Brett Granlund

By Mark Gutglueck
The Colonies Lawsuit Settlement Public Corruption Prosecution continued into its third week, with prosecutor Lewis Cope presenting elements at the center of the allegations against the four remaining defendants, tempered by defense attorneys for all four making a concerted and withering assault on the credibility, knowledge and moral authority of the prosecution’s first witness. The week closed with testimony from a second witness who outlined a key element of the prosecution’s contention that Rancho Cucamonga-based developer Jeff Burum, with the assistance of former sheriff’s deputies union president Jim Erwin, intimidated, extorted and blackmailed two former members of the county board of supervisors, Bill Postmus and Paul Biane, to support settling for $102 million in 2006 a lawsuit brought against the county by Burum’s company. Thereafter, the prosecution alleges, Burum delivered kickbacks of $100,000 each to Postmus and Biane.
In 2011, Burum and Erwin, along with Biane and Mark Kirk, who was at that time the chief of staff to then-Fourth District County Supervisor Gary Ovitt, were indicted, and charged with participting in an elaborate extortion and bribery scheme relating to settling the Colonies Partners’ 2002 lawsuit against the county over drainage issues at the Colonies at San Antonio residential and Colonies Crossroads commercial subdivisions in northeast Upland on terms that were favorable to the plaintiffs. Burum was with Dan Richards a co-managing principal in the 23-member Colonies Partners development consortium, which built the project on land formerly used for water drainage and local aquifer recharge. The developers’ move to develop the property and the county’s desire to continue to use it for its historic water diversion purposes led to the lawsuit that created the circumstances prosecutors now say entailed extortion and bribery.
The extortion, prosecutors alleged, consisted of Burum’s hiring of private investigators to accumulate derogatory information on Postmus, who in 2006 was then the chairman of the board of supervisors and the chairman of the San Bernardino County Republican Central Committee and running for county assessor, and on Biane, who at that time was vice chairman of the county board of supervisors and vice chairman of the San Bernardino County Republican Central Committee and sponsoring a countywide measure to raise supervisors’ pay from $99,000 per year to $151,000 per year. Prosecutors allege Burum conveyed a threat through Erwin to reveal that information, pertaining to Postmus’ drug use and homosexuality and Biane’s bisexuality and precarious financial circumstance, to the county’s voters by means of a mass mailing campaign. Ultimately, Burum withheld those mailers, prosecutors say, and three weeks after the November 2006 election, Postmus, Biane and Ovitt voted to confer the $102 million settlement on the Colonies Partners in a 3-2 vote, with then-supervisor Dennis Hansberger and supervisor Josie Gonzalez dissenting. Over the first six months of 2007, Burum and Richards then provided Postmus, Biane, Erwin and Kirk each with $100,000 in donations to political action committees they controlled, which, in the case of Postmus, Biane and Kirk, prosecutors maintain, were bribes or kickbacks for supporting the settlement, and in the case of Erwin, a reward for helping Burum perpetrate the extortion. Prosecutors allege Kirk was bribed in return for having delivered Ovitt’s vote in favor of the settlement.
Fifteen months prior to the indictment, Postmus and Erwin had been criminally charged in the matter, at which time they both pled not guilty. In March 2011, however, Postmus pleaded guilty to all ten felony charges pending against him in the Colonies criminal matter, four felony charges relating to the improper use of his authority as assessor and a single misdemeanor narcotics offense, and agreed to turn state’s evidence against Erwin, Burum, Biane and Kirk in exchange for the dismissal of some of the charges against him and the promise of lenient sentencing. The charges in the indictment against Erwin superseded the earlier criminal charges.
All four of the remaining defendants are maintaining their innocence.
This week, deputy district attorney R. Lewis Cope continued with his examination of Dennis Hansberger, one of the two members of the board of supervisors in 2006 who opposed the settlement with the Colonies Partners.
Hansberger was a member of the board which ultimately oversaw and approved the county’s legal defense, which was put forth by the county’s in-house attorneys, known as county counsel, and over the course of the lawsuit by two outside law firms, Munger, Tolles and Olsen and Jones Day. He also had personal private industry experience which involved rock, gravel and sand mining operations. For this reason, Cope considers Hansberger a powerful witness for the prosecution. He was able to testify to the progression of events that led up to the dispute over who was responsible for paying for flood control improvements at Colonies’ 434-acre property, which had previously existed as a rock, gravel and sand mining operation and upon which flood control easements were recorded in 1933, 1934 and 1939 allowing the county’s flood control division to use it to spread storm water runoff from the mountains north of it. He was able to offer his conclusion, based on his professional knowledge, that the land, because it traditionally contained a 31-acre basin that had been converted from a rock quarry, was undevelopable and therefore not worth the amount of money the Colonies Partners claimed it was worth during the litigation.
The Colonies Partners purchased the land from the San Antonio Water Company in 1997, paying $16 million for it. When the State of California, through its department of transportation known as CalTrans undertook to extend the 210 Freeway, it purchased 40 of the Colonies Partners’ acres for $17 million. The City of Upland insisted that the freeway be put in at sub-grade, that is below ground level, resulting in water pooling in the freeway’s traffic lanes during a heavy deluge. At the city’s request, the county’s flood control district constructed the 20th Street storm drain to whisk that pooling water as well as the runoff from an area above the freeway toward a nearby storm channel that had been built by the Army Corps of Engineers in the 1970s to convey water southward to the Prado Dam near Corona. The flood control district’s engineers, relying on the 1933, 1934 and 1939 easements, designed the 20th Street Storm Drain to empty into the basin on the Colonies Partners’ property. That increased the size of the basin from 31 acres to 60.88 acres and this became part of the issue of contention between the Colonies Partners and the county in the lawsuit. While the Colonies Partners maintained that its property was obsolete for flood control purposes because of the advent of the Army Corps of Engineers-built flood control channel near the border of Upland with Rancho Cucamonga, the county maintained that its easements remained in effect and that the basin was needed to hold the storm flow from northern Upland and the freeway while it was being directed to the flood control channel because water could empty into the flood control channel at a maximum rate of 650 cubic feet per second while the actual amount of runoff generated during a heavy rainstorm might reach 3,500 cubic feet per second or thereabouts.
In one of the primary stages of the lawsuit, Judge Peter Norell had entered a ruling favorable to the Colonies Partners that held that the county’s 1933, 1934 and 1939 easements had been “abandoned.” This emboldened the Colonies Partners in their effort to have the county settle the matter so the company could then push on with its developmental agenda and build and sell houses in what was at that time a booming economy. The county, however, appealed Norell’s ruling to the Fourth District Court of Appeals, which ruled that Norell had erred, and that the 1933 easement pertaining to the original 31-acre basin was yet in force and that the matter should be returned to the trial court so the county and the Colonies Partners could work out some accommodation with regard to the use of the additional 29.88 acres the county needed for additional drainage collection on the property. The 1939 easement provided for just such an accommodation, but required that the arrangement for the use of any property beyond the original 31 acres must be done under terms acceptable to the property owner. When the matter returned to San Bernardino Superior Court, the case was transferred from Norell to Judge Christopher Warner, who heard the matter as a bench trial without a jury. Warner ruled that the county, particularly flood control district director Ken Miller, had made misrepresentations with regard to the application of the flood control easements and the extent to which the basin on the Colonies Partners’ property would be enlarged, and he entered an intended statement of decision in which he ruled that the easements had not been abandoned but “extinguished.”
Throughout the course of this legal action, Hansberger testified, Paul Biane, whose Second Supervisorial District encompassed Upland, had initially taken the lead in prompting the board of supervisors to settle the litigation with either a cash payout to the Colonies Partners or by providing the Colonies Partners with some 800 acres of land at the north end of Rancho Cucamonga in addition to some cash. Hansberger noted that the county flood control district had constructed the 20th Street Storm Drain at the request of the City of Upland, which had provided the land use approval for the construction of residential and commercial subdivisions on the Colonies property. That the Colonies property had previously been zoned as open space, taken together with his general knowledge of water law and the circumstances attending the property, Handsberger said, combined with the advice of the county’s attorneys, first Munger, Tolles and Olsen and later Jones Day, to confirm his belief that the Colonies Partners were owed nothing in the lawsuit they had filed against the county.
After Hansberger’s testimony on direct examination by Cope concluded midmorning on Tuesday January 17, Stephen Larson, Burum’s defense attorney, began his cross-examination of Hansberger.
Before initiating his questioning, Larson told Hansberger that he was “not here to embarrass you, but it is important that this jury know the full story.”
Drawing upon his stature as a former assistant U.S. Attorney and federal judge, and aided by his imposing physical presence, resonant baritone voice and intense demeanor, Larson grilled Hansberger, seeming initially to overwhelm him with the speed of his well-planned and methodic questions as Hansberger, adjusting from the more laid-back approach by Cope, found himself seeking to step up the speed of his responses to the staccato of questions vectored at him, but then gradually recovered his composure in the face of Larson’s onslaught. If Larson was indeed seeking to impose on the jury the impression that Hansberger’s slow responses in some fashion denoted a lack of candor or assurance, he doubled down by heightening the effect of folding his arms against his chest after delivering each question and then pacing to and fro behind the attorney’s lectern in a show of impatience with Hansberger’s responses. In addition to this use of body language to suggest impatience or disbelief at Hansberger’s responses, Larson took to interjecting further questions as Hansberger, in either choosing his words carefully or in struggling for an answer, made slow response. This prompted Judge Michael Smith, before whom the case is being heard, to instruct Larson to allow the witness to answer fully before moving on to the next question.
Whether this tactic succeeded in lighting in the jurors’ minds a question about whether Hansberger’s statements were entirely reliable or not, Larson did early on in the questioning succeed in spelling out for the jurors that Hansberger was a prosecution witness, one who was laying out the prosecution’s version of events. To a pointed set of questions that suggested his testimony was being choreographed by the prosecution, Hansberger acknowledged that he had accompanied Cope and the other prosecutor handling the case, Supervising Deputy California Attorney General Melissa Mandell, back to the district attorney’s office after his first day of testimony on the stand last week. When Larson asked him what he had done to prepare for his testimony, Hansberger said he had reviewed some material and documents relating to the case. “I did review some of the grand jury testimony,” Hansberger said. When Larson pressed further, Hansberger acknowledged he had discussed his testimony with the prosecution team, but denied he was being coached. He further acknowledged that he had exchanges with district attorney’s office investigators and that he had not met with defense investigators.
Larson maintained the nearly frenetic pace of questioning until the noon hour break. After the court was back in session at 1:30, the velocity of Larson’s questioning diminished, though its intensity did not.
Larson did not neglect to wring from Hansberger an admission that he had no knowledge with regard to Burum bribing any of the defendants.
Some of Larson’s questions focused on a failed attempt by Postmus and Biane, in the early Spring of 2005 to arrive at a $77.5 million settlement with Burum and Dan Richards, who were assisted by their paid consultant, former state senator Jim Brulte, in a forum outside the presence of attorneys representing either side. That tentative agreement fell apart after the leaking to the press of a memo written by the Munger, Tolles & Olsen attorney representing the county, Paul Watford. In that memo Watford expressed discomfiture with the proposed settlement. Shortly thereafter Munger, Tolles & Olsen resigned as the county’s legal representative in the Colonies matter, necessitating the hiring of Jones Day as a replacement.
Larson raised the issue of the leaking of the memo, which was considered to be a privileged communication. In his questions, Larson noted that both Hansberger and his then-chief of staff, Jim Foster, had been accused by Biane of leaking the memo. Hansberger denied being responsible for the leak.
In this and other ways, Larson suggested to Hansberger that there was “some bad blood between you and Mr. Biane, right?”
“Discomfort and bad blood are way different things,” Hansberger responded, saying he did not hold a grudge against others based upon disagreements over political matters.
Focusing on Hansberger’s previous testimony regarding Biane having met with Burum in an effort to arrive at a settlement outside the rubric of the official court proceedings and the guidance of attorneys, Larson achieved having Hansberger acknowledge that Biane informed his colleagues of those meetings.
“He wasn’t hiding the fact that he met with him, correct?” Larson asked.
“Yes,” Hansberger responded.
Larson then focused on the issue of campaign contributions, moving from general to specific examples, including ones made to Postmus and Biane and Hansberger himself.
“There’s nothing wrong with developers making campaign contributions, right?” Larson asked. Hansberger chose his words carefully in response to that, saying that “They seem distasteful sometimes, but there is nothing illegal about them.”
To Larson’s questioning, Hansberger said Burum had told him, at a breakfast meeting they had at the Ontario Hilton in 2007, about the $100,000 contributions he had made to the political action committees controlled by Erwin, Postmus and Biane.
In that questioning, Larson angled at getting an admission from Hansberger that he had sought a political contribution from Burum himself. Hansberger indicated his inquiry of Burum was less about getting a political contribution from Burum but rather determining to what extent Burum was supporting his opponent, Neil Derry, in the then-upcoming 2008 election for Third District supervisor, and then dissuade him from doing so. Hansberger said Burum told him that he believed that much of the $100,000 he had given Erwin would be put into Derry’s campaign and that he had also provided $100,000 to the sheriff’s deputies union, over which Erwin as the union’s previous president held some sway, but that he, Burum, would not be supporting Derry beyond that. Larson asked if Hansberger had sought a donation from Burum, and Hansberger said he had received a $2,500 donation from Burum.
With regard to political donations he received while he was supervisor for two terms from 1972 to 1980 and again supervisor from 1996 to 2008, Hansberger told Larson he did not know precisely whether they exceeded $1 million or not but that they had been “substantial.”
Larson succeeded in getting Hansberger to testify that Burum had not kept the political action committee donations secret, suggesting that the openness with which they were provided discredited the characterization of them as bribes.
The following day, Wednesday January 18, Larson utilized overhead projections of a number of internal county documents, including one which dealt with a county application to de-license the basin on the Colonies property as a flood control facility, as well as court documents relating to the easements which touched on their continuing applicability and court rulings finding they were no longer in effect. He questioned Hansberger about these and dwelled at length over the degree to which Hansberger familiarized himself with the then-ongoing litigation brought by the Colonies Partners over the flood control issues on the company’s property and the degree to which the county faced setbacks in court. Both Larson and the attorney who later that day cross examined Hansberger, Erwin’s lawyer Raj Maline, made continual reference to Hansberger having consistently voted against the various settlement proposals that came before the board of supervisors while noting that all four of his colleagues at that time had on nearly all of the occasions voted to settle. By the tone of their questions, Larson and Maline implied that Hansberger was being unreasonable and obstinate. Hansberger, however, consistently held his ground. When it was suggested the settlement made sense given the way the litigation was going and the limitations on the scope of the easements, Hansberger said he believed differently. To Maline’s question “You knew [Judge Warner’s] statement of intended decision was pretty bad against the county, right?” Hansberger responded, “I did not find it credible.” He said he did not “believe the City of Upland would give them [the Colonies Partners] permits to build” without the understanding that “open space” on the property would be preserved to accommodate the water that naturally flowed there and which came from the 20th Street Storm Drain, “which the city asked the county to build.”
Hansberger said he did not support the settlement because “the evidence did not support their numbers and no lawyer would put their name on it because the settlement was way off base.” He said that all of the county’s lawyers, in-house and those retained as special counsel, were telling him “’The evidence we have does not support Judge Warner’s decision. We need to go back to the court of appeal.’ I accepted that and the others did not and we went forward [with the settlement.]”
Both Biane’s attorney, Mark McDonald, and Mark Kirk’s Attorney, Peter Scalisi, proved far less aggressive with Hansberger than were Larson and Maline. Mark McDonald, asked Hansberger if he knew anything at all about his client having taken a bribe from Burum.
“No,” said Hansberger.
McDonald asked Hansberger about an appraisal the Colonies Partners obtained delineating their damages in excess of $300 million. Hansberger said he had no recollection of that documentation being provided to him.
“All I recall is a newspaper article saying that’s what they wanted,” Hansberger said.
On Thursday, Cope brought in another formidable witness, former state Assemblyman Brett Granlund, who served in California’s lower legislative house from 1994 until 2000.
Granlund, a Republican like nearly everyone else involved in the case, including defendants and witnesses, was formerly on good terms with the defendants in the case, and was even considered to be a political ally of most of them. He is now a lobbyist with Sacramento-based Platinum Advisors. Among Platinum Advisors’ clients is the County of San Bernardino. Granlund said he was close to Erwin for two decades. Their relationship hit the skids sometime after Erwin was criminally charged in the Colonies case.
Cope elicited from Granlund evidence that could establish that the extortion element of the crime existed. Granlund testified that Jim Erwin told him in 2006 he intended to bring blackmail to bear in getting both Postmus and Biane to effectuate the final settlement of the lawsuit. Granlund said that in the fall of 2006 Erwin said he had “hit pieces,” political mailers bearing derogatory information pertaining to Postmus and Biane, that would be distributed to the county’s voters, if the pair did not approve the settlement between the county and the Colonies Partners. “What I remember him (Erwin) saying was, ‘I can destroy them [Postmus and Biane] personally and politically,’” Granlund said.
Erwin told Granlund that both Postmus and Biane’s rubbish had been taken and pored over. What turned up, Granlund said Erwin told him, was that Biane “was in serious financial trouble [and] near bankruptcy.” Granlund said it was unclear exactly who had gotten access to the two supervisors’ trash. “He said that they had acquired Mr. Biane’s trash from trash collection and gone through it and found numerous items in the trash that would be injurious to Mr. Biane’s reputation,”
Moreover, Granlund said that according to Erwin, Biane was using his county-issued car to travel to his residence in Mexico and taking a flat-screen television from his office across the border. And Erwin represented that he had access to the sheriff’s department’s “red card file,” Granlund said, which contained a field report compiled by a deputy relating to Biane having been encountered in a “compromising position” with another man in a car in the parking lot of Biane’s family’s winery.
That Biane was then sponsoring Measure P, which was a countywide initiative on the 2006 ballot to raise supervisors’ salaries, created a situation in which Erwin could use that information, Granlund indicated. He said Erwin told him funding was available either from Burum or the sheriff’s deputies union to print and distribute the hit piece containing the information about Biane as part of the opposition to Measure P.
The effort to force Biane and Postmus to settle the underlying Colonies lawsuit was intensifying in late 2006, as the November election was approaching, in which Postmus was running for county assessor, Granlund said, since shortly after his anticipated victory Postmus would leave his position on the board of supervisors.
“(Erwin) said that it was important that this gets settled, and that it was important that it got settled prior to Supervisor Postmus leaving the board, and that he could pressure the board to get this settled,” Granlund said. Erwin told him, Granlund said, that he was prepared to reveal to the world Postmus’ homosexuality and methamphetamine addiction in mailers that could destroy his reputation and political career.
Postmus was particularly vulnerable to this effort to influence his vote, Granlund said, because the First District, in which Postmus then served, was the most conservative district countywide and Postmus’ family was very religious. “He [Postmus] would be rejected by family and friends, and his political career would be finished,” Granlund said.