Defense Seeks, Prosecution Opposes Supreme Court Review Of Colonies Case Rulings

(December 3)  The defense in the Colonies Lawsuit Settlement Public Corruption Case has cited the prosecution’s own previous filings with the California Supreme Court to convince the Supreme Court to again consider several pithy legal questions arising out of the matter.
The case, which revolves around charges of conspiracy, bribery, extortion and the corruption of public officials, involves the activity leading up to the November 26, 2006 vote by the board of supervisors to confer a $102 million settlement on the Colonies Partners to bring to an end litigation brought against the county of San Bernardino and its flood control division over drainage issues at the company’s Colonies at San Antonio residential and Colonies Crossroads commercial subdivisions in northeast Upland.
In 2010, prosecutors told a grand jury that Jeff Burum, one of the managing principals in the Colonies Partners, with the assistance of one-time sheriff’s deputies union president Jim Erwin, first threatened and coerced then-supervisors Bill Postmus and Paul Biane into supporting the lawsuit settlement along with their board colleague Gary Ovitt. Prosecutors further alleged that after the vote was made Burum provided separate $100,000 bribes to Postmus and Biane as well as Ovitt’s chief of staff, Mark Kirk, in the form of donations to political action committees the three set up and controlled. In February 2010, that grand jury indicted Postmus and Erwin on a variety of political corruption, bribery, perjury and conspiracy charges. They pleaded not guilty to those charges but the following year Postmus pleaded guilty to 14 charges against him and turned state’s evidence. He then testified before a second grand jury, which on May 9, 2011 handed down a superseding 29-count indictment that renamed Erwin and indicted Burum, Biane and Kirk.
All four pleaded not guilty and the case, known as People vs. Biane, et al, has been contentiously litigated all along.
After the 29-count May 2011 indictment was handed down, defense attorneys filed demurrers challenging the sufficiency of the case on a host of legal, factual and technical grounds. In August 2011, Judge Brian McCarville granted several of those demurrers, throwing out a number of the charges. The prosecution appealed McCarville’s ruling to the Fourth District Court of Appeal, a move which was matched by defense attorneys, who asserted that McCarville should have dispensed with even more of the charges than he actually did. The Fourth District Court upheld McCarville on all but one of his rulings favoring the defense and, in addition, threw out even more of the charges. Prosecutors then filed a last-minute appeal of the Fourth District Court’s ruling with the California Supreme Court, arguing the case itself, involving the alleged bribing of public officials and a creative approach in providing those bribes, merited the Supreme Court’s review. The prosecution at that point asserted the California Supreme Court should review the Fourth District Court of Appeal’s rulings because the matter represented a “high-profile public corruption case…important… to the citizens of California [that] is being closely watched, and will be used as a benchmark to inform the conduct of both public officials and those seeking to influence them as to what acts they can commit without subjecting themselves to prosecution.”
The California Supreme Court elected to consider the case and, after a year-long delay, reinstated the charges and sent the matter back to the trial court, where it is being heard by Superior Court Judge Michael A. Smith.
Earlier this year, defense attorneys filed a series of five motions with Smith seeking the dismissal of the entirety of the case, based on a number of grounds, including statute of limitations, 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 his first ruling on those motions, entered on July 24, Smith granted the dismissal of the issue at the heart of the case, a single conspiracy charge against each of the defendants, upon which the primary narrative of the case was hinged, including 43 overt acts. Smith granted that motion on his interpretation of the law that held conspiracy charges are subject to a strict three-year statute of limitations rather than the four years alleged by the prosecution. Because the last overt act of the conspiracy, that is, the final deliveries of the alleged bribe money in the form of the contributions to the political action committees, occurred in June and July of 2007 and the indictment did not come until May 2011, Smith concurred with the pleadings of Burum’s attorney, former federal judge Stephen Larson, that the statute of limitations had been exceeded.
Larson and the defense camp seemed to be making headway with Smith’s next ruling, which likewise was based on statute of limitations grounds, that sought the dismissal of twelve other charges in the case. Larson cogently argued that the statute of limitations on those charges had likewise been exceeded in that the victim, i.e., the county and its officials, knew of or had strong grounds to suspect as early as 2006 that the illegal activity described in the indictment had taken place, thus making the May 2011 indictment too late given the three-year statute of limitations. Smith granted that motion but then attenuated that defense victory by granting the prosecution the opportunity to amend the complaint to clarify that both law enforcement officers and county officials had no substantial indication that the alleged crimes had occurred until November 2008. Prosecutors in August availed themselves of that option by filing an amended indictment with that clarification, preserving those charges.
When Smith turned to the motions for dismissal based on lack of probable cause, jury misinstruction, prosecutorial misconduct and investigator misconduct, he uniformly denied those motions, allowing that portion of the case relating to misappropriation of public funds – Penal Code Section 424 – to proceed, as well as sustaining the charges of tax fraud and perjury against Erwin that were based upon his not having properly reported having received gifts from Burum. Smith did dismiss another set of perjury and tax fraud charges against Erwin, Biane and Kirk relating to the contributions to the political action committees they controlled, ruling such political donations cannot be considered income to the founders of the political action committees (PACS) or those in control of them. Smith also dismissed conflict-of-interest charges against Burum and Erwin, reasoning that Burum was never a public official and Erwin was not one at the time of the events in question.
In all, Smith threw out eleven of the 29 charges, but left nearly two thirds of the case, consisting of 18 of the counts, intact.
In response, both the prosecution and defense again sought to second guess the trial court, appealing Smith’s decisions to the Fourth District Court of Appeal. For its part the prosecution, consisting of Supervising Deputy California Attorney General Melissa Mandel and San Bernardino County deputy district attorneys Michael Abney, Lewis Cope and Reza Sadeghi, has indicated it wants the single conspiracy charge against each defendant thrown out by Smith reinstated. In his first filing with the appellate court, Larson on September 16 filed a writ of prohibition, challenging every ruling Smith made in favor of the prosecution relating to the motions to dismiss the charges against Burum. On September 26, Larson followed the writ for prohibition with a writ of mandate to the Fourth Appellate District Court in Riverside.
The Fourth Appellate Court, however, summarily dismissed both of Larson’s writs on October 14.
After an already pitched battle, with both sides fighting tooth and nail to scratch each others’ eyes out with regard not only to the facts of the case but both plainly understandable as well as arcane elements of law, Larson is refusing to give up an inch of legal ground and has now appealed the Fourth Appellate Court’s summary dismissal to the California Supreme Court.
The prosecution is hoping the Fourth Appellate District Court will reverse Smith and allow the conspiracy charges, around which so much of the case revolves, back in. Mandel, Abney, Cope and Sadeghi are looking forward to moving the case, now more than three-years old and dealing with events from eight and nine years ago, to trial. Accordingly, in response to Larson’s appeal of the Fourth Appellate Court’s summary dismissal, they asserted that the Supreme Court should simply refuse to entertain Larson’s appeal because the issues involved do not constitute matters worthy of the court’s scrutiny.
In their answer to Burum’s petition for review by the California Supreme Court, Supervising Deputy California Attorney General Melissa Mandel and San Bernardino County Deputy District Attorney Michael Abney assert, “This is the wrong case for this court to consider the issues presented in Burum’s petition for review, because the issues arose within the framework of the trial court’s comprehensive analysis of evidence presented to a grand jury during four weeks of testimony, resulting in more than 2700 pages of transcript and 266 exhibits. As such, review of the trial court’s fact-based rulings will not serve to guide future courts analyzing different evidence. Moreover, the petition seeks clarification of a recent decision of this court before its holding has been applied or interpreted by any appellate court, and it seeks intervention in this case before any of the issues have been decided by the Court of Appeal. At this stage in the proceedings, there is no chance of a different outcome even upon review and transfer, because Burum’s failure to create an adequate record precludes consideration of his claims on the merits.”
Mandel and Abney continue, “Burum seeks the exceptional remedy of a second grant of pretrial review by this state’s highest court, but granting his extraordinary request at this time will unnecessarily delay his trial with no resultant development in the law. The right time and proceeding to consider Burum’s claims is once the Court of Appeal has a complete record of the proceedings in the event of a post-judgment appeal. In the interim, it is time for trial in this important public corruption case.”
Mandel and Abney assert that the case of “People vs. Paul Biane, et al is now in its second phase, having been sent back to the trial court by the Supreme Court late last year. As such the case is “less than a year old” Mandel and Abney maintain, and thus it is not ripe for review by the California Supreme Court. “No appellate court has yet considered or interpreted its holding, including the Court of Appeal here which summarily denied Burum’s petition for writ of prohibition,” according to Mandel and Abney. “This court’s intervention is premature without any indication that appellate courts will apply People vs. Biane in a manner that triggers Burum’s concerns. Further, the claims raised in the petition are unlikely to arise in future cases in light of the guidance provided by People vs. Biane. This court [i.e., the California Supreme Court] has already found the allegations in the indictment sufficient to allege Burum aided and abetted bribery. Now, Burum asks this court to review the trial court’s findings that the evidence supported those allegations. That endeavor is unworthy of a grant of review.”
Noting that “Burum claims the requirement of ‘additional conduct’ beyond the mere offer of a bribe is an element of the crime” was needed to establish that he had engaged in facilitating bribery, and that “as such, the absence of a grand jury instruction on the issue invalidates the indictment” and that Burum has claimed “the trial court erred in finding sufficient evidence of additional conduct in the grand jury record,” Mandel and Abney assert that “The record reveals the trial court engaged in an extensive, fact-specific analysis, and reached a different conclusion than Burum about the sufficiency of evidence of additional conduct. The court found the grand jury record established two categories of ‘additional conduct.’ First, the evidence established that Burum used threats, coercion and intimidation to compel the recipients to accept bribes, which was additional conduct beyond his offer of a bribe, such that when the offer of a bribe seemed not to be sufficient, ‘the evidence supports the Grand Jury’s finding of probable cause that Mr.Burum then applied additional pressure to accept the bribe and subsequently vote on the settlement by the use of threats, intimidation and coercion.’ Second, the court cited the testimony of Adam Aleman that Burum suggested a sophisticated plan for the recipients to hide the payments by creating political action committees that the board members secretly controlled, which was additional conduct that aided and abetted the receipt of bribes by individuals who might otherwise have been concerned about the crimes being discovered.”
Adam Aleman was a staff member working in Postmus’ office.
In making their pitch to the California Supreme Court to review the case, Burum’s legal team, according to Mandel and Abney, “provided ‘selected excerpts’ of the grand jury transcript totaling 325 pages of a record which was at least 2716 pages long. The inadequacy of the record precludes the possibility of a different result upon review and transfer. Burum’s real complaint is the manner in which the trial court applied those holdings to he facts of his case. Review should not be granted to reconsider the trial court’s factual findings following its exhaustive review of the voluminous evidence provided to the grand jury. Nor is such review by the Court of Appeal available at this pretrial stage, because of the inadequacy of the record.”
Mandel and Abney assert that the “omitted portions of the trial court’s ruling belie Burum’s interpretation. In fact, the trial court did not find that any bribe would suffice as an act unauthorized by law. Rather, the court found the bribe in this case created a financial interest in the settlement, in the form of an expectation of kickbacks from the settlement proceeds, which was the unlawful act upon which the misappropriation charge was based.”
In his rebuttal to the prosecution’s answer to the petition to the California Supreme Court, Larson wrote “The fundamental flaw in the People’s answer to defendant Jeffrey Burum’s petition for review is exposed by comparing the following two statements, both made by the People, to this court, about this case: [1] ‘This is the right case for this Court to offer guidance on these important issues, and it comes at the right time.’ [2] ’This is the wrong case for this Court to consider the issues presented in Burum’s petition for review….’ The People made the first statement in 2012 when seeking review of the trial court’s dismissal of all bribery charges against Mr. Burum, and it led to this court’s decision in People v. Biane.”
According to Larson, “Nothing has changed between the People’s statements in 2012 and their statements now—except for the party seeking review.”
At issue, according to Larson, is “the same question for which the People successfully sought review in 2012, albeit in a different procedural context: When can an alleged bribe-giver be charged with aiding and abetting the receipt of the same bribe?”
The Supreme Court two years ago, Larson said, “answered that question for purposes of the charging phase. But on remand, the trial court failed to correctly apply the standard established by this court in People vs. Biane in the context of a Penal Code section 995 challenge to the grand jury’s probable cause finding.”
Penal Code Section 995 allows a defendant who has been indicted to petition the court to dismiss or set aside an indictment if the court determines the defendant has been indicted without reasonable or probable cause.
“The trial court’s misapprehension of People vs. Biane in that context is more than enough reason for this court to again take up the predominant legal issue in this case, and to provide needed guidance that will benefit not only these parties, but assure that future grand juries and courts correctly apply this court’s standard at the pivotal probable-cause stage of a criminal proceeding,” according to Larson. “Moreover, because of the important nature of the legal issues being addressed in this complex and novel prosecution, this remains the ‘right case’ at the ‘right time’ for the court to address the other two issues raised by Mr. Burum in his petition: The knowledge element of Penal Code section 424; and the remedy for grand jury misinstruction in the context of a Section 995 motion.”
Penal Code section 424 pertains to misappropriation of public funds, which Burum and the other defendants are charged with. It is Larson’s contention that Penal Code Section 424 was inappropriately applied to his client and the other defendants. In his writ to the Fourth Appellate Court which was summarily dismissed, Larson asserted a Penal Code Section 424 offense “must necessarily involve intent,” which he said his client and the other defendants lacked. “The trial court mistakenly held that the People’s admitted failure to instruct the grand jury on the intent element of Section 424 was harmless error,” Larson and another attorney working for Burum, Dennis Fischer maintain. “The factual record did not support a finding of probable cause as to the Section 424 charge.”
In his petition for review to the California Supreme Court, Larson wrote, “The second question raised in this petition is whether a defendant can be indicted for aiding and abetting an alleged misappropriation of public funds (Penal Code § 424) where the grand jury received no evidence that the public official ‘knew’ that a portion of the appropriation was without authority of law. The People’s primary argument against review of this issue is that it is a ‘disguised’ attempt to seek review of the trial court’s factual findings. [W]hen the trial court applied the law it had misinterpreted to the evidence that had been presented to the grand jury, it incorrectly held that a finding of probable cause on the bribery charges necessarily satisfied the knowledge element for the Section 424 charge. What Mr. Burum asks this court to review is the first stage of the trial court’s incorrect ruling: The misinterpretation of the law regarding the requisite knowledge for a Section 424 violation. That issue is an important one. There had to be probable cause that the supervisors knew, at the time of their vote, that they were appropriating a portion of the settlement funds for themselves in violation of the authorizing laws governing their conduct. Failing to understand this specific probable cause requirement, the trial court improperly based its ruling on the mere fact that the grand jury had found probable cause ‘that [the supervisors’] vote would be unlawfully influenced by the bribe that they were receiving,’ theorizing that this demonstrated knowledge that ‘the acceptance of a bribe in exchange for a vote was not authorized by law.’ In essence, the trial court borrowed the grand jury’s finding of probable cause for bribery and grafted it onto the knowledge requirement for the Section 424 charge. But that is not the standard articulated in People vs. Paul Biane, et al, and it is not consistent with the knowledge requirement.”
Pointing out that “The People actually concede instructional error on the Section 424 charge,” Larson asserts “Review is needed to instruct this trial court and future courts that there must be a specific finding that the defendant knew the appropriation of funds was without authority of law and that lack of evidence of such knowledge cannot be cured by evidence demonstrating knowledge of some other alleged wrongful conduct.”
Pointedly, Larson told the California Supreme Court that the prosecution was exercising out and out unprincipled intellectual dishonesty and legal discrimination by delaying the progression of the case to trial through filing an appeal of its own while asserting that the defense was retarding justice by also engaging in the appeal process.
“The People argue that Mr. Burum is ‘seek[ing] the exceptional remedy of a second grant of pretrial review by this state’s highest court,’ and that ‘granting his extraordinary request at this time will unnecessarily delay his trial,’” Larson wrote in his reply in support of the petition for review. “This argument merely confirms that the People are promulgating a double standard regarding appellate review. Two years ago, the People sought review in People vs. Biane, et al precisely because they asserted that the legal issues involved in this case were important enough for the highest court of California to consider despite the resulting delay. And now, at the same time they seek to block review here, they have chosen to pursue an appeal of the trial court’s dismissal of the conspiracy count. The People display no concern for a speedy trial when faced with adverse rulings in their case against Mr. Burum, but loudly decry his attempts to seek appellate review of incorrect legal rulings in their favor under the guise of wanting to advance this case to trial. In doing so, the People display a fundamental lack of fairness and an eagerness to obtain an unconstitutional tactical advantage.”
Larson continued, “Moreover, the People’s ‘delay’ argument is moot given that two of Mr. Burum’s co-defendants have recently been declared indigent by the trial court, leading to their previously retained counsel being relieved, and new counsel being appointed by both the trial court and the Court of Appeal, a development the People fail to mention in their answer. Given the complexity of this case and the hundreds of thousands of pages of discovery produced by the People, this will significantly delay any trial regardless of whether this court grants review. In the totality of these circumstances, it is far more important for this court to review the legal issues at stake here now, rather than have the parties and the trial court spend years preparing for and conducting a criminal trial only to find that the legal premises on which the trial was based were incorrect and require reversal. In fact, there is no better case for the Court to not only clarify the rule established in People vs. Biane, et al, but also to provide much needed instruction on these two other critical legal issues.”
The California Supreme Court is due to decide on or before December 26 whether it will consider the matter.

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