State Supreme Court Reinstates Earlier Dismissed Charges In Colonies Case

(December 26)  SACRAMENTO—The California Supreme Court on December 23 reestablished the essential elements of the Colonies Lawsuit Settlement Public Corruption Prosecution, granting the gist of prosecutors’ appeal more than a year and two months after the Fourth District Court of Appeal in Riverside dismissed the most crucial charges lodged against developer Jeff Burum, the central defendant in the case.
In February 2010, a grand jury indicted former county supervisor/county assessor Bill Postmus and one of his political associates, Jim Erwin, who had been the head of the county sheriff’s deputies union before he was appointed by Postmus to serve as assistant assessor. Five others were identified as unnamed co-conspirators in that indictment, which charged Postmus with a host of crimes, including conspiracy, soliciting bribes, accepting bribes, perjury, filing falsified documents and other violations of the public trust. The charges were filed in connection with his November 2006 vote, while he was still chairman of the county board of supervisors, to approve a $102 million legal settlement between the county and the Colonies Partners, which was controlled and managed by Burum and Dan Richards.
Erwin, who had been instrumental in vectoring monetary support from the sheriff’s deputies’ union to Postmus’s supervisorial and assessor campaigns  and was subsequently appointed to one of two assistant assessor positions Postmus established after his election as assessor, was charged with conspiracy, extortion and bribery, perjury, filing falsified public documents and tax evasion. Prosecutors alleged that Erwin, who was working as a consultant for the Colonies Partners in 2006, threatened to disclose damaging information relating to both Postmus and his then-board colleague Paul Biane before Postmus, Biane and a third member of the board, Gary Ovitt, voted to approve the $102 million settlement of the lawsuit the Colonies Partners had brought against the county over flood control issues at the company’s Colonies at San Antonio residential and Colonies Crossroads commercial projects in northeast Upland. After the settlement was approved in November 2006, according to prosecutors, Burum rewarded Postmus, Biane, Erwin and Ovitt’s chief of staff, Mark Kirk, with $100,000 each in contributions to political action committees they controlled.
Initially Postmus and Erwin both pleaded not guilty to those charges. But in March 2011, Postmus pleaded guilty to all fourteen counts contained in the indictment against him along with one other unrelated drug possession count and agreed to turn state’s evidence. He was the star witness before a newly-impaneled grand jury that heard evidence and testimony from a total of 45 witnesses in April 2011. In May 2011, that grand jury handed down a superseding 29-count indictment that collectively charged Erwin, Burum, Biane and Kirk with conspiracy relating to the alleged bribery scheme. Erwin was hammered with multiple counts, including receiving a bribe, acting as Burum’s agent, perjury, filing falsified documents and tax evasion. Biane was charged with soliciting and receiving a bribe in exchange for his vote. Kirk was charged with receiving a bribe in exchange for influencing his boss, Ovitt, to vote to approve the settlement. Burum was not charged with bribery. Rather, prosecutors fashioned charges against him that alleged aiding and abetting Postmus, Biane and Kirk in receiving bribes. The defendants were also charged with conflict-of-interest and misappropriating public funds. No substantive counts of extortion were charged in the superseding indictment and the extortion counts against Erwin in the February 2010 indictment were dispensed with, although extortion allegations were wrapped into the broad conspiracy count contained in the May 2011 indictment.
Defense attorneys filed demurrers on behalf of their clients, motions which called into question the legal sufficiency of the charges against the defendants. Cited in those demurrers were the cases of People v. Davis, People vs. Clapp and People vs Wolden, all of which bore upon the inability of prosecutors to charge a defendant with conspiracy or aiding and abetting a crime when that individual stands accused of a crime that necessarily involves the involvement of another individual.
In August 2011, Judge Brian McCarville granted several of the defendants’ demurrers in what has become known as the Colonies Lawsuit Settlement Public Corruption Prosecution, ruling that a defendant such as Burum who was essentially accused of giving bribes cannot also be charged with aiding and abetting the receipt of bribes, and he dismissed all four bribery counts and one of misappropriation of public funds against the Rancho Cucamonga-based developer, leaving only two of the original seven charges against the figure at the center of the case intact. McCarville further dismissed one felony count of misappropriation of public funds for each of the other defendants. The prosecution, consisting of both the California Attorney General’s office and the San Bernardino County District Attorney’s office, appealed McCarville’s ruling to the Fourth District Court of Appeal in Riverside, which in October 2012 upheld McCarville with regard to the four bribery counts against Burum that had been tossed, and also threw out a conflict-of-interest count McCarville had let stand. The appeals court did, however, reinstate the misappropriation of public funds charge against Burum that McCarville had dismissed.
Prosecutors then made a last-minute appeal of the Fourth District’s ruling to the California Supreme Court on December 10, 2012.
The defense teams for Erwin, Biane and Kirk followed in the wake of the legal trail blazed by Burum’s attorney, former U.S. District Court Judge Stephen Larson. It was Larson who had formulated the defense that rested upon the Davis, Clapp and Wolden precedents, which McCarville and later the Forth District Court of Appeal utilized in their respective decisions to eviscerate the prosecution’s case.
In the case of People v. Davis, the court ruled that “the giver and receiver of a bribe are no longer accomplices one to the other.”
The Clapp case, from 1944, pertained to three women accused of involvement in an abortion, which at that time was illegal, and the conviction of the woman on whom the abortion was performed. The court held the woman submitting to an abortion was not punishable as a principal under one section of the penal code because her conduct was prohibited under another section. As such she was deemed not to be an accomplice in the crime of the other parties.
The case of People v. Wolden, which in itself relied upon the precedent of the Clapp Case, related to the case of Russell Wolden, the one-time assessor of San Francisco County who was indicted on 10 counts of accepting bribes and one count of conspiracy to accept bribes. Wolden was convicted on the conspiracy charge and eight counts of accepting bribes. Upon appeal, it was determined that the giver and receiver of a bribe are not guilty of a conspiracy, because the two crimes require different motives or purposes and that the giver of the bribe is not an accomplice in the “separate and distinct crime” of bribe taking.
Moreover, McCarville and the Fourth District Court of Appeal rejected the application of conspiracy statutes to Burum’s action, applying a principle of law that holds that two individuals who are alleged to have engaged in a crime that necessarily involves two parties cannot be charged with conspiracy merely on the basis of that crime having taken place.
Citing Davis, Clapp and Wolden, Stephen Larson, in arguing before California’s highest court, repeated the arguments he had made before the lower courts, stating prosecutors had engaged in “an impermissible charging scheme” that “ignores the legislative history  and judicial interpretations.”
The prosecution, arguing on behalf of both  the state of California and the county of  the San Bernardino, propounded the argument that Burum’s alleged bribery of Postmus, Biane, and Kirk went beyond a simple exchange of money for votes and involved an elaborate set of circumstances involving threats, extortion, and intermediaries acting on Burum’s behalf in addition to the provision of the alleged bribes.
Led by deputy attorney general Melissa Mandel, the prosecution referenced the action of Erwin, who was described in the indictment as Burum’s “agent,” “mule” and “underling,” to propound the theory that his action in having prepared with public relations consultant Patrick O’Reilly, prior to the 2006 election, never-delivered mailers and handbills which dwelled on derogatory information relating to Postmus and Biane, constituted blackmail and extortion that paved the way for the bribes that were delivered to Postmus and Biane after the vote conferring the $102 million settlement on the Colonies Partners. The combination of the bribes, extortion, blackmail and the use of a third party, i.e., Erwin, in this regard, Mandel suggested, constituted a facilitation of the crime that went beyond mere bribery. Burum, she said, utilized his “enormous political power and financial resources to coerce the public officials into accepting his bribes.”
In its review of the matter, the California Supreme Court, composed of Chief Justice Tani Gorre Cantil-Sakauye,  and justices Joyce Kennard, Marvin Baxter, Kathryn Mickle Werdegar, and Goodwin Liu, Ming Chin and Carol Corrigan,  found other precedent-setting political corruption cases, those of People v. Gonzales and Solis and  Calhoun v. Superior Court, to be more relevant than the Davis, Clapp and Wolden cases to the circumstances involved in the Colonies Lawsuit Settlement Public Corruption Prosecution than was presumed by McCarville and the Fourth District Court of Appeal.
“We conclude that the Court of Appeal erred,” Justice Baxter wrote in an opinion with which all of his colleagues concurred. “Although neither the offer nor payment of a bribe in itself can establish that the offeror aided and abetted the separate crime of receiving the same bribe, the status of being the offeror or payor of a bribe does not disqualify that person, as a matter of law, from complicity in the offense of receiving the bribe.  Whether the offeror is guilty of aiding and abetting the receipt of the bribe depends on whether there is evidence that, in addition to the offer or payment of the bribe, the offeror ‘with (1) knowledge of the unlawful purpose of the perpetrator; and (2) the intent or purpose of committing, encouraging, or facilitating the commission of the offense, (3) by act or advice aids, promotes, encourages or instigates, the commission of the crime.’   (People v. Gonzales and Solis (2011) 52 Cal.4th 254, 295-296.)  Similarly, being the offeror or payor of a bribe does not disqualify that person, as a matter of law, from culpability for participating in a conspiracy to accept that same bribe.”
The ruling further states, “Because the Court of Appeal sustained the demurrer based on its incorrect understanding of the law, we reverse that part of the judgment of the Court of Appeal and remand for further proceedings.”
Deeper within the 21-page opinion, Baxter wrote, “The Court of Appeal held that neither Burum (the offeror of the bribes) nor Erwin (Burum’s agent) could be charged with aiding or abetting the receipt of the bribes.  Its conclusion rested on the theory that the offeror of a bribe cannot ‘as a matter of law’ aid and abet another person in receiving the bribe.  The Court of Appeal was mistaken.  Whether the offeror of a bribe may be charged with aiding and abetting another in the crime of receiving the bribe depends on whether the offeror’s conduct, beyond merely offering or paying a bribe, satisfies the elements of aiding and abetting the receipt of the bribe.”
Baxter shed further light on the court’s reasoning.
“The Court of Appeal’s analysis with respect to the target crimes of bribery in the conspiracy charge was very brief and rested on its erroneous conclusion that defendants, as a matter of law, could not be charged with aiding and abetting the recipients of the bribes.  Thus, in the Court of Appeal’s view, Burum’s demurrer should have been sustained as to the target crimes of bribery in the conspiracy charge ‘because the crimes defendant Burum allegedly conspired to commit are ones the law states he cannot commit.’  Similarly, because Erwin could not be charged with aiding and abetting Biane in receiving or accepting bribes, he could not be charged with conspiring to commit those crimes.  The sole authority cited was Wolden, which declared that the giver and the receiver of a bribe cannot be ‘guilty of conspiracy, because the two crimes require different motives or purposes.’ This part of Wolden, though, suffers from the same infirmity as the argument rejected in the preceding part that the offeror of a bribe can never aid and abet the receipt of a bribe.  Although the giver and receiver of a bribe may have different intents, it is not required, as a matter of law, that they must have different intents. After all, it is well established that an individual may entertain multiple criminal objectives simultaneously.”
Specifically, Baxter wrote, the case of Calhoun v. Superior Court establishes a bribery scheme can entail a conspiracy if it involves enough factors and individuals.
“Indeed, Calhoun v. Superior Court (1955) 46 Cal.2d 18 (Calhoun) sustained a charge of conspiracy in closely analogous circumstances,” the opinion states. “Calhoun, acting on behalf of various wholesale and retail liquor distributors, arranged to use trade association money to donate to the political campaign of a candidate for the Board of Equalization, which issued licenses to sell alcoholic beverages.  Although such contributions appeared to be prohibited by Government Code section 5002.6, Calhoun was alleged instead to have conspired with the candidate and others to solicit and receive political contributions from those who were regulated by the Board of Equalization in violation of Elections Code section 5002.5.  Calhoun, like defendants here, argued that donors and recipients of contributions could not conspire to commit the same substantive offense as a matter of law, relying on the opinion of this court in denying a petition for hearing in People v. Keyes.  Over the objections of a dissenting justice that ‘there can be no conspiracy between the donor and the donee’ and that a conspiracy requires ‘there be a common unlawful motive,’ a majority of this court nonetheless permitted the prosecution to go forward.  We rested our decision on the particular facts of the case—i.e., evidence presented to the grand jury of ‘an elaborate conspiracy to utilize contributions from both retail and wholesale liquor licenses to finance [the candidate]’s political campaigns.’ In light of that evidence, we reasoned that a trier of fact could have concluded that Calhoun had ‘a much more intimate participation in [the official]’s campaign than that of one who acted solely as a donor.’
“Here, as in Calhoun, the indictment alleges that Burum and Erwin participated in a conspiracy that was more elaborate than the mere agreement that a particular bribe be accepted, but involved and depended on the conduct of numerous parties to ensure that at least three supervisors be influenced to approve the $102 million litigation settlement,” Baxter wrote. “The Court of Appeal thus erred in ruling that Burum and Erwin, as a matter of law, could not conspire to commit the target bribery offenses.  We therefore reverse the order sustaining the demurrer as to these target crimes in count 1 and remand to the Court of Appeal to consider, in the first instance, defendants’ remaining grounds for demurrer.”
Thus, it is now not only possible but probable that Burum will be headed to trial on charges of conspiracy, the aiding and abetting of bribery, and misappropriation of funds.The appellate court’s dismissals of aiding and abetting of a conflict of interest against both Burum and Erwin were upheld by the Supreme Court. Likewise, the conspiracy count and the charges of engaging in a conflict of interest and aiding and abetting Biane in his reception of a bribe that had earlier been dismissed against Erwin, who also faces 15 additional charges, were reinstated.
While the prosecution was savoring the reinstatement of the charges, it yet faces the burden of proving the case in a courtroom. It must also return to the Fourth District Court of Appeal to establish that the allegations in the indictment indeed match the presumption that aiding and abetting of the various crimes alleged actually took place.
Though the California Supreme Court rejected the Fourth District’s reasoning that the alleged offerer of a bribe cannot be charged simultaneously with aiding and abetting in the reception of the same bribe categorically as a matter of law, it sent the matter back to the Fourth District to have that panel determine if the circumstances laid out in the indictment indeed indicate that aiding and abetting took place. If such a determination is made, the aiding and abetting charges will stand. If not, they could again be dismissed.
“We express no opinion as to the validity of other defenses asserted by defendants in their demurrers,” the Supreme Court decision states. “We hold only that, at the demurrer stage, the bribery counts and the related portions of the conspiracy count are not barred as a matter of law merely because the indictment alleges that defendant Burum was the offeror of the bribes or that defendant Erwin acted as Burum’s agent.”
With the pre-trial jousting over the legal sufficiency and appropriate form of the charges now closed, Larson said he is anxious to move to trial, where the focus on the facts of the case will redound to his client’s vindication.
“Unfortunately the Supreme Court was legally required to accept the government’s unfounded and fabricated allegations as true, but we look forward to the case being remanded back to the Superior Court where we can finally present the facts and where we will prevail,” Larson said. “Today’s decision marks the beginning of the end for this politically-motivated prosecution.”

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