By Mark Gutglueck
Nearly five years and eight months after three public officials and the developer accused of bribing them were indicted and just short of seven years after charges were initially filed in the case, the Colonies Lawsuit Settlement Public Corruption Prosecution will finally go to trial early next month.
In February 2010 charges were first filed against one of the current defendants, Jim Erwin, and the once-powerful county politician, Bill Postmus, who has since turned state’s evidence in the case. The matter is being handled by a prosecution team that consists of a rare combination of California Attorney General’s Office and San Bernardino County District Attorney’s Office personnel. Jerry Brown, who is now the governor but was then California Attorney General, characterized the case as involving the “biggest corruption scandal in San Bernardino County history, possibly in the history of California.”
But in the years since, Stephen Larson, a former federal judge who is the lead defense attorney for the central defendant in the case, Jeff Burum, has succeeded in having a once-broad set of charges narrowed and he has shed doubt on at least some of the elements of the prosecution’s theory of guilt. In particular, Larson has made a convincing show that key witnesses have made contradictions with regard to essential tenets upon which the indictment hinges.
Yet the case has survived a multitude of legal challenges at the trial court, appellate and Supreme Court level. Central to the case is an undeniable component of political corruption, which inhabited the government during the time in question. And the case is imbued with the dual specters of extortion and bribery, the accusation, at least, that politicians who had commanded the faith and respect of those who had elected them were nothing like what they represented themselves to be and that prominent members of the private sector who had benefited from governmental action had exploited these flawed and dishonest leaders, compromising them with graft and the threat of exposure.
The Colonies case is indeed a very complexified one that defies easy understanding or straightforward analysis. It was evolving even before criminal charges were filed and is continuing to do so. Some of the participants in what the prosecution insists were shady dealings have changed their stories, in some cases, multiple times. The case, in large measure, relies upon the word of those who have admitted guilt and are now awaiting sentencing based upon their cooperation with the prosecution, a circumstance that for some raises basic questions about the integrity of the proceedings. Central in the case is the profit motive, a concept that is not at root criminal in implication. But into the mix is the contention that early on in the quest for profit, maybe from the outset, there was something illegitimate afoot and that the profit motive grew indistinguishable from greed, and that politicians and other public officials, either willingly at the inducement of bribes, or unwillingly but under the weight of extortion, facilitated that greed.
The Colonies case relates to property located in the northeastern quadrant of what is now Upland. Beginning in the 1980s, a series of developers interested themselves in the possibility of converting that property, long owned by the San Antonio Water Company and utilized for purposes of groundwater recharge and flood mitigation, into a residential subdivision with some order of a commercial component. But the property was problematic. Lying just south of the foothills at the eastern extension of the San Gabriel Mountains, it was subject to flooding even during moderate rain, as the water would cascade down the south face of 8,696 foot high Ontario Peak, which towers above Upland and San Antonio Heights to the north, and inundate the property. During a major deluge the entirety of the property – what is referred to as an alluvial creek – would be become a raging river. A few quarries had been sunk into the property, from which granite, gravel and limestone had been extracted during the early decades of the 20th Century. Those quarries were utilized as catch basins and recharge basins, into which the flood waters would pour and then gradually settle down into the water table. In 1933, 1934 and in 1939, the San Bernardino County Flood Control District had recorded flood easements on the property. In Upland, as in its neighbors to the west and east, respectively, Claremont and Rancho Cucamonga, the splendor and class of residential property generally intensifies as one moves northward. By the late 1970s and early 1980s, the San Antonio Water Company had less and less need for the property, consisting of roughly 489 acres. It created the San Antonio Liquidation Trust to divest itself of the land. The first major developer to consider buying the property and developing it was the Kohl Company, out of Orange County. Kohl looked at all of the requirements to get an actual entitlement to build. That included redressing the overwhelming flood issues, which would entail building a contrivance to carry the water away and meet the statutory requirement of ensuring that in the face of the worst flooding that could be expected to occur statistically in a 100-year period that the houses would remain one foot above the level of the water. That was too daunting, the Kohl Company concluded and its incipient plan for the project was abandoned. Next up was the William F. Lyon Company, which dubbed the project “The Lakes at San Antonio.” Ultimately, the Lyon Company came to the same conclusion as the Kohl Company. Then Lewis Homes took up the project. Lewis, too, would conclude that the project simply would not pencil out if it were to be developed to the traditional standards, and passed.
In 1997, Dan Richards picked up the fallen baton. The former member of the Foothill Fire District and a principal in Stephen Daniels Commercial Brokerage, Richards astounded observers when, in the name of a consortium of 19 investors known as the Colonies Partners, he paid more than $16 million to purchase the 489 acres from the San Antonio Liquidation Trust. Some questioned not only Richards’ business acumen but his sanity. The property was yet beset with flood issues. It was shown on Upland’s planning and zoning maps as undevelopable flood control land. The three county flood control easements remained in effect. Nevertheless, Richards confidently maintained that he and his co-managing principal in the Colonies Partners, Jeff Burum, who was 11 years his junior, were going to see the project through to completion, without a whole lot of public elaboration on how, exactly, they would do that. Burum was a developer aspiring to greatness with, at that point, a relatively limited portfolio, but knowledge about what it took to take bare land and go vertical. Richards’ expertise lay in two slightly different, but yet related and relevant areas. His first relevant talent was buying already developed property, most often commercial property, at a rock bottom, or near rock bottom price, and then leasing it, at a substantial rate. His second relevant talent was his knowledge of the political lay of the land, the pay-to-play atmosphere that prevailed in San Bernardino County and particularly on the west side of San Bernardino County in the communities of Rancho Cucamonga and Upland.
For the first 130 years of its history, San Bernardino County had been controlled, essentially, by economic forces around the county seat in San Bernardino and the upscale residential and agricultural community, Redlands, whereto the movers and shakers in San Bernardino had gravitated. In the 1980s, however, the East Valley was in decline and the western side of San Bernardino County was on the rise. Ontario was on its way to becoming the county’s most vibrant city economically; Chino Hills, which was then an unincorporated county community at the confluence of Riverside, Orange and Los Angeles counties in San Bernardino County’s southwest corner was gradually growing, moving toward an eventual incorporation in 1991 and becoming ultimately, today, the county’s most affluent community; and Rancho Cucamonga, then just recently incorporated in 1977, was beginning a two-decade span of explosive growth that would transform it from a 49-square mile city of grapevine-and-citrus-strewn properties in which the population was slightly more than 30,000 to an urbanized municipal juggernaut approaching a population of 170,000.
To achieve his developmental agenda with the property the Colonies Partners had acquired, Richards knew, he would need the cooperation of two political entities – the City of Upland, within which the property was located, and the County of San Bernardino, which yet had authority over the land in terms of its existence as flood control property by virtue of the flood control easements there.
Richards set about trying to wire the deal politically. While he was at work doing that, he pulled the first of several rabbits out of his upturned hat. For decades, the eastern extension of the 210 Freeway, also known as the Foothill Freeway, had been languishing on the drawing boards. In the early 1970s the western portion the freeway had been completed. But the intention of seeing it completed to reach its ultimate conclusion of reaching San Bernardino before arcing down to Redlands stalled, having met several obstructions, including a shortage of funding and the reality that some 60 houses had been constructed smack dab in the middle of the freeway’s right-of-way in San Dimas. By the late 1990s the pressure of growth throughout the greater Los Angeles area was overburdening the region’s two major east-west freeways, the 60 and the 10. The unacceptable gridlock on those two highways to the south created an impetus to push through with the completion of the 210. At that point, to accommodate a span of that freeway, the Colonies Partners sold to CalTrans, for $17 million, a swath of 40 acres lying very near the top of the 489 acres the company had purchased from the San Antonio Liquidation Trust. In one fell swoop, Richards had recouped for himself and his fellow investors their original stake.
In Upland, the alpha personage on the city council at that point was the mayor, Robert Nolan. An adoptee who had grown up to become a junior high school principal, Nolan’s visage was fixed in a permanent scowl, as if every person he had to deal with was an eighth grader who had just been caught smoking in the middle school restroom. He brooked no nonsense, with anyone. And by that point in its history, Upland, an upscale bedroom community with a less than dynamic commercial element, had begun to pare back its municipal operations. It had recently dispensed with its assistant city manager and no longer had a city engineer. Nolan understood things in the starkest of terms. Residential development, he knew, meant more people. Houses and people, ever more people, Nolan understood, were net money consumers, requiring more services – streets and sidewalks and sewer capacity and maintenance, police and fire response. The increase in property tax to be had from the building of those houses would not offset the increase in the city’s cost of providing those services. Nolan therefore resisted the Colonies project, not in any dramatic way, but subtly. To Richards it was clear that the massive development project he had envisioned was not likely to come to fruition, on any grand scale, under Nolan. Adroitly, however, Richards did not challenge Nolan head-on. He planned and arranged for the project to proceed, almost as if Nolan were not there. He did not attack him or challenge him. He simply out-waited him, outlasted him. In 2000, Nolan, then 72, did not seek reelection. It was at that point that Richards moved politically, providing key backing to what was then the wave of Upland’s future: John Pomierski.
Pomierski was on the make, looking to get ahead, using his position as mayor to do it. It would be demonstrated, a decade later, that he was also on the take. But early on, everyone simply assumed the best and that the new mayor was earnestly looking after Upland’s best interests. Richards ensured that he, Burum and their company stayed on Pomierski’s good side. During the slightly more than ten years Pomierski was in office, the Colonies Partners made $180,843.94 in direct contributions to his political war chest. The company also made indirect contributions to Pomierski through other entities. Unlike Nolan, Pomierski was ready for Upland to make way for the Colonies at San Antonio residential and Colonies Crossroads commercial subdivisions in northeast Upland. If the city did not have the engineering and planning expertise to facilitate the project, Pomierski was absolutely amenable to accepting an offer by Richards and Burum to pay the city to hire consulting engineers and land use planners to accommodate the new development. The city would not need to pay for the project planning and work to determine what infrastructure was needed and to what standard those roads, and utilities, and streets, and sidewalks and sewers and storm drains should be constructed. The development company would pay for all that. The city accepted that arrangement. And the Colonies Partners, true to the commitment by Richards and Burum, footed the bill for that work.
A by-product of that arrangement was all issues of potential contention that were likely to or actually did arise between the developer and the city were bypassed or, essentially, resolved in favor of the entity footing the bill, the developer, the Colonies Partners. One issue given somewhat short shrift pertained to flood and drainage issues. The city came to rely upon the county and its flood control division to tackle that thorny problem. Somehow, the very expensive and complicated matter of ensuring that the people who would end up living at the Colonies project once it was completed would not end up knee deep or higher in water every time it rained did not come to the fore, at least at the time the project was being given go-ahead and passing several milestones toward actuality. Simultaneously, the city was dealing with the challenge of the incoming 210 Freeway, which would run the entire length of the city east-west, exacerbating drainage issues.
The city turned to the county to provide at least a partial solution. Ultimately, the county would construct for the city what would be called the 20th Street Storm Drain, which started in the northwest quadrant of the city, picking up flood water originating there and elsewhere as it moved eastward, remaining for most of its span north of the freeway. The county designed that storm drain so that after it had traversed most of the city eastward, it would then drop down and turn south beneath the freeway where it was to deposit the storm water into one of the drainage basins identified under the 1933, 1934 and 1939 flood control easements. That basin was located on the Colonies property.
For Richards and Burum and their partners, the last crucial part of the political formula that needed to be perfected was achieving the acquiescence of the county with regard to their development proposal, which was to take place on property traditionally used for flood control purposes. Here lay their most daunting challenge. Upland at that time fell entirely within the county’s Second Supervisorial District, The Second District supervisor, Jon Mikels, was at that point the dean of the board as its then-longest serving member. Mikels, a former councilman and mayor of Rancho Cucamonga, was not, particularly, ill-disposed toward the Colonies project. He was, however, distrustful of Dan Richards, with whom he was thoroughly familiar when they were both elected officials in Rancho Cucamonga. When Mikels was mayor and on the city council, Richards was a board member of the Foothill Fire District, which prior to and during Rancho Cucamonga’s first 12 years of existence as a municipal entity oversaw the fire department servicing the entire Rancho Cucamonga community. Mikels was experienced enough to know that any development carried with it a need for the commensurate development of infrastructure, the cost of which had to be defrayed either by the developer or the taxpayers of the community where the development would take place. Mikels was conscious as well, indeed hyperconscious, of the flood containment issues relating to the property in question, and that any development there would entail complications for the county and its flood control district. He sensed that Richards would, if he could, militate toward having the issues relating to drainage and flood hazard alleviation on the property handled in such a way as to minimize the Colonies Partners’ costs while transferring the financial burden of providing key infrastructure to support the development to the county and its taxpayers. Mikels made no secret of his feelings, and enunciated his intent of seeing that the Colonies Partners, rather than the county, would pay the freight for planning, engineering and constructing the flood control infrastructure – the storm drains, holding basins and conveyance pipelines or channels – needed to keep the project above water during a deluge.
Mikels had first been elected as supervisor in 1986 and was subsequently reelected in 1990, 1994 and 1998. He would need to stand for reelection in 2002. As one of the more powerful political personages in San Bernardino County, Mikels was more than relatively confident of his reelection chances at that point. He had what he considered sufficient money banked in his campaign treasure chest to run a token campaign, and seemed to be in a position, as the incumbent, to raise a substantial amount of money for a more spirited campaign if anyone approximating a serious challenger were to emerge. Richards and his associates, including his fellow investors in the Colonies Partners, acting with sufficient stealth and political aplomb, recruited a candidate straight out of Mikels’ heartland – Rancho Cucamonga and the Rancho Cucamonga City Council – to take him on in 2002. Paul Biane was a real estate agent who had been elected to the city council in 1994, at least partially on the strength of his status as the scion of the Biane winemaking dynasty that had existed in Cucamonga for a century, and he was reelected in 1998. At first, Biane, whose presence on the Rancho Cucamonga City Council had been less than spectacularly conspicuous or noteworthy in any realistic sense, appeared to be no more than the token opposition Mikels anticipated, the move of someone lower down on the political totem pole who was making a run intended less to oust the incumbent and more to husband for the challenger a greater degree of name recognition and perhaps positive name identification for a future run for higher office. What Mikels came to recognize too late was that Richards had arranged to vector a substantial amount of money into Biane’s campaign – including $70,000 that Richards/ Burum/the Colonies Partners provided on their own and another $200,000 they helped collect from other donors. Discovering too late that Biane’s electoral challenge was indeed a serious one, Mikels was caught flatfooted. In the March primary, Biane bested Mikels 14,850 votes or 46.6 percent to 12,430 votes or 39 percent, with a third candidate, Bill Peters, following behind with 4,569 votes or 14.3 percent. Based on that showing, Biane jumped ahead – well ahead – in the political fundraising game before Mikels switched into high gear, by which time Biane had tapped into several of the donors that Mikels might have relied upon had he been more aggressive and made the first move. Biane pressed his advantage even further at that point as the 2002 election season moved into its second phase, a run-off between the two top vote-getters that November. Before the campaign concluded, Biane’s campaign assailed Mikels with a number of “hit pieces” – political mailers and handbills that dwelt in depth on Mikels’ real or manufactured political mistakes and miscalculations and untoward political alliances or activities. Simultaneously, Biane’s campaign was able to put out a flood of electioneering material celebrating him as a conscientious and qualified candidate for supervisor, representing a welcome change of the guard in county government. In November, Biane crested to a 30,032 votes to 23,455 votes victory over Mikels, 56.1 percent to 43.8 percent.
Also up for reelection in 2002, was the incumbent district attorney, Dennis Stout. Stout was a steadfast Jon Mikels ally. Before becoming district attorney, Stout had been Rancho Cucamonga mayor. Before he was elected mayor in 1986 with Mikels’ endorsement, Stout had been on the Rancho Cucamonga Planning Commission, to which he had been nominated by Mikels. Ultimately, Stout in 2002 would be, like Mikels, defeated in his bid for reelection, unseated by one of his deputy prosecutors, Mike Ramos. Richards and Burum and their company threw their weight behind Ramos that year, though not with the same intensity that they backed Biane against Mikels. Nevertheless, through their direct contributions to Ramos that year, the Colonies Partners registered as the third largest donor to the Ramos campaign, behind Ramos’ wife Gretchen, who put $50,000 of her own money obtained from an insurance settlement into her husband’s campaign, and the union representing the county’s sheriff’s deputies. When it was considered that during that era the Colonies Partners proved itself to be the largest monetary donor to the deputies’ union and its political action committee, the Colonies Partners were actually, when both direct and indirect contributions were counted, the second largest donor to Ramos’s initial campaign for district attorney.
That same year, 2002, the Colonies Partners had filed a lawsuit against the county, alleging the company had been damaged by the county flood control district’s completion of the 20th Street Storm Drain for Upland and the subsequent vectoring of water onto the Colonies Partners property. The channeling of the storm water onto its land, the Colonies Partners alleged resulted in further difficulties and delays of the company’s plans and development schedule and interference with the sale of completed homes. The case was assigned to Judge Peter Norell. At once, legal sparring between the Colonies Partners and the county began. A crucial element of the county’s defense consisted of the 1933, 1934 and 1939 flood control easements the county flood control district had recorded on the property. Those easements, ostensibly, gave the county the right to convey regional water run-off to that spot, where two basins had long existed and which were traditionally used for flood water overflow. Unbeknownst to the county or its lawyers, at that point while this phase of the litigation was ongoing, was that Judge Norell’s ex-wife had moved into a home in the Colonies at San Antonio subdivision. An investigation later carried out by the FBI would find that the price Catherine Norell paid for the house was something close to $200,000 less than that which was then being paid for comparable houses in the same subdivision. Significantly, Peter Norell would make a crucial ruling in the case in favor of the Colonies Partners that undercut the county’s defense. Norell made a finding that the county had abandoned the three flood control easements recorded in 1933, 1934 and 1939, such that it no longer had the right to deposit the water from the 20th Street Storm Drain onto the Colonies property. That ruling was devastating to the county, which was faced with the prospect, on one extreme, of continuing the litigation in a severely weakened position or, on the other end, capitulating by making some type of settlement with the plaintiffs. It did neither, however; rather, it appealed Norell’s ruling to the Fourth Appellate District in Riverside. Eventually, the appellate court reversed Norell’s decision, holding that the easements remained valid, such that the county was fully at liberty to vector water into one of the basins until it was filled to the brim and that it also had the right, with the consent of the Colonies Partners, to continue to convey water into the second basin, but would need to recompense the Colonies partners for the use of the second basin. The only remaining outstanding question, according to the appellate court, was what that compensation should be. The appellate court sent the matter back to the trial court to have it make that determination.
In the meantime, Biane’s Political stature had grown. Almost immediately upon being elected to the board of supervisors, he had formed an alliance with another member of the board, Bill Postmus, who had been elected as the First District supervisor representing the county’s desert region two years prior to Biane’s ascendancy in 2000. Postmus and Biane shared youth and Republicanism. Postmus had been 29 years old when he was elected, making him the youngest member of the board of supervisors in San Bernardino County history. Biane was 38 when he was elected. Together, they represented a generational shift at the ruling echelon in San Bernardino County government, the replacement of the old blood with new. At that point, San Bernardino County was one of the last bastions of the Republican Party in California. Both men were active in the GOP and in 2004, they collectively pulled a quadruple coup: Already they were members of the San Bernardino County Republican Central Committee. Postmus was chosen to serve as chairman. Likewise, Biane was selected by the rest of the committee to serve as vice-chairman. The board of supervisors that year rotated Postmus into the position of board chairman and Biane was selected as the vice-chairman of the board of supervisors.
The lawsuit over the vectoring of flood water from the 20th Street Storm Drain onto the Colonies property was yet ongoing at that point. Postmus had to stand for reelection to the board of supervisors that year. There was no realistic prospect that he would be defeated, although he did face a challenge from Bob Nelson, a longtime critic of the county and its policies. This gave the Colonies Partners the opportunity to foster good relations with Postmus. All told, the Colonies Partners would deliver $400,000 in political contributions to him during the first decade of the Third Millennium. Only some of that came in directly. Much of it went through other sources, such as the Safety Employees Benefit Association, the union representing San Bernardino County’s deputy sheriffs, known by its acronym SEBA. The Colonies Partners or its investors endowed SEBA’s political action committee with hundreds of thousands of dollars. SEBA, in turn, infused Postmus’ electioneering fund with a like amount of money. Postmus used only a small percentage of that money to run his winning campaign against Nelson, whom he defeated handily, 45,711 votes or 84.74 percent to 8,136 votes or 15.08 percent. Postmus used a considerable portion of that money to make loans or contributions to other candidates, thereby extending his political reach and expanding his influence in his role as a political kingmaker, strengthening his stranglehold on San Bernardino County politics.
In 2004, Richards and Burum likewise provided then-Ontario Mayor Gary Ovitt with $50,000 in his 2004 electoral effort against Chino Mayor Eunice Ulloa in that year’s special election for Fourth District supervisor.
Postmus bestrode San Bernardino County like some kind of political colossus. In his early thirties, he was the boy genius of San Bernardino County politics and governance. Everyone who knew anything about local politics was certain that he would not remain as county supervisor much longer but would move on, perhaps to the California Assembly or Senate. It was taken as an article of faith that at some point he would be a Congressman. What lay beyond that was a matter of fate. Indeed, a fellow Republican and ally, then-Victorville Councilman Bob Hunter, publicly ruminated on the possibility that Bill Postmus would one day be president of the United States. That possibility saw reflection on every television screen across America on Thursday September 2, 2004 at the Republican National Convention at Madison Square Garden in New York City. As George Bush gave his acceptance speech, clearly visible on the platform behind him among the Republican dignitaries in attendance was Bill Postmus. And Paul Biane’s wagon was securely hitched to Bill Postmus’s star. When Postmus moved on to higher office, it was understood, Biane would inherit the prestige and power of Postmus’ positions. From there, Biane would be able to advance himself as well.
In 2005, Postmus and Biane intensified their political command over San Bernardino County. At 20,105 square miles, San Bernardino County is the largest county geographically in the United States outside of Alaska, encompassing more land area than four New England states combined. And while Postmus and to a lesser extent Biane already had control over the Republican Party machinery in San Bernardino County, that geographical vastness would give them the pretext to seize even more power. Because the county was so far flung, they asserted, oftentimes less than half of the members of the Republican Central Committee would show up for meetings. This meant important Republican Party business was not being taken care of in a timely manner and the Party of Lincoln was in danger of losing ground to the Democrats. To remedy this, they proposed creating an executive committee of the central committee, composed of existing elected central committee members who would be empowered to enact policy just as the entire committee was chartered to do, and do so without any interference from the full standing committee once the executive committee was in place. The full committee agreed to this arrangement and Postmus and Biane then appointed their hand-picked selections to the executive committee and had the full committee ratify them as such. In addition to themselves, Postmus and Biane installed as the executive committee members, with only one exception, individuals who were employed by each of them as members of their supervisorial staffs. They now had utter and complete control of the Republican Party in San Bernardino County. No party money would go to any candidate running for political office without their say-so. In addition, they controlled other political action committees and were free to dole out unused money from their own campaign funds as they deemed fit.
Despite their vaunted position at the very pinnacle of the political heap in San Bernardino County, Postmus and Biane both harbored deep and dark secrets that represented a mortal danger to their respective political careers. Bill Postmus was the son of a retired Los Angeles County Sheriff’s Department lieutenant. Like his father he espoused conservative Republican and family oriented values, occasionally referencing his Christian beliefs. His was a rock-ribbed, virtually right wing Republican political philosophy of not only financial but social conservatism. Moreover, he looked the part: bespectacled, wholesome and clean cut, the quintessential image of respectability.
Postmus was also a homosexual and his secret sojourns into the gay subculture of Southern California had exposed him to the use of illicit drugs such as methamphetamine, ecstasy and amyl nitrate, and as early as 1984 he was developing an intractable addiction to those substances.
Paul Biane’s family had developed one of the most celebrated of wineries in what had been the Cucamonga Wine District. At one time his family owned or controlled over 500 acres in Cucamonga. The Pierre Biane Winery still exists and is owned by the family as an historical edifice in Rancho Cucamonga, though it is no longer a functioning winery. And Paul Biane, as a younger man enjoyed the image of being one of upscale Rancho Cucamonga’s landed gentry. The real estate business he had both before and after he became a member of the Rancho Cucamonga City Council relied in no small part on this cachet. But in reality, Paul Biane was not wealthy and the show of success that he made was simply that, a show. His masquerade as a financial heavy hitter at home within the world of high finance and deal-making paralleled that of his political ally Postmus, as both inhabited a place of primacy in the Republican political constellation in which neither was truly a member.
They had both been able to assume that position of political primacy through the support of their political supporters, at the forefront of whom were the Colonies Partners.
But the piper would at some point need to be paid. Each would have to do something to justify all of that political largesse. And in 2005, they took their first stab at it. In March of that year, with the litigation between the Colonies Partners yet dragging on, an effort to negotiate some settlement outside the rubric of the court case was made. Postmus, Biane and two of the county’s lawyers representing it in the Colonies Partners litigation, Stephen Kristovich and Paul Watford, met with Richards and Burum and their lawyers, along with a consultant for the Colonies Partners, former state senator Jim Brulte. There was a good deal of back and forth, at which time, seemingly spontaneously, Postmus and Biane requested that all of the attorneys leave the room. Nearly an-hour-and-a-half later, when the attorneys were called back in it was announced that a tentative settlement had been reached: The county would pay $77.5 million for 37 acres of the Colonies property that included the two flood control basins, and the county would also hand over to the Colonies partners some surplus county land located in Rancho Cucamonga just below Deer Canyon.
Kristovich and Watford could scarcely believe what they were hearing. The numbers being tossed about were out of keeping with reality, the two lawyers felt. In their view, the flood control land the Colonies Partners controlled was indisputably committed, by virtue of the 1933, 1934 and 1939 easements, for use to mitigate flood water runoff and could not be considered to be worth any more than $1 million, at best. They questioned the stampede toward making the settlement, which they saw as ill-advised and questionable. They wrote a memo to the board of supervisors which was highly critical of Postmus and Biane’s action and then resigned as the county’s lawyers. About a month later, that memo was made public. What they called the “leaking” of the memo infuriated Postmus and Biane and they called for an investigation as to how it had gotten out, virtually accusing then-supervisor Dennis Hansberger, who was opposed to any such settlement with the Colonies Partners, as being the culprit.
Yet while Postmus and Biane decried the leak, public perception, or the vast majority of it, ran against them and what was being seen as a completely unjustifiable giveaway of public funds to an entity that was their major political donor which appeared to have used its political entré with them to get out from underneath its responsibility to pay for the infrastructure necessary to accommodate their development. The $77.5 million settlement deal fell through.
The reports of Postmus and Biane’s effort at cutting the deal with Richards, Burum and Brulte, who would pull down a $1 million consulting fee for his work on behalf of the Colonies Partners, raised eyebrows all around. Soon, the 2004-05 Grand Jury began looking into the matter, and formed an ad-hoc committee which was chartered to explore reports that Richards and Burum were providing Postmus, Biane and perhaps other county officials bribes, kickbacks or some other form of inducement to encourage the settlement of the lawsuit on terms that favored the Colonies Partners. As that investigation was progressing, Postmus and Biane would learn they were under scrutiny. In short order, Biane went to Norell, who at that point had acceded to the position of San Bernardino County presiding judge. Using his authority as presiding judge, Norell, according to then-grand jury foreman Bob Burkhardt, confronted Burkhardt and grand jury advisor Clark Hansen, Jr. Calling the investigation a “witch hunt,” Norell insisted that the ad-hoc committee’s inquiry be terminated. Burkhardt said Norell had quashed the investigation after Postmus and Biane became alarmed at the direction in which the grand jury was headed.
Some five months after the investigation ended, Burkhardt told the press, “Supervisor Biane spoke to the judge and said he was unhappy with one of our interviews with him. We don’t think he was very comfortable with the questions he was asked.”
Burkhardt said the ad-hoc committee was looking into reports that kickbacks and bribes relating to the Colonies project had been paid. “We heard a lot of rumors,” he said. Burkhardt said he went along with backing off of the investigation of the two supervisors because “The judge has the authority to shut an investigation down or to disband the grand jury. He would have disbanded the grand jury if we continued. I had to decide if we would challenge the supervisors. My decision was we would not.”
On July 29, 2005 the Fourth Appellate District Court overturned Norell’s ruling relating to the county’s abandonment of the flood control easements. The county, buoyed by that ruling, pushed ahead with defending the case, having retained the law firm of Jones Day to represent it going forward. The matter was fast becoming too hot for Norell to handle and the case was transferred to Judge Christopher Warner. Further legal sparring between the two parties took place. In the Summer of 2006, after both consented to the matter being heard as a bench trial, that is, with no jury being impaneled and Warner being entrusted to render all decisions in the case, a trial was held. A number of significant events occurred during and shortly after the trial. One of those was a ruling by Warner that essentially reinstated the legal advantage the Colonies Partners had fleetingly held as a consequence of Norell’s ruling that the county had abandoned the flood control easements. The easements, Warner ruled, had not been abandoned but rather were “extinguished.” His ruling had the same legal effect of declaring them abandoned, since the county’s reliance on the validity of the easements stood as the core of its defense for vectoring the water onto the Colonies property. Yet, Warner’s ruling involved a logic-defying contradiction. The concept of abandonment hinges on lack of use, or non-use, meaning that an easement must be used on a relatively continuous basis to be kept alive. Norell had ruled that the county had allowed the easement to go dormant and then into extinction by non-use. Considering the same set of issues and the same facts, Warner had made a finding that was 180 degrees diametric from Norell’s finding: The county had not underused the easements but had overused them, an act so egregious that it called for eliminating or extinguishing the easements altogether. Based upon this pretext, Warner ruled against the county at the conclusion of the trial. Though he had entered a verdict, he did not immediately make a determination as to damages.
Shortly after the trial concluded, information would emerge to indicate that Warner had not maintained an arm’s length distance from those litigating before him. In particular, county officials would learn, Warner had an undisclosed personal relationship, described as a close friendship, with Richards. An unmistakable indication of that relationship, involving an incident at the courthouse after a post trial hearing on some motions relating to the case which involved court personnel, made its way to county counsel. The county, based on Warner’s ruling relating to the extinguishment of the easements and other information it was accumulating, was preparing to appeal the case to the Fourth District Court of Appeal, and was awaiting only for Warner to enter his monetary judgment before doing so.
2006 was an election year. Postmus had been reelected in 2004 to a four-year term as First District supervisor, and thus did not have to stand for re-election. Nevertheless, he had entered the political fray, seeking the post of county assessor. To some, it seemed a puzzling move. Postmus was seeking to trade the post he held – supervisor, a powerful and far reaching post made all the more powerful by virtue of his having acceded to the position of board chairman – for a somewhat more obscure county elected position of some degree of functionality but which was limited in scope and attention. Yet for others, the transition made perfect sense. Already, Postmus was the head of the Republican Party in San Bernardino County, in control of how party money had been and would continue to be doled out to political hopefuls or existing office holders vying for election, reelection or advancement to higher office. By becoming assessor, the official in charge of determining how property and both commercial and industrial operations were to be assessed – in effect the county’s primary taxing authority – Postmus would be in a position to induce property owners who could see savings of hundreds or thousands or tens of thousands or even hundreds of thousands of dollars, depending upon how his office assessed their holdings, into contributing to his campaign for his next higher office or those of other politicians he supported. Being assessor could be a stepping stone to the next political position up the food chain. Biane, first elected as supervisor in 2002, was due to stand for reelection. But at that point he was so powerful politically, that no opponent emerged. He was going to have an easy go of remaining as supervisor. But he was bedeviled by another consideration: the post of supervisor paid a mere $99,068 a year, plus benefits. Biane told some of those within his circle that such a low salary for decision makers dealing with such important issues facing the county and its citizens was an “embarrassment” and he groused that his low pay was imposing a hardship on him and his family such that he was “living paycheck to paycheck.” A solution, he said, was to give supervisors a living wage, suitable to their station. Thus, he sponsored Measure P, which called for upping each supervisor’s salary to $150,197 a year, before benefits. He offered it as a reform measure, putting into Measure P a three term limitation on the number of times a supervisor could be elected.
In this way, both Postmus and Biane had something riding on the 2006 election. Moreover, the San Bernardino County District Attorney’s Office and the California Attorney General’s Office would later allege this left both men vulnerable to extortion. Indeed, prosecutors would three and four years later propound two somewhat similar but distinct narratives on how that extortion was applied.
In the first one, offered in 2010, Richards and Burum acted to together with the assistance of a single unnamed or multiple unnamed private investigators, former president of the sheriff’s deputies union Jim Erwin, and a public relations consultant, Patrick O’Reilly, to ruthlessly exploit the vulnerabilities in Postmus’ and Biane’s lives, characters, personalities and situations to force them to settle the lawsuit the Colonies Partners had brought against the county on terms favorable to them and the other investors in the Colonies Partners. In 2011, prosecutors offered a second narrative which for the most part omitted Richards’ role and depicted Burum as driving the extortion effort.
In both versions prosecutors propounded that in the late summer of 2006 derogatory information relating to Postmus and Biane, including the findings dug up by at least one private investigator who had rummaged through Postmus’ garbage, was provided to O’Reilly, who prepared electioneering material that exposed Postmus as a drug-addicted and closeted homosexual and Biane as a spendthrift who was teetering on the brink of bankruptcy. Ultimately, after that electioneering material in the form of mailers and handbills was made known to Postmus and Biane either directly or indirectly, it was withheld.
On November 26, 2006, three weeks after the November 5, 2006 election in which Postmus was elected assessor and Measure P passed, the board of supervisors by a 3-2 vote with Postmus, Biane and supervisor Gary Ovitt in the majority and supervisors Dennis Hansberger and Josie Gonzales dissenting, conferred a $102 million settlement on the Colonies Partners to bring the lawsuit filed against the county over flood control issues on the Colonies property to a close.
Over the course of the seven months following that board vote, the Colonies Partners, with checks signed by either Jeff Burum or Richards, provided two separate $50,000 donations, for a total of $100,000 to each of two political action committees controlled by Bill Postmus, a $100,000 contribution to a political action committee controlled by Paul Biane and his chief of staff, Matt Brown, a $100,000 contribution to a political action committee set up and controlled by Jim Erwin, and a $100,000 donation to a political action committee founded and controlled by Mark Kirk, who was at that time supervisor Gary Ovitt’s chief of staff.
In the aftermath of the lawsuit settlement and the payout of the $102 million to the Colonies Partners, it had become painfully obvious to a wider and wider cross section of the county’s residents that county officials and the county government itself could be bought and that a pay-to-play ethos permeated county culture. Indeed, the district attorney himself, Mike Ramos, was participating in the graft, campaign finance reporting documents filed with the state during that time frame show.
In the late spring/early summer of 2007, roughly five months into Bill Postmus’ tenure as county assessor, information was provided to the San Bernardino County Grand Jury that when he was still First District supervisor, developers Dino DeFazio, Ken Richmond and Jim Tatum had provided Postmus with cash payments with the expectation that the board chairman would “politically fast-track” their projects. Just as that investigation was picking up momentum, Ramos swooped in and quashed it.
Early the next year, Ramos would pick up what to nearly all who knew of it considered to be an elaborately laundered bribe from Richards and Burum. Richards, Burum and the Colonies Partners throughout the decade would be the single largest contributor to sheriff’s deputies union, the Safety Employees Benefit Association and its political action committees, consisting of $425,000 alone between 2003 and 2008. On September 30, 2004, the Safety Employees Benefit Association, known by its acronym, SEBA, provided the Friends of Mike Ramos with $5,000. That money was given to Ramos’ campaign, despite the consideration that he was not up for election in 2004. Nearly seven-and-a-half months later, on May 13, 2005, SEBA came across with another $5,000 donation to Mike Ramos. On an unspecified date between January 1, 2008 and June 30, 2008, the friends of Mike Ramos paid Gretchen Ramos, Mike Ramos’ wife, $10,124.64. Campaign finance documents Ramos filed that year showed that $124.64 of that amount was made as a “reimbursement for [a] California District Attorneys Association Dinner,” what might be construed as a legitimate expense. The other $10,000 went to the district attorney’s wife, according to a campaign finance reporting document filed by Ramos known as a California Form 460, “for campaign services.” In 2006, Ramos had run no campaign, as no opponent had emerged to run against him. 2008 was not an election year for him.
To the informed, the $10,000 in money from the Mike Ramos electioneering fund originating with the Colonies Partners that ended up as spending money in the Ramos household appeared to be hush money to silence the district attorney and forestall a criminal investigation or prosecutorial action with regard to the quid pro quos touching on the Colonies lawsuit settlement. And indeed, with report after report swirling in the county with regard to a bribe paid to one of the judges who oversaw the lawsuit filed by the Colonies Partners against the county and exorbitant donations being made by the Colonies Partners to the politicians who conferred on the company a $102 million settlement, the district attorney’s office showed no interest in looking into those matters.
Later in 2008, in front of man, God and everyone else, Postmus began to implode. Previously, in 2007, upon moving into the assessor’s post, Postmus created a second assistant assessor’s position in the office and installed Erwin and Adam Aleman in those $120,000 yearly salary slots. Aleman, who later was widely suspected of being Postmus’s lover, was then 22 years old, having a thin resumé which included having been one of the field representatives in Postmus’ office during the final two years Postmus was supervisor. Postmus met Aleman when the latter was 19 and working as a maitre d at an Outback Steakhouse. Shortly thereafter, Postmus hired Aleman to work on his staff as supervisor. They grew very close, and travelled together to Palm Beach, Chicago, Seattle, China, and Washington, D.C., sometimes staying in the same hotel room.
Aleman possessed absolutely no experience or expertise with regard to assessing property. After fewer than four months on the job, it was revealed that he was spending several hours a day engaged in partisan political activity relating to the Republican Party, including surveying the California political landscape for future candidates for office and making postings to Republican Party blogs. Later, with the approaching California 2008 Presidential Primary Election, then held in March, Aleman and Postmus spent three, four, five or six hours a day involved with the Mitt Romney campaign at Romney headquarters in Rancho Cucamonga, substantially or completely neglecting their official duties in the assessor’s office. In October 2007, the relationship between Postmus and Erwin soured. According to Postmus, the difference came about because he refused to help Erwin in his support of then-San Bernardino City Councilman Neil Derry in his electoral bid against incumbent Third District supervisor Dennis Hansberger in the 2008 election. According to Erwin, they parted ways because he had grown alarmed over Postmus’ political activity in the office. That month, he departed, provided with a $60,000 severance.
Shortly thereafter, heavy scrutiny was being vectored at the assessor’s office and in 2008, the first domino in Postmus’ political dynasty began to topple. When district attorney’s investigators came into Postmus’ office armed with a search warrant to look at the department’s computers in April of that year, Aleman panicked and right on the spot sought to destroy the hard drive in his county issued laptop computer, rendering the computer inoperable. When he was summoned before the grand jury shortly thereafter, Aleman told one lie after another, each seemingly more elaborate than the last. By June, the grand jury and investigators with the district attorney’s office had fairly established that Aleman had been engaging in activity from his perch in the assessor’s office that had nothing to do with the function of assessing property, had been using government property for purposes unrelated to his official function, had backdated or otherwise falsified several public documents, destroyed county property and engaged in perjury during his testimony before the grand jury. He was arrested at the assessor’s office on June 30, 2008 and charged with falsifying public documents, submitting those documents to the grand jury, perjury, lying to investigators and destroying county property.
Postmus, who had been sinking further into a morass of drug addiction in the previous months, would be completely undone by his boyfriend’s arrest. A few weeks later he disappeared entirely, going on a methamphetamine bender until he was located by friends and family, who shipped him off to Idaho and then placed him into a drug rehab facility. Meanwhile, Aleman was isolated and out of reach. He began a dialogue with prosecutors and investigators in the district attorney’s office in an effort to broker a plea arrangement. During these exchanges, item after item relating to Postmus and his depredations in office emerged. Aleman’s disclosures were omnidirectional, implicating not just Postmus but other members of his political circle and office. He disclosed that Postmus had a penchant for hiring young men such as himself, ones in their early to mid-20s with whom he was sexually active, such as Jonathan Stucker and Greg Eyler. He related details of Postmus’ drug use and told investigators about the episode of intimidation and extortion in 2006, when threats of revealing Postmus’ homosexuality and drug use were made, claiming Erwin was involved. He intimated that Postmus was enmeshed in land deals and real estate speculation, perhaps using his power as assessor to cut taxes for those he was dealing with.
In early August 2008, Postmus, who had already been absent from San Bernardino County for a month, entered a rehab clinic out of the state. By that point, his extended absence had been widely noted and there were references in the press about his disappearance, together with references to drug use. By September the board of supervisors had weighed in on the growing controversy, and a terse statement was made on Postmus’ behalf to the effect that he had taken a “medical leave” When he at last returned to the county and came before the board of supervisors in October, he provided a cover story to the effect that he had been undergoing treatment to overcome a problem he had developed with painkillers he had been taking because of a back injury.
In the district attorney’s office, investigators knew at once the story about the use of painkillers was a fabrication and that Postmus’ drug of choice was methamphetamine. From that point on, things would only grow worse for Postmus. The grand jury inquiry and the Aleman matter had revealed the degree to which the assessor’s office under Postmus was being used for political purposes and the board of supervisors in December 2008 began exploring the possibility of removing him from office. At the first board of supervisors meeting in January 2009, Postmus made the bold move of coming before the board, acknowledging that he had fallen pray to the “scourge of drug addiction” but had overcome that demon and was committed to living up to the mandate the voters had given to him, while saying he would not seek reelection. At the end of the month, though, Postmus’ world unraveled utterly when investigators with the district attorney’s office, yet pursuing reports of the abuse of the assessor’s office’s authority, served a search warrant at his home in Rancho Cucamonga, finding methamphetamine and ecstasy and drug paraphernalia, including syringes containing methamphetamine.
A month later Postmus resigned as assessor. In late March 2009, Erwin, who had been hired as Neil Derry’s chief of staff after Derry defeated supervisor Dennis Hansberger in the 2008 election, was arrested and charged with failure to report income on his income and economic interest disclosure documents when he was assistant assessor relating to money he was paid by Burum for his work with regard to the Colonies lawsuit settlement effort. Later that year, in May, Rancho Cucamonga Councilman Rex Gutierrez, who had been hired By Postmus to work as government liaison in the assessor’s office at the behest of Burum in March 2007 and remained on the county payroll until December 2008, was arrested and charged with one count of misappropriation of public funds and one count of grand theft.
In February 2010, the California Attorney General’s Office and the San Bernardino County District Attorney’s Office charged Bill Postmus and Jim Erwin with participation in a conspiracy, bribery and extortion scheme relating to the November 2006 board vote to make the $102 million payout to settle the Colonies lawsuit. The complaint against Postmus and Erwin, while limiting the criminal charges to them, gave a description of a host of overt criminal acts involving Postmus, Erwin, Jeff Burum and Dan Richards, Colonies media consultant Patrick O’Reilly, county Fourth District chief of staff Mark Kirk, and Paul Biane or a combination thereof. Burum, Richards, O’Reilly, Kirk and Biane were not identified by name in the criminal complaint but rather as John Does one through five, respectively.
According to that complaint, “On or between January 1, 2005, and November 29, 2006, John Doe #1 and John Doe #2 [Richards and Burum] attempted to corruptly influence members of the board of supervisors through a combination of threats, extortion, inducements, and bribery in order to secure their vote in favor of a settlement. Defendant Erwin and John Doe #3 [O’Reilly] joined the conspiracy and both conveyed various threats and/or inducements from John Doe #1 and John Doe #2 [Burum and Richards] to Defendant Postmus, John Doe #4 [Kirk] and John Doe #5 [Biane]. John Doe #4 [Kirk] agreed to accept a bribe to deliver the vote of Ovitt. Defendant Postmus and John Doe #5 joined the conspiracy by agreeing to accept a bribe to vote to approve the Colonies settlement.”
Both Postmus and Erwin pleaded not guilty to those charges but the following year, in March 2011, Postmus pleaded guilty to 14 charges against him and turned state’s evidence. He then testified in April before a grand jury, which on May 9, 2011 handed down a 29-count indictment that superseded the charges filed against Postmus and Erwin and renamed Erwin and indicted Burum, Biane and Kirk. The 29-count indictment alleges Burum with the assistance of Erwin first threatened and coerced Postmus and 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 Kirk, in the form of donations to political action committees the three set up and controlled. Burum is alleged to have bribed Kirk to have him convince his then-boss, Supervisor Ovitt, to support the settlement.
Neither Richards nor O’Reilly was charged in the indictment.
There have been interminable delays in bringing the case to trial. After the 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 de-murrers, 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.
After a year-long delay, the Supreme Court reinstated the charges and sent the matter back to the trial court, where it is being heard by Judge Michael Smith. In the intervening two years there have been further appeals but the case is now scheduled to go before a jury early next year with opening statements scheduled for January 4.
Since 2011, Burum’s attorney, former federal judge Stephen Larson, has whittled away at the prosecutions case.
In the summer of 2014, Larson convinced Judge Michael Smith to dismiss a very important component of the case – the conspiracy charges – on statute of limitations grounds, rejecting the prosecution’s theory that a four-year rather than a three-year deadline on bringing a conspiracy charge involving governmental officials should apply.
The prosecution appealed that to the Fourth District Appellate Court, which rejected it. That decision was then appealed to the California Supreme Court, which denied the petition by prosecutors to reverse the lower courts.
The conspiracy component lies at the heart of the case, upon which the primary narrative propounded by prosecutors is hinged, including 43 overt acts. This conspiracy allegation represents the gravitas of the case, in particular that pertaining to Burum, considered the key defendant in the entire matter as he is the prime mover in all of the criminal action alleged.
Smith has upheld the lion’s share of the remaining charges and he denied a motion by the defense to dismiss the indictment on grounds prosecutors withheld exculpatory evidence from the grand jury.
This tack by Larson and the other defense attorneys for Erwin, Biane and Kirk – Raj Maline, Mark McDonald and Peter Scalisi, respectively, signals a good portion of what the defense will consist of.
The grand jury was induced to indict Burum, Erwin, Biane and Kirk based upon the testimony of Postmus and other witness, among them county counsel Ruth Stringer and deputy county counsel Mitch Norton. County counsel is the county’s stable of in-house attorneys. County counsel worked with the Kristovich and Watford law firm and its successor, Jones Day, in crafting the county’s defense against the lawsuit over flood control issues brought by the Colonies Partners. When Stringer and Norton testified before the grand jury, they responded to questions indicating that they believed the $102 million settlement was excessive and unreasonable. In court papers in which he tried to persuade Judge Michael Smith to dismiss the indictment, Larson pointed out that prosecutors made a highly selective presentation of evidence relating to the lawsuit and the settlement calculated to persuade the grand jurors of Burum’s guilt. The prosecutors failed, Larson maintained, to ask questions of Norton and Stringer to demonstrate that after the county entered into the settlement, Norton and Stringer made court filings and other statements in the effort to recover money from the county’s insurer in which they asserted the $102 million settlement was a reasonable one. Further, Larson asserted, there were email exchanges between former Deputy California Attorney General Gary Schons and Stringer and Norton that dealt with issues that threw into doubt the validity of the charges against Burum, but the prosecution destroyed those emails. Larson’s argument was essentially that the failure of the prosecutors to inform the grand jurors of evidence that contradicted their narrative of Burum’s guilt was de facto withholding of evidence, tantamount to the presentation of false testimony. Smith, while expressing a level of discomfort with the prosecutors not eliciting from Norton and Stringer testimony with regard to how they had shifted their position once they were focused on recovering the county money, ruled this did not rise to the level of actual prosecutorial misconduct, and he did not dismiss the indictment.
At trial, it is anticipated that Larson will call Stringer and Norton as witnesses and ask the questions he says the prosecution failed to ask in front of the grand jury, while confronting them with the court filings they made which asserted there were grounds to settle the case on the terms approved in the November 2006 vote by Postmus, Biane and Ovitt.
The prosecution has not disputed that the emails between Schons and Stringer and Norton existed or that they contain potentially exculpatory information, but the California Attorney General’s Office indicated that it has a 90-day policy for retaining emails until they are automatically destroyed. If Larson is able to dig through cyberspace and recover those emails and produce them to the jury for perusal, this could have a major bearing on the trial outcome.
The prosecution maintains the settlement was tainted by extortion, bribery, kickbacks, fraud and graft. The defense has propounded a theory of innocence based on the assertion that the $102 million payout was justifiable on civil and procedural grounds. Larson is pursuing a theory that the $102 million settlement Biane, Postmus and Ovitt approved in November 2006 ending the litigation between the county and the Colonies Partners was one that was justified on the merits all the way around. Larson is prepared to elicit testimony from expert witnesses and other documentation to show that the damage to the Colonies Partners from the vectoring of water from the 20th Street Storm Drain and its interruption of the development and sale of residential properties in the subdivision resulted in a loss far greater than $102 million and as high as $330 million.
Judge Smith, while allowing Larson to posit that the basis for the Colonies Partners suit and the resultant settlement were valid or at least potentially valid, has nevertheless consistently ruled that offering any form of monetary inducement to public officials to influence their decision-making process is tantamount to bribery, even if the decision sought is a correct or legally justifiable one in other respects.
Crucial to the case is Bill Postmus, a true wild card who embodies a danger to both the prosecution and the defense. Since the indictment has been handed down, it has been revealed that Postmus continued to use methamphetamine. During an interview with the FBI in October 2011, six months after his testimony before the grand jury, Postmus indicated that he was still using drugs around the time he was before the grand jury. That contradicted his testimony before the grand jury that he had last used drugs in July 2010 and that he had been abstinent for nine months running at that time. He also told the FBI that there had been no explicit quid pro quo ahead of time with Burum relating to the $100,000 in donations to his political action committees in exchange for his vote to approve the settlement. It is anticipated that the defense will make much of Postmus’ drug use, and the reliability of his word and memory. If Larson, Maline, McDonald and Scalisi can convince the jury that his drug use has rendered him entirely unreliable, doubt about his version of events might be inflated into reasonable doubt about the validity of the prosecution’s case.
Still the same, Postmus represents a major liability for the defendants, in particular Burum and Erwin. Before the grand jury, Postmus testified he voted for the settlement because Burum made promises to support him financially for life and because of threats to expose his methamphetamine addiction and his homosexuality if he didn’t support the settlement. He said Erwin acted as an intermediary for Burum in making those extortionary threats. In his interview with the FBI, Postmus said threats to reveal his homosexuality had emanated from the sheriff’s deputies union, which Erwin headed, even before the Colonies settlement talks, when the sheriff’s union was seeking better contract terms with the county.
More to the point, Postmus embodied the ethos of pay-to-play politics during his tenure in office and the sheer magnitude of the political donations the Colonies Partners provided to enable him is something that will undoubtedly register with the jury.
Jeff Burum is considered by prosecutors to be the linchpin or “big fish” in the case, around whom the other defendants revolve. Nevertheless, this focus on Burum has the potential of being highly problematic for the prosecution. Burum was accompanied in virtually all of his action by his co-managing principal in the Colonies Partners, Dan Richards. Indeed, Richards’ role, as the mastermind behind the development proposal and as the architect of the plan to grease the political skids for the project’s approval and the settlement of the lawsuit puts him as close to the center of the matter as Burum, if not more. Both Burum and Richards signed the checks that went to the political action committees Postmus, Biane, Burum and Kirk controlled and which were considered bribes. Richards, with Burum, put up the money to hire a private investigator to dig up derogatory information on Postmus and Biane before the settlement was made. Richards, with Burum, paid for O’Reilly’s services in authoring and creating the hit pieces relating to Postmus and Biane that were ultimately held back during the 2006 electoral season. And in the 2010 criminal filing against Postmus and Erwin, Richards was one of the unnamed John Does described as an uncharged coconspirator in the series of overt acts that made up that criminal complaint. Should Larson be so bold, he can make a strong case that the prosecution has selectively targeted his client while ignoring the action of his older and more politically savvy and connected partner.
Similarly, there is an issue of selective prosecution in the case against Mark Kirk, Gary Ovitt’s chief of staff. Early on, investigators with the district attorney’s office were focusing on both Kirk and Biane’s chief of staff, Matt Brown. Like Kirk, Brown had set up the political action committee into which the $100,000 contribution from the Colonies Partners intended for Biane was deposited. Indeed, Brown had created a multiplicity of political action committees, some of which received money from the Colonies Partners, although in lesser amounts than $100,000. Thus Brown actually received more money from the Colonies Partners than did Kirk. Brown, however, at some point turned on his boss, Biane, and agreed to wear a “wire,” i.e., a hidden recording device, to his workplace and engage in conversations with Biane in an effort to capture a recording of Biane making incriminating statements or some order of an admission of criminality. Brown was unable to coax such a statement from Biane. When investigators with the district attorney’s office approached Kirk with a similar proposal to get him to secretly record Ovitt, Kirk refused. One interpretation of this is that district attorney’s office investigators were able to convince Brown that he was himself vulnerable to prosecution, and that he agreed to cooperate with them as part of an arrangement to avoid prosecution. That Kirk turned down such an offer suggests that he did not feel he was guilty. Moreover, prosecutors have alleged that Kirk was provided with the $100,000 by Burum in exchange for convincing Ovitt to support the settlement. Ovitt, however, has repeatedly and consistently stated that he came to a decision on his own to join with Postmus and Biane in settling the litigation.
Of some note is that San Bernardino County District Attorney Mike Ramos is on the defense witness list. This potentially augers Larson returning to ground he explored during his most spectacular legal performance in the case – his having convinced Judge Smith to dismiss the conspiracy charges on statute of limitations grounds. The prosecution team is cognizant that Larson was able to do so because Ramos was himself beholden to Richards and Burum for bankrolling his initial campaign for district attorney and consequently pulled his prosecutorial punches very early on when he deliberately temporized in initiating an investigation of the Colonies settlement because he was seeking to protect both of these major benefactors.
In inveighing against the indictment in court papers, Larson seized upon tortured language that the lead prosecutor in the case – Supervising Deputy California Attorney General Melissa Mandel – used in the indictment in which she charged Burum not with bribing Postmus, Biane and Kirk but rather with facilitating the reception of a bribe. This was, Larson argued, “an impermissible charging scheme” that “ignores the legislative history and judicial interpretations.”
It also conveyed what Mandel and Larson both understood but have not yet dealt with directly – that if the theory that Burum essentially bribed Postmus, Biane and Kirk by giving them political donations holds up, then an equally strong case or even stronger – can be made that Burum, along with Richards, bribed Ramos. In this way, the district attorney’s reception of $10,000 originating with the Colonies Partners and which was double-laundered through the Safety Employees Benefit Association and Ramos’s wife Gretchen is tantamount to a bribe if not an out and out payoff. It was made during the crucial year of 2008, a time in which suspicions relating to the Colonies lawsuit settlement were being openly circulated among county residents and when the filing of charges including a conspiracy element were yet viable and had not yet fallen beyond the statute of limitations. It was that delay on Ramos’ part in taking up the case that led to the “impermissible charging scheme” relied upon in the indictment.
It is an open question at this point as to whether Larson is willing to make a riverboat gamble by calling the district attorney to the witness stand and pressing him into an explanation of how the Colonies Partners making political donations to the electioneering accounts of two members of the board of supervisors after they made a vote in the company’s favor differs from his receiving money that originated with the Colonies Partners that ultimately went into his personal bank account after being laundered through his electioneering fund in return for his delaying action on the case against one of that company’s co-managing partners and taking no action at all against the company’s other co-managing partner.
During the legal sparring that has occurred over the past five plus years, Larson has bloodied the prosecution’s nose time and again through a focus on the prosecution’s withholding, mishandling and mischaracterization of evidence. In so doing, Larson precipitated a falling out between two of the members of the prosecution team, former assistant district attorney James Hackleman, who was still involved in the case for a time even though he had retired, and deputy district attorney Lewis Cope, when Cope learned of evidence that Hackleman knew about but kept hidden, not only from the defense but apparently from Cope. Hackleman is no longer involved in preparations for the case. Larson, in the dramatic forum of a trial, may have opportunities to drive further wedges between members of the prosecution team.
Biane’s attorney, Mark McDonald plans to wage his defense of Biane without putting him on the stand. It is not yet clear whether the other defendants will testify.
Two juries have been impaneled for the trial – one for Erwin and the other for his three codefendants. That arrangement has been made because the prosecution wants to use statements Erwin made as evidence against his codefendants but cannot use them against him because of his Fifth Amendment guarantee against self-incrimination.
Opening statements in the trial are scheduled for January 4.