice was criticized and questioned, ultimately resulting in a state attorney general’s opinion that highlighted the conflict-of-interest inherent in such arrangements. One by one, the entities that had been using Sabo in such dual or triple capacities discontinued doing so.
A scandal that materialized as a consequence of Sabo’s lax oversight within the context of his conflict-laden service as redevelopment attorney and bond counsel was that relating to the issuance of $65 million in bonds by the Fontana Redevelopment Agency in the 1980s to pay for infrastructure at the massive Southridge development in southwest Fontana. That project’s developer, the Ten-Ninety Corporation, claimed it did not have the money to pay for basic improvements such as streets, curbs, gutters, sidewalks, storm drains, sewers and the like to accommodate the development. To facilitate the project, the city council, acting as the redevelopment agency board in accordance with Sabo’s advice, issued $65 million worth of public improvement bonds together with taking out $55 million worth of loans from a glaziers’ union to pay for that infrastructure. Sabo, as bond counsel and disclosure counsel, was paid a one half of one percent commission on the sale of the bonds – $325,000. The bonds were actually purchased by the owners of the Ten Ninety Corporation, which raised questions about the accuracy of the company’s earlier claim that it did not have the wherewithal to pay for the requisite infrastructure to complement its project. The city of Fontana continues to pay $3.14 million per quarter – $12.56 million per year – to those bondholders. Sabo was never held to account for failing to fully inform the Fontana City Council/redevelopment agency board that the agency was enabling the developers to boost their profits on the development, despite his role as disclosure counsel.
Sabo, who grew up in New York, went to college at Youngstown State University in Ohio where he graduated magna cum laude in 1969, and later attended and graduated from the University of Denver College of Law in Colorado.
Shortly after passing the bar, he went to work for renowned municipal-bond lawyer James Warren Beebe. Under Beebe’s tutelage, Sabo learned first the rudiments, then the finer points and in time all of the permutations of public financing instruments and arrangements.
He eventually forged off on his own, forming his own law firm, which focused primarily on the practice of  municipal law, redevelopment law, public finance and municipal bond law. At various times, his firm included David Gondek, Alexis Crump, Stephen Deitsch and Charles Green. He and his firm were particularly active in various municipalities in San Bernardino County, Los Angeles County and Riverside County.
In the 1980s and 1990s, Sabo was counsel to the San Bernardino Redevelopment Agency, which utilized his guidance in arranging for the redevelopment of several of the city’s dilapidating districts, including the area that was transformed into Hospitality Lane, which now is one of the few areas of that city thriving economically.
Sabo was considered a leading authority on all versions of financial mechanisms, instruments and strategies within the public sector, such as tax allocation bonds, industrial development bonds, residential mortgage revenue bonds, hospital bonds, public benefit corporation bonds and capital appreciation bonds, as well as financing schemes that entailed a public agency’s formation of adjunct agencies with varying types and intensities of taxing, borrowing, lending, revenue producing and utilizing, and bond issuing capabilities.
Sabo’s clients recognized he could be counted upon to find a way to proceed with their programs and agendas, despite legal restrictions or regulations that hamstrung them.
In 2000, Sabo signed on with the law firm of Lewis Brisbois Bisgaard & Smith, a large national law firm which employs more than 800 attorneys at offices in Atlanta, Beaumont, Charleston, West Virginia, Chicago, Dallas, Fort Lauderdale, Houston, La Quinta, Lafayette, Las Vegas, Los Angeles, Madison County, Illinois, Newark, New Orleans, New York, Orange County, Phoenix, Sacramento, San Bernardino, San Diego, San Francisco, Seattle, Tampa, Temecula and Tucson.
His association with that prestigious firm, however, did not prevent him from continuing to court controversy. One such brouhaha manifested when he took on representation of clients engaged in litigation against the city of San Bernardino, the parent authority over the redevelopment agency and economic development agency he was legal counsel to.
At the time of his death, Sabo’s actions in his capacity as counsel to the San Bernardino International Airport Authority, a joint powers authority involving the cities of San Bernardino, Highland, Colton and Loma Linda and the county of San Bernardino focused on the civilian use conversion of the former Norton Air Force Base, were under scrutiny by the FBI. Federal agents were looking into Sabo’s relationship to Scot Spencer, who until recently was the contract developer of the airport, and one of Spencer’s business partners, T. Milford Harrison. Harrison was formerly the executive director of the San Bernardino International Airport Authority.
Spencer, who served time in federal prison in the 1990s following his conviction on bankruptcy fraud charges stemming from his efforts to revive Braniff Airlines, was hired by the authority board to develop the airport on the basis of his contacts in the airline industry.
Spencer’s management of what was supposed to be a $38 million renovation of the airport’s passenger terminal and a $7 million development of its concourse was dogged by cost overruns, boosting the combined cost of the passenger terminal and the concourse to $142 million. No commercial airlines have yet flown out of the airport, despite the completion of those improvements. Instead, Spencer exploited his position at the airport, showing favoritism toward companies he owned or controlled and set up at San Bernardino International Airport, including SBD Aircraft Services, Norton Aviation Maintenance Services, Unique Aviation, San Bernardino Airport Management, SBD Properties LLC, KCP Leasing and Services, SBAM Technics, and SBD Aircraft Services, to the detriment of other aviation-related companies located there.
One such company was Aeros Aeronautical Systems Corp., a blimp builder which did work on dirigibles and other lighter-than-air craft in Hangar 695, which it had leased at the airport.
In 2008, business was booming for Aeros, and the company was making its lease payments to the airport authority on time and in full. But that year, two companies Spencer was a controlling partner with, SBD Aircraft Services and Norton Aviation Maintenance Services, entered into a subcontract with another Spencer-affiliated outfit, Unique Aviation, for the renovation and refurbishing of a then-35-year-old Boeing 727-227. Spencer claimed he needed the hangar space Aeros was using to have SBD and Norton Aviation do the work. Despite the consideration that Aeros was a tenant paying top dollar for the space it was using and that it had secured in June 2008 two successive short term leases with 30-day termination notices to undertake tests on a dirigible, Spencer used his leverage with the San Bernardino International Airport Authority to have Sabo author a letter which the airport authority’s then-executive director Don Rogers signed that essentially evicted Aeros.
In July 2008, before Aeros vacated the hangar, Spencer signed a lease for Hangar 695 at a rate less than half of what Aeros was paying for the space and despite the consideration that Aeros had yet to vacate it. When Aeros did not leave quickly enough to satisfy Spencer, who said he was prevented from completing $750,000 worth of repairs on the 727, he threatened to sue the airport authority. Before the incident was over, Aeros, which had offered the promise of remaining as a longtime paying tenant, left in a huff, never to return. The authority kowtowed to Spencer even further by providing him over $1 million worth of concessions, including the forgiving of a $155,000 balance on a previous loan, the extension of another $550,000 loan at 5 percent interest, and an ongoing $315,000 hangar rental subsidy, all of which were approved by Sabo. Sabo had also signed off on Spencer’s partnership with T. Milford Harrison, a former executive director of the airport authority.
In September 2011, the FBI raided San Bernardino International Airport Authority headquarters and offices and hangars at the airport itself, seizing hundreds of documents. An investigation into the potential delivery of kickbacks to airport authority officials was continuing at the time of Sabo’s passing.

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