By Gail Fry and Mark Gutglueck
The City of Adelanto’s professional entanglement with a figure linked with the Postmus/Mitzelfelt political corruption scandal of the previous decade has resulted in a group of city residents retaining a Los Angeles law firm to carry out an investigation into the city’s contractual practices and the diverting of taxpayer funds toward activities represented as aimed at economic development but which have yet to register any return on that investment.
Jessie Flores was a political hanger-on who was given a paying position with the First Supervisorial District office late in the tenure of Bill Postmus and remained in place after Postmus acceded to the position of county assessor and was succeeded in 2007 as supervisor by his hand-picked replacement, Brad Mitzelfelt. Mitzelfelt had served as Postmus’s chief of staff for all six of the years he was supervisor.
A little more than two years after Postmus moved into the assessor’s office, he would be driven in disgrace from his perch as one of San Bernardino County’s most powerful politicians and would thereafter be charged with 14 separate felony counts relating to acts of corruption in public office, all of which he would eventually plead guilty to.
Cash cows Postmus and members of his political machine had gone to for the mother’s milk of politics and to enrich themselves throughout his political ascendency were charter schools. Charter schools are entities created by a particular form of public asset privatization in which an alternative education venue is established using government funding but operating with the sponsorship of, and independently from, an existing public school system.
In the very early stages of Postmus’s political career, Postmus and Mitzelfelt established a symbiotic relationship with Charles Steven Cox, who founded the California Charter Academy. They pulled political strings to get the board of the Snowline Joint Unified School District, which exists in the High Desert communities of Phelan and Pinon Hills, to sponsor, or charter, the academy.
Cox then utilized the enthusiasm garnered from that formation to get Snowline to charter another academy. Cox also obtained two more charter sponsorships, one from the Orange School District in Orange County, and one from the Oro Grande School District, located in San Bernardino County’s High Desert. As the head of four charter schools operating on 34 far-flung campuses with some as far away as the San Joaquin Valley, Cox then had a significant amount of money rolling in. He diverted a substantial portion of that money away from educational related activities, using some of it to reward Postmus and Mitzelfelt for their help in greasing the political skids to get the charter academy going. Postmus, his cronies, political associates, friends and family were given consultancies or paying positions with the charter academy, often ones that entailed no work nor the provision of any valuable or educational related services. In addition, Cox used income he realized from the California Charter Academy venture to make hefty political contributions to Postmus.
Simultaneous to his founding of the non-profit California Charter Academy, Cox created Educational Administrative Services Corporation, a for-profit company which was then hired by all four charter schools to manage the day-to-day operations of the charter schools and provide academic supplies such as books, paper, pens, pencils, desks, chairs, projectors, computers, etc. The rates charged by Educational Administrative Services Corporation reflected in the billings were inflated. In some cases, educational materials that were paid for by the charter schools were never delivered.
Cox hired Tad Honeycutt, a Postmus political ally who later successfully ran for a position on the Hesperia City Council, to work with the California Charter Academy. In turn, Honeycutt created his own set of companies, Maniaque Enterprises and Everything For Schools, which like Educational Administrative Services Corporation delivered educational materials and services to the non-profit charter schools at a profit.
By 2003, teachers at several of the schools were going public with accounts of how students’ educations were being neglected and books and other educational materials were not being provided. In 2004, the superintendent of the California Department of Education, Jack O’Connell, suspecting financial irregularities, launched an investigative audit into California Charter Academy. In August 2004, four years after California Charter Academy’s creation, it ceased operations abruptly, throwing teachers out of work and forcing students to hurriedly matriculate back into public schools, which were overburdened by the influx of unexpected numbers of students. The California Charter Academy’s records and books were in utter chaos. Student transcripts requested by the sponsoring districts were found to be incomplete or entirely unavailable. The California Charter Academy’s creditors and landlords in many cases made off with the academy’s assets.
On April 14, 2005, MGT of America, an auditing firm hired by the California Department of Education, and the state’s Fiscal Crisis and Management Team released their joint financial audit of California Charter Academy, showing $23 million in taxpayer money paid to the private management companies Educational Administrative Services Corporation, Maniaque Enterprises and Everything For Schools was misappropriated. Among the findings were that Cox had hired several of his family members into what were essentially do-nothing clerical and non-productive administrative positions, that Cox, his family members, other Educational Administrative Services Corporation and Charter Academy employees, and Honeycutt were provided with luxury automobiles, and that among the expenses accumulated by the Charter Academy were accommodations in Las Vegas, at Disneyland and the Disneyland Hotel, studio musical recording equipment, spa visits, fishing trips and jet skis.
The audit alleged multiple conflict-of-interest violations, the improper conversion of private schools to public charter schools, and the falsification of documents and claims to receive public funds
“The magnitude of waste of precious education funds outlined in the audit was appalling,” said O’Connell.
In late July 2007, a grand jury was impaneled and began inquiries into the California Charter Academy’s operations. On September 4, 2007, Honeycutt and Cox were arrested after being indicted by that special grand jury for their alleged roles in the collapse of the California Charter Academy. Cox and Honeycutt were indicted on a total of 117 counts, including fraud, misappropriation of public funds and grand theft. Cox’s bail was set at $1 million dollars, while Honeycutt’s was logged at $500,000. Both were able to post bail. Law enforcement officials froze their assets, but little of the missing money that officials thought might be recovered was present in their accounts in local banking institutions. It is known that Honeycutt had made multiple trips to Vanuatu, Spain and Argentina in the early and mid-2000s. A series of delays have postponed the trial against Honecutt and Cox for nearly ten years. The matter is not likely to go to trial, officials say, until the ten-year anniversary of the filing of charges against Cox and Honeycutt is eclipsed.
In the aftermath of the indictment of Cox and Honeycutt, the Postmus Political Machine was chastened and it hunkered down, but only momentarily. The same coterie of individuals, including Cox, working as a quiet advisor functioning from the shadows, put together another charter proposal, this time selling the idea to the Adelanto School District. Participating in the free-for-all were Cox; Postmus; Mitzelfelt; Dino DeFazio, a friend of Postmus and the owner of D & D Real Estate and other real estate businesses, including Tri-Land, Inc, in which he is a partner with Postmus; Jessie Flores, a former field representative for Postmus and a then-field representative for then-San Bernardino County Supervisor Brad Mitzelfelt; Adam Aleman, who was formerly one of Postmus’s field representatives and later one of Postmus’s assistant assessors, occupying the third highest ranking position in that office despite his relative youth, 23 years, and lack of experience, until he was arrested and then convicted by a plea admission that precipitated Postmus’ subsequent arrest, removal from office and conviction; Hesperia Unified School District Trustee Anthony Riley, a Postmus political ally; Sentry Home Loans owner and Boys and Girls Club President Helene Harris and her husband Hendon Harris; Mitchel E. Pullman, a principal in Arrowhead Properties, IV, LLC; and Peggy Baker, Charles Steven Cox’s sister-in-law.
After Cox prepared the articles of incorporation, the Adelanto Charter Academy was chartered by the Adelanto School District on August 19, 2009. Functioning on a model not very different from that used by the California Charter Academy but on a less grand scale, Cox, Postmus, Mitzelfelt, DeFazio, Flores, Aleman, the Harrises, Pullman and Baker utilized the position of trust they had been vouchsafed to funnel money to themselves or the companies they controlled. In the roughly 15 months the academy was running without any oversight, they managed to loot the operation of a little more than $2 million that should otherwise have gone toward the education of students but instead was diverted to activities, purchases and disbursements having no conceivable academic application. In November 2010, an audit cataloging significant shortcomings in the school’s operations was released, and on May 17, 2011, the Adelanto School District revoked the charter it had granted to the Adelanto Charter Academy. The Adelanto Charter Academy immediately appealed the decision to the San Bernardino County Superintendent of Schools, who upheld the Adelanto School District’s decision on August 1, 2011. The Adelanto Charter Academy appealed the decision to the California Department of Education and continued to operate until notified on April 17, 2012, that “your administrative remedies are exhausted” and “any further appeal of revocation must be sought in a court of local jurisdiction.”
Recognizing that moving the matter into such a forum might well lead to further indictments, those behind the operation threw in the towel, having diverted somewhere in the neighborhood of $3.1 million to their own pockets and bank accounts.
While everyone involved had a hand in the till, a cataloging of Flores’ activities therein has recently become of public interest.
Jessie Flores’ 700 forms filed in March 2008 and April 2009 showed him as the owner of Greater High Desert Lawncare Services, Diamond Limousine, and receiving income from D & D Real Estate, owned by Dino DeFazio. Jessie Flores’ 700 forms filed in April 2010 show him owning Diamond Limousines and receiving income from D & D.
Jessie Flores’ 700 forms for 2011 and 2012 indicate only his salary for his position as field representative for San Bernardino County Supervisor Brad Mitzelfelt.
The Adelanto Charter Academy paid $35,000 during 2010 in loan payments to Kardi Homes, a limited liability company owned by Dino DeFazio.
According to reliable information, Greater High Desert Lawncare Services did all of the landscaping for properties owned by Helene Harris (the president of Boys and Girls Club of Victor Valley and an Adelanto Charter Academy board member), including upkeep of the Adelanto Charter Academy campus, which Harris leased to the academy. Greater High Desert Lawncare Services is shown as a source of income to Flores on his 2009 and 2010 700 forms, which are statements of economic interests his position as a government employee required.
There was no record of Greater High Desert Lawncare Services either under the fictitious business name registry at the San Bernardino County Recorder’s Office or at the California Secretary of State website.
Diamond Limousines billed Adelanto Charter Academy for the use of its limousines. The Adelanto Charter Academy paid those bills.
According to statements from those knowledgeable of the academy’s operations, Flores initially represented that the academy would not have to pay rent to hold classes at the Boys and Girls Club of the Victor Valley. Ultimately, however, the academy made rent and utility payments totaling $33,560 for 13 months for 1,500 square feet of space the Boys and Girls Club, averaging $2,582 a month and $.58 per square foot for space in the city of Adelanto, a depressed area where at that time lower lease rates were available.
The Adelanto Charter Academy contracted with Professional Charter Management, Inc. to have the latter perform administrative services in return for 15 percent of all Adelanto Charter Academy revenues.
According to the California Secretary of State, Professional Charter Management, Inc. is a dissolved corporation with Jessie Flores as its chief executive officer and Dino DeFazio in the capacities of chief financial officer and secretary and Kari Murdock as agent for service of process. Kari Murdock is the the niece of Charles Steven Cox.
On December 14, 2010, Jessie Flores filed a certificate of dissolution stating, “The corporation has not conducted any business from the time of the filing of the articles of incorporation with the Secretary of State” and “The corporation acquired no known assets.” Jessie Flores signed the form under penalty of perjury.
An email from C. Steven Cox addressed to Postmus, DeFazio and Jessie Flores, with the subject “Invoice from Professional Charter Management, Inc.” dated January 19, 2010, contained an attached invoice for “administrative service fees” for $11,965.65.
Records provided by the Adelanto Charter Academy before its demise show Professional Charter Management, Inc. was paid $11,965.65 on January 21, 2010, a month and a week after it was dissolved.
According to records obtained by the Sentinel, the Adelanto Charter Academy contracted with Educational Development, Inc. to perform administrative services in return for 5 percent of all Adelanto Charter Academy income from September 1, 2009 until June 30, 2014. It is not clear whether or how the administrative activities carried out by Educational Development, Inc. either meshed, or conflicted, with the administrative services provided by Professional Charter Management, Inc.
In 2014, following Adelanto Planning Commission Chairwoman Lori Yuan’s forced resignation from the planning commission, Jessie Flores was appointed as her replacement. He served on the commission until just before his hiring by the city as an economic development consultant last year.
While Flores and city officials responsible for retaining him as a consultant had hoped memory of his participation in the plundering of the Adelanto Charter Academy would have faded, it has not, at least with some.
A collection of Adelanto residents has retained the Los Angeles-based Sutton Law Firm to carry out a broad-based investigation of Flores’ retention by the city.
Saying he was working on behalf of “interested Adelanto residents, businesses, and city and community leaders,” one of the Sutton Law Firm’s attorneys, Bradley Hertz, has now made three requests under the California Public Records Act seeking city documents pertaining to Flores’ ongoing and previous employment, invoices he has submitted, detailing of work performed, payments made, reimbursements, emails, and hours worked.
Hertz told the Sentinel, “Our investigation stems from ongoing concerns – from residents, businesses, and Adelanto city personnel – who are of the view that Jessie Flores’ business practices are exposing the City of Adelanto to liability. It is of substantial concern that the city would hire a consultant who is associated with indicted former County Supervisor Bill Postmus and the Adelanto Charter Academy scandal.”
Continuing, Hertz said, “It is not clear what qualifications Mr. Flores has to hold the important position of the city’s economic development manager, especially given his many financial hardships. However, apparently Mr. Flores sees financial opportunity in focusing his efforts on a city that has embraced marijuana cultivators and their projects.”
Hertz’ last reference was to the city’s November 2015 passage of an ordinance allowing the operation of licensed cannabis growing greenhouses within the Adelanto Industrial Park.
Flores has said he merits the position he holds because he has proven instrumental in establishing the Adelanto Grand Prix and Adelanto Rodeo events and attracting the semi-professional baseball team, the High Desert Yardbirds of the Pecos League, to fill the gap created by the city having terminated the arrangement it had with the California League’s High Desert Mavericks who for 25 years used Stater Bros. Stadium as that team’s home field.
Hertz said, “According to my clients, Mr. Flores lacks professionalism by taking false credit for attracting the Rodeo, Grand Prix, and Yardbirds, given that the Victorville Fair Grounds has a contract with the city to oversee event management of the stadium and that the fair grounds staff has spent hundreds of hours attracting and preparing for these events to generate much-needed revenue for the city; it is disgraceful for Mr. Flores to claim credit when he is not deserving of it.”
Given the recent contretemps with regard to Flores, no city official was willing to offer the rationale for his hiring.
By Gail Fry and Mark Gutglueck