Rulings On Dismissal Motions Dismantling Colonies Corruption Case

By Mark Gutglueck

(July 25)  More than three years after indictments were handed down against Rancho Cucamonga-based developer Jeff Burum and three former San Bernardino County officials he is accused of bribing, San Bernardino Superior Court Judge Michael A. Smith eviscerated the case against the defendants, throwing out conspiracy and a dozen other charges that were considered central to the case.
After hearings on Wednesday and Thursday, Smith had jettisoned all 13 of the counts he had ruled upon up to that time on statute of limitations grounds and had not yet fully weighed the time bar test against the remaining sixteen counts.
Once the challenges to the charges on statute of limitations grounds are completed, Smith will take up four further motions for dismissal that cite other legal considerations.
In May 2011, a grand jury indicted Burum, former San Bernardino County Second District Supervisor Paul Biane, former sheriff’s deputy union president and one-time assistant county assessor Jim Erwin and Mark Kirk, the former chief-of-staff to Second District Supervisor Gary Ovitt. That indictment superseded a February 2010 indictment in which Erwin and former First District Supervisor Bill Postmus had been named.
Both indictments pertained to what prosecutors alleged was a bribery scheme by which Burum induced Postmus and Biane to join with Ovitt in a November 2006 vote to confer a $102 million settlement on the Colonies Partners to settle a lawsuit that company had filed against the county and its flood control district over water drainage issues at that company’s Colonies at San Antonio residential and Colonies Crossroads commercial subdivisions in northeastern Upland. Burum and Dan Richards were the two managing investors in the Colonies Partners, a consortium of 21 entities dedicated to undertaking the Colonies at San Antonio and Colonies Crossroads developments.
Prosecutors alleged that Burum, with the assistance of Erwin, who in 2006 was serving as a consultant to the Colonies Partners, and Patrick O’Reilly, a public relations firm proprietor, threatened to carry out a public information campaign that would expose that Postmus, who was then chairman of the board of supervisors as well as the Republican Central Committee and was vying for county assessor, was a closeted homosexual and drug user and that Biane, who was then sponsoring a measure to increase the county supervisors’ annual salaries from $99,000 to $150,000, was teetering on the brink of bankruptcy. Ultimately, the mailers containing that derogatory information relating Postmus and Biane were never sent out. After the November 2006 vote conferring the $102 million payment on the Colonies Partners, in which supervisor Josie Gonzales and former supervisor Dennis Hansberger dissented, Burum provided separate $100,000 contributions to political action committees formed by or already set up and controlled by Erwin, Biane, and Kirk, as well as two $50,000 contributions to political action committees controlled by Postmus.
Both Postmus and Erwin pleaded not guilty to the charges in the original February 2010 indictment. In March 2011, however, Postmus entered guilty pleas on all 14 charges against him contained in that indictment. He then served as the star witness before a second grand jury that was impaneled in April 2011 and which the following month returned the 29-count superseding indictment naming Erwin once more and adding Kirk, Biane and Burum, Kirk was alleged to have used his influence over Ovitt to induce him to vote for the $102 million settlement.
That indictment came more than four years and five months after the 3-2 vote by the board of supervisors to settle the litigation between the Colonies Partners and the county for the $102 million payout and just short of four years after the last overt act alleged in the indictment – the last of Burum’s four $100,000 contributions to the others.
Because of the time that had elapsed and a three-year statute of limitations on the crime of bribery, the prosecution team, consisting of lawyers from both the San Bernardino County District Attorney’s Office and the California Attorney General’s Office did not charge Burum with bribery but rather with conspiracy to facilitate the delivery of a bribe. The crime of conspiracy in California carries a four-year statute of limitations.
Burum, as the provider of the alleged bribes, was considered the central figure in the case and the charges against him as the linchpin of the prosecution’s effort.
Attorneys for the defendants, including Stephen Larson and Mary Andrues, representing Burum, David Goldstein, representing Biane; Raj Maline, representing Erwin; and Paul Grech, representing Kirk, were present during the proceedings.
The prosecution was represented by supervising deputy attorney general Melissa Mandel, deputy district attorney Michael Abney, deputy district attorney Lewis Cope and deputy district attorney Reza Sadeghi.
For the most part, it was Larson who spoke on behalf of the collective defense. At one point Goldstein inveighed in particular against the long series of delays in the case that had precluded his client from clearing his name. Mandel and to a lesser extent Abney carried forth the prosecution’s presentation. Cope and Sadeghi were not significant participants in the dialogue with Smith.
The hearing on the dismissal motions began on Wednesday July 23 and continued through yesterday, July 24. From the outset, the prosecution fared poorly. Early in the proceedings, Smith ruled that the theory prosecutors relied on, specifically that there was a four-year rather than a three-year statute of limitations on the conspiracy charges, was in error. Smith then took up the conspiracy count lodged against all four defendants and dismissed it. The court then went onto a discussion with regard to the prosecution’s assertion that law enforcement made discovery of the criminal acts alleged within the indictment on November 1, 2008, while investigators with the district attorney’s office were interrogating former assistant county assessor Adam Aleman. The full round of discussions on that matter had not concluded at the end of the court day on Wednesday. Court was recessed until Thursday. On July 24, after further discussion, Smith ruled that, given that the last of the overt acts alleged in the indictment had occurred in the summer of 2007, the assertion in the indictment tolling the statute of limitations by alleging the crimes where not discovered until November 1, 2008 was insufficient to invoke the statute of limitations, resulting in 12 more of the offenses, pertaining to Penal Code 424 misappropriation of public funds charges as well as Burum’s having aided and abetted the receipt of bribes being time barred.
Smith deferred until Monday, July 28, a decision on whether to give prosecution leave to amend the indictment to include language that would state clearly that the representatives of the victim, i.e., government employees, had no indication or knowledge of the criminal offenses alleged in the indictment until the interrogation of Aleman.
Some of the most dramatic exchanges during the hearing came as Larson, himself a former federal prosecutor and federal judge, advocated on behalf of his client in answer to Smith’s inquiries with regard to interpretations of law or case law precedents cited in the motions for dismissal. During one of these, an object demonstration of just how nuanced, risk-laden and bold the defense Larson has constructed is. At issue was Larson’s contention that prosecutors had blown the case on statute of limitations grounds by waiting until 2011 to get the indictment, approaching five years after the vote to confer the $102 million payment on the Colonies Partners was made and almost four years after the final overt act alleged in the indictment.
In driving home his point, Larson asserted that all of the information presented to the grand jury in 2011 had essentially been available years before. This amounted to instructional error, Larson insisted, a misleading of the grand jury that induced it to indict his client in what Larson said was a violation of Burum’s due process rights. Citing the case of People v. Lopez which pertains to the requirement that prosecutors inform grand jurors of the timeline on the discovery of criminal activity when a statute of limitation issue impinges on that activity, Larson fairly scoffed at the suggestion that law enforcement – investigators and prosecutors – and county government officials did not believe in 2006 that there was something untoward about the $102 million settlement. Word was circulating around the county that the $102 million payout had been a “gift of public funds” to the Colonies Partners, he said. By inference he referenced a complaint supervisor Josie Gonzales made to the district attorney’s office relating to Burum’s activities in 2006 and he pointed to auditor-controller Larry Walker’s balking at cutting a check to cover the first installment toward the $102 million before checking with counsel about the legality of the payment. Then-county administrative officer Mark Uffer, acting county counsel Dennis Wagner and county counsel Ruth Stringer were all provided information which Larson maintained constituted notice that a crime may have occurred.
This prompted Smith to remark that Larson, in pursuing the Lopez citation, was getting very close to suggesting his client had engaged in wrongdoing.  Smith said there was a three-pronged requirement with regard to the instructional error standard in the Lopez case – first, that there must be reasonable grounds for suspicion that a crime has taken place; second, there must be available to authorities knowledge or information with which to initiate the investigation; and third, it must be established that if the investigation had taken place it would have led to the discovery of the same facts that led to the indictment.
“We believe Mr. Burum is innocent,” Larson responded. “He did not bribe anyone. But there was a lot of suspicion.” Referencing what was available to county officials early on, Larson said, “This is the exact same evidence used to establish criminal intent.”
Smith said that the suspicions that existed as early as 2006 were not necessarily sufficiently backed with knowledge or information to instigate an investigation at that time.  Larson argued it was the standard relating to dismissal on demurrer that should be applied rather than the standard provided for in the Lopez case and that the previous judicial findings in the case of People vs. Gnass relating to jury misinstruction required an automatic dismissal. Smith dismissed all 12 charges, deferring until next week on whether the prosecution could amend the complaint to reestablish many of those charges, which dealt with the misappropriation of public funds and Burum’s delivery of the $100,000 political contributions prosecutors say were tantamount to bribes.
In seeking to preserve the prosecution’s right to amend the indictment, deputy attorney general Melissa Mandel asserted that despite whatever suspicions that may have existed in 2006 and 2007, they were insufficiently grounded in fact to justify the filing of criminal charges against the perpetrators at that time. It was Aleman, the assistant assessor serving under Postmus who told district attorney’s office investigator Hollis Randles in November 2008 that bribes were involved, Mandel said, that “made the light go on.”
Larson said the indictment was fatally flawed. Among its defects, he said, was that it blurred the distinction between bribes and kickbacks, which are subject to different legal restrictions. While the indictment contends Biane, Kirk and Postmus were bribed, the over acts described in the indictment show them receiving money after the vote took place, such that the payments qualified as kickbacks. Larson suggested that all of the elements to establish those payments as kickbacks, including a quid pro quo arrangement ahead of time, had not been established in the indictment or otherwise by the prosecution.
In addition to ruling on whether the prosecution will be permitted to amend the indictment with regard to the 12 counts thrown out on Thursday, Smith on Monday will be faced with the remainder of the first motion seeking dismissals on statute of limitations grounds along with  four other motions to dismiss virtually all of the charges on various grounds, including lack of probable cause, jury misinstruction, prosecutorial misconduct in having raided the defense camp and seizing privileged materials crucial to the defense, along with prosecutorial and investigator misconduct in having made misrepresentations to obtain search warrants and hiding a witness from the grand jury. In addition Smith will be called upon to consider objections to 278 statements made by witnesses and prosecutors on admissibility grounds.

As it now stands, of the original 29 counts in the indictment, 16 felony counts remain and none of the charges against Burum have survived, subject to Smith’s decision on whether to allow prosecutors to amend.
Looking forward to next week, given the pattern and tenor of Smith’s rulings so far, it would appear that all of the charges in the case will have been thrown out by the time the first three dismissal motions are fully heard. At that point, it will likely be up to Smith’s discretion on whether the misconduct motions will be heard. Any court finding of misconduct on the part of an attorney must be reported to the state bar. If the state bar confirms that judicial finding, the lawyer(s) in question can be disciplined up to and including  his/her or their right to practice law in California. Trailing behind the defense motions to dismiss the charges is a prosecution motion to disqualify Larson as Burum’s attorney. That motion is based upon Arent Fox, Larson’s law firm, having hired former assistant U.S. Attorney Jerry Behnke in May. Behnke was formerly a part of a joint federal/state/local task force that targeted public corruption crime, and it is the prosecution’s contention that Behnke’s employment with Arent Fox provides the defense with an unfair advantage. If all of the charges in the indictment have been dismissed at that point, the disqualification motion will have become moot.

Leave a Reply